| Journal: TWUK | Section: |
| Title: | Issue Date: 15/05/00 |
| Author: | Page Number: 24 |
| Copyright: Other |
Loss-making airline
BApins Air Liberte sell-off on competition over French links
Report by PAULNORRIS
BRITISHAirways chairman Lord Marshall has blamed intense competition from Air France and high-speed trains for the forced sale of subsidiary Air Liberte.BAhas sold the loss-making French carrier for £40m to Dutch-registered firm Taitbout Antibes (Travel Weekly May 1).
Lord Marshall said Air Liberte and the French carrier TAT European Airlines amalgamated into the subsidiary but had not turned in the profits demanded by BA.
In the year to March 31 1999, the last available figures, Air Liberte lost £40m on top of annual losses since BA took control three years ago.
Lord Marshall said: “Since British Airways’ initial entry into the French domestic market in 1993 (with a stake in TAT), competition has intensified significantly, both in the air and on the ground.
“Air Liberte and, before it, TAT European Airlines have not delivered an adequate return for shareholders.”
Lord Marshall claimed the best way to resolve the losses and safeguard shareholders was to sell the carrier on.
BA will incur a charge of £56m in the 2000/2001 financial year due to losses built up by Air Liberte.
Despite the sale to Taitbout Antibes, which owns French carrier AOM and a stake in Air Littoral, the former BA subsidiary will continue to operate Heathrow flights to Paris Orly and Gatwick services to Bordeaux and Toulouse.
Air Liberte’s new owner has pledged to take on Air France with its strengthened group of French carriers. Air Liberte is expected to join the Swissair-led Qualiflyer group.
The sale of such a loss-making entity will please the City as BA prepares to unveil an approximate £200m annual loss next week.
New owner:Dutch firm Taitbout Antibes has bought Air Liberte