Easyjet agrees to buy GB Airways
25 October 2007The UK-based GB Airways, which currently runs services Gatwick, Heathrow and Manchester to Southern Europe and North Africa under a franchise agreement with British Airways, is being acquired by budget airline EasyJet for $212 million.
EasyJet''s acquisition does not include GB Airways'' take-off and landing slots at Heathrow. It will, however, gain access to the BA franchisee''s fleet of 15 Airbus that currently operate 39 routes. However, GB Airways franchise agreement with BA is due to come to an end in March 2008.
The airline started operations in November 1995 with two Boeing 737-200 aircraft wet leased from Independent Aviation Group Limited, which in turn, sub-contracted the operation of the aircraft to GB Airways.
In March 1998 EasyJet purchased a 40-per cent stake in TEA Switzerland, renaming it EasyJet Switzerland. The company was listed on the London stock exchange in October 2000. In 2002 it acquired its rival Go Fly.
The airline has grown on the back of its aim to make affordable as a pair of jeans'' and urged travellers to ''cut out the travel agent''. Borrowing its business model from American air carrier Southwest, EasyJet, along with its rival Ryanair is the largest low cost airlines in Europe.
Andy Harrison, chief executive, Easyjet, said that the acquisition would strengthen its customer offering at its biggest base London Gatwick to fully capitalise on the potential of the airport through a larger number of slots.
EasyJet says it will co-operate with British Airways to ensure a smooth and orderly transition for customers and GB Airways will continue to operate all routes under the British Airways brand until March 29th, 2008 after which flights will operate under the EasyJet brand.
GB''s chief executive Kevin Hatton said the deal had ended the uncertainty about its future. The future of the airline had hung in a balance as British Airways had said that it would start its own services on some of the routes operated under the franchise, once the agreement between the two ended in March 2008.