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Jim Mason · Guest

Proposed sale of BA Connect to Flybe

BA Press Release 03/11/06

British Airways announced today that it has reached agreement in principle
to sell the regional operation of its subsidiary airline BA Connect to
Flybe.

BA Connect also operates from London City Airport and between Manchester
and New York. These services will not form part of the proposed sale nor
will the regional ground handling business, British Airways Regional Ltd.

Willie Walsh, British Airways chief executive said: "Point to point
regional operations are not a strategic part of our business and we believe
that such activities are better undertaken by a regional low cost airline.

"Despite the best efforts of the entire team at BA Connect, we do not see
any prospect of profitability in its current form.

"The proposed sale to Flybe provides the best opportunity to secure the
long-term future for the many dedicated staff in BA Connect. British
Airways will have a 15 per cent investment in Flybe on completion of the
disposal.

"London City services complement our mainline business at Heathrow. For
this reason they are not included in the proposed sale."

It is envisaged that once the sale of the regional business of BA Connect
to Flybe is completed, there will be a transition period until the start of
the summer schedule on March 25, 2007 while the handover of
responsibilities is undertaken.

ends

November 3, 2006
108/SR/06

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