Low cost carrier easyJet yesterday strengthened its position at London's Gatwick airport by buying GB Airways for £103.5m.
The deal will see the end of GB's 10 year franchise agreement with British Airways and will give easyJet 24% of Gatwick's slots at a time when airport capacity in the south east is tightly constrained.
"One of the analysts has described this as an infill acquisition," easyJet chief executive, Andy Harrison, said. "That's quite a good way of looking at it. London is pretty much at capacity. This gives us lots of slots at a good price."
The deal, with the privately owned Bland Group, does not include GB's slots at Heathrow. Mr Harrison said easyJet could have bought them, but had decided against doing so because of the time taken to turn round aircraft there. GB's 15-strong Airbus fleet serves 31 destinations in southern Europe and North Africa. It flew 2.8 million passengers and made a profit of £2.6m in the year to the end of March.
Some analysts have suggested easyJet could switch the aircraft to more profitable routes, but Mr Harrison said it would not decide how to deploy its new slots and fleet until well into the new year.
"We expect the acquisition to be earnings positive in our current financial year and in the longer term we will transition GB Airways operation to easyJet's cost base and operating margin levels."
British Airways chief executive, Willie Walsh, said the company's UK franchises had served their purpose. "Franchising in your home base does create confusion in the mind of the customer and this allows us to concentrate on our core activities."
