BA is selling its BA Connect division to low-cost rival Flybe, as it ditches its commitment to regional services. The airline is selling the loss-making subsidiary in return for a 15% stake in FlyBe.
“Point to point regional operations are not a strategic part of our business. Despite the best efforts of the entire team at BA Connect, we do not see any prospect of profitability in its current form,” said Willie Walsh, British Airways chief executive.
The deal marks a significant expansion for Flybe, which currently carries 6 million passengers a year on 101 routes from 21 airports around the UK. The acquisition will bring in 52 new routes from 13 UK regional airports, and 3.5 million passengers a year.
BA has also revealed this morning, in a trading update, that the disruption caused by terrorist fears has cost it £100m to date.
While its planes are marginally fuller than this time last year, it is still finding it hard to fill its premium cabins, blaming the tighter security arrangements.
The airline is due to unveil the next generation of its Club World flat beds later this month. It has also promised more enhancements to its website to make it easier to book online and find travel information.