Focus: Advancing by leaps and bounds:Flybe purchases BA Connect
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Flybe reached in-principle agreement (03-Nov-06) to purchase British Airways regional subsidiary, BA Connect, in a move that will significantly increase Flybes route network both
in the UK and continental Europe, bringing the carriers growth plans forward by up to two years.
The proposed acquisition, which does not include BA Connects services from London City and Manchester to New York JFK, or the regional ground handling business, British Airways Regional, will see Flybe emerge as Europes largest regional airline, potentially doubling its revenue to over GBP600 million, with traffic volumes approaching ten million passengers p/a.The merged carrier will operate 159 routes from 23 UK and 36 European airports, up from the 101 routes from 47 airports currently operated by Flybe, and will include new routes to major European destinations, such as Paris, Düsseldorf, Frankfurt and Milan. Flybe also gains improved access to Manchester and Birmingham, BA Connects primary operating bases.Under the acquisition, which is still subject to some conditions, including due diligence, BA will provide capital to ensure growth targets and the transition out of the current BA Connect fleet are met, in return for a 15% shareholding in the enlarged Flybe. Once the sale is finalised, there will be a transitional period until the handover of responsibilities is completed on 24-Mar-07, shortly before the start of the Summer schedule.Flybe plans to accelerate its current fleet renewal programme once the acquisition is completed, phasing out the existing BA Connect fleet as soon as possible in favour of Bombardier Q400 and Embraer E195 aircraft. The carriers current GBP1.2 billion fleet investment programme will be complete by 2009, bringing the carriers total fleet to 82 aircraft, with the overall goal of reducing fuel consumption by over 50% per seat.Flybe announced that, in the event of a successful acquisition, any changes to the existing ownership structure will be deferred to allow management to focus on successful integration of operations. The carrier had reportedly been considering an IPO for mid-2007, targeting to raise GBP75-100 million, however the planned purchase of BA Connect may delay the IPO by up to 12 months.
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Focus: Advancing by leaps and bounds:Flybe purchases BA Connect 
