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A bit further to Go

Today’s annual results announcement for BA gave its chief executive the chance to turn up the heat on 3i, the front-running bidder for its low-cost airline Go.

The future of Go, British Airways’ low-cost airline, continues to be the subject of speculation. On the same day Go was celebrating its third anniversary, BA’s Rod Eddington confirmed that it will be selling the carrier but did not go so far as to confirm the successful bidder was private equity group 3i.

“I’m confident that we’ll complete with 3i, but there are a couple of people waiting in the wings” said Eddington at a news conference. He refused to be drawn as to who these other bidders were although commentators have suggested that several other private equity firms remain interested.

KLM, the Dutch national airline, had submitted a conditional bid for Go with a view to merging it with Buzz, its own low-cost airline. This bid had been made jointly with Carlyle, the US private equity firm but seemed to have foundered due to ant-trust concerns as well valuation wrangles. BA had put a valuation of £100 million on Go.

BA is being advised on the sale by Goldman Sachs.

The airline today announced a pre-tax profit of £150 million for the 12 months ended March 31, 2001 (2000: £5 million). Operating profit more than quadrupled to £380 million (£84 million).

“Whilst we are mindful of the challenging conditions ahead, we expect to see increasing financial benefits from our product, fleet and network strategy as well as from changes at Gatwick and to our short haul business” said Eddington.

See the following related stories:
3i set to acquire Go from British Airways
BA going for 3i?