BA sells Air Liberte

British Airways says 'au revoir'

British Airways has sold its loss-making French subsidiary, Air Liberte, to French investment group Taitbout for £47m.

BA said it had not been able to gain an adequate return on its investment in Air Liberte since entering the French domestic market in the early 1990s due to increased competition.

BA held about 86% of Air Liberte, which has been a drag on the UK carrier's profits for a long time.

The UK carrier invested about £60m in its French venture, which it had merged with another acquisition, TAT European Airlines.

"We have explored every option for resolving the matter, and the sale to Taitbout represents the best way forward for the shareholders of British Airways, for the employees of Air Liberte and for customers in France," BA Chairman Lord Marshall said in a statement.

Heavy losses

Investors will be relieved to see BA withdraw from the French market. The carrier is expected to reveal a hefty £250m full-year loss later this month.

The airline has responded with an extensive programme of cost-cutting, downsizing, abolishing loss-making routes and focusing on the premium market of business class travellers.

The sale of Air Liberte coincides with the arrival of BA's new chief executive Rod Eddington, who joins the company from the Australian carrier Ansett.