British Airways today said it agreed to purchase New York-Paris all-business class airline L'Avion and fold the company into its newly launched OpenSkies subsidiary. The carriers expect the €68 million deal to close within the next three weeks.
The combined airline, already operating under a codeshare agreement, will run three dailies between the New York area and Paris on Boeing 757 aircraft—folding L'Avion's two all-business-class dailies between Paris Orly and Newark into OpenSkies three-class daily service between Orly and JFK.
OpenSkies managing director Dale Moss today said the first steps of integration are "looking for commercial synergies" and "putting the two companies together," after which the carriers plan to integrate operations, which they expect may take up to eight months. "We plan to be a singular entity early next year," Moss said today.
He said the carriers will operate under the OpenSkies brand, but still are determining aircraft cabin details. "We are going to put together some work teams and look at L'Avion's very successful mono-class and our three-class operations, and have two teams come together as one. We'll look at that to make a decision in the next six to eight weeks or so. We'll have a decision on what the product configuration will be going forward. Our commitment is very strong to the premium side of the business."
The combined entity likely will maintain a presence at both Newark and JFK, Moss said. "There are slot concerns," he said. "We've always recognized that as we grew, we were probably going to have to use more than one airport in New York. Newark and JFK are fine facilities, and of course we have British Airways operating out of both, where they operate very fine customer service operations."
Though the airlines have different cabin configurations and serve different New York-area airports, L'Avion CEO Marc Rochet today said commonalities outweigh the differences. "We do have a certain number of differences: We are one class, OpenSkies is three-class, and we have different ways of managing the business. Yet we also have a lot in common: We are using the same kind of aircraft, we are flying only Paris-New York, we are both small companies and we are targeting premium markets. We have a significant number of common points."
L'Avion and OpenSkies earlier this year established a codeshare agreement, which Moss said gave the airline entry into its airport of choice in Paris
(BTNonline, June 9). Moss said acquisition discussions began more recently "when everything tumbled together in a very positive way. The last two or three weeks, we were able to make everything happen, but it was a twinkle in our eye when the codeshare was announced."
Paris-based L'Avion employs a staff of 77, and Moss said, "They are a very small group and we intend to be a growing business, so I think there are plenty of opportunities for everybody in the combined entity."
Standalone all-business class carriers, which rose in the transatlantic market beginning in 2005—first with Eos Airlines, then Maxjet Airways—were founded to challenge the prices and amenities of entrenched airlines, namely British Airways. Imitators came and went, with Silverjet adopting the model between New York and London, and L'Avion launching the concept in early 2007 between Paris and New York
(BTNonline, Jan. 3, 2007). Beginning in December last year, most of those carriers began to unravel, and were subsequently forced into oblivion by unattainable capital and escalating fuel prices.