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easyJet is set to acquire GB Airways for £103.5 million |
UK. easyJet is to acquire the entire issued share capital of GB Airways, excluding its slots at Heathrow Airport, from the Bland Group, for a cash consideration of £103.5 million.
GB Airways is primarily a London Gatwick-based point-to-point airline operating to destinations across Southern Europe and North Africa under a franchise agreement with British Airways. It operates 39 routes – 28 from Gatwick, six from Manchester and five from Heathrow.
For the year ended 31 March 2007 GB Airways reported profit before tax of £2.6 million and EBITDAR of £35 million on revenues of £250 million; it carried 2.8 million passengers, and had gross assets of £182 million and net assets of £33 million.
Following the acquisition easyJet will operate 24% of Gatwick’s slots and will fly approximately eight million passengers across 62 routes from Gatwick.
easyJet CEO Andy Harrison said: “This is an acquisition which both strengthens our customer offering at London Gatwick, our biggest base with an attractive catchment area, and allows us to fully capitalise on the potential of the airport through a larger number of slots.
“We expect the acquisition to be earnings positive in our current financial year and in the longer-term we will transition the GB Airways operation to easyJet’s cost base and operating margin levels. We expect to achieve both cost and revenue synergies as we expand our business at Gatwick.”
GB Airways will continue to operate all routes under the British Airways brand until March 29 2008, after which flights will operate under the easyJet brand.
GB Airways CEO Kevin Hatton said: “The sale agreement brings to an end a period of uncertainty about the future direction of our company. We are pleased that the business and customer base built up by GB Airways will now be secured and strengthened under the ownership of the UK’s largest airline by passenger numbers, and one of the industry’s most powerful brands. We will fulfil our outstanding obligation as a franchise partner to British Airways and then look forward to a smooth operational merger with easyJet.”
The transaction is expected to be completed no later than 31 January.
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