Top > Business > 2006 > November > 2006-11-09

British Airways Sells More UK Regional Operations

British Airways, one of the leading airlines in the world, is feeling some pain. It seems that the company has learned its lesson when it sold Go to 3i for less than it was worth. Recently, it has sold BA Connect, its loss-making UK regional operations, to Flybe, a company that is planning to float in the first half of 2008. It will take a write-down of GBP 106 million, and it is also taking a 15 percent stake in Flybe.

Simultaneously, British Airways announced a 27 percent fall in second-quarter pre-tax profits to GBP 176 million. This occurred due in part to the British Airways Connect write-down as well as the impact of GBP100 million of this summer?s security disruptions. It seems that British Airways is not the only airline that suffered this quarter because of security issues. Business has definitely moved out of the spotlight with the various airlines because of security.

Terrorism has had a huge impact on the air transportation industry. Funds are constantly being directed and used for security purposes and services to help focus on the most important aspect of flying today. These security services represent the new business aspect of airlines all over the world. This trend will go on for a while, if not indefinitely, changing the face of the airline industry permanently. Hopefully British Airways will recover from its recent business transactions and, in turn, benefit from them.