LONDON - British Airways is close to taking over British Regional, one of Europe's largest regional airlines, in the latest move to restore profitability to its money-losing short-haul operations. British Regional, which is quoted on the London stock exchange, is one of BA's franchise carriers. It operates from major British airports to European cities in BA colors. Last year it made a pretax profit of 10.9 million pounds ($15.7 million) on revenue of 202 million pounds ($291 million).
British Airways sold Air Liberte, its money-losing French airline, earlier in the year and is seeking a buyer for Go, its low-cost, no frills carrier. British Airway's short-haul operations lost $446 million in the last financial year.British Airways is expected to merge British Regional with two subsidiaries, Brymon Airways and BA Regional, which would operate most of its flights from regional British airports.
British Regional's shares surged by 25% last year when the company disclosed that it was in discussions that may or may not lead to a offer. Analysts believe BA would have to pay around $100 million for British Regional.
Last week, BA announced a major cutback of operations at Gatwick airport, its second London hub, involving the loss of 1,000 jobs and the transfer of most long-haul flights to London Heathrow.
Separately, BA is reported to be talking with the Australian government about increasing its 25take in Qantas to an effective controlling 490lding. The British carrier has been prevented from boosting its stake by laws barring foreign airlines from owning more than 250f Qantas' stock.
Meanwhile, the French government is said to be considering ceding majority control of Air France to smooth the way to a partnership with Alitalia, the Italian carrier.
The Italian government is preparing to sell its 53take in Alitalia and a cut in the French government's 56take in Air France would remove obstacles to a share swap between Europe's sixth- and third-largest airlines.
SAirGroup, Swissair's parent, also is talking with Alitalia, but its chances of cutting a deal have been undermined by investors' concern over its stakes in several unprofitable regional French and Italian carriers.
Bruce Barnard can be reached at 011-44-1223-840-461 or email@example.com.