BA’s Openskies to Buy L’Avion
Jul 2nd, 2008 | By Jared Blank4 all-business class airlines launched service to Europe in the past 3 years, and now all 4 are gone: British Airways’ Openskies will purchase L’Avion for about $100 million or so, though that number includes about $50 million in cash L’Avion has on hand. Openskies gets leases for a couple of 757s (which are difficult to come by these days), slots at Orly (not sure how much they care about that in the long-term, but still good), and eliminates competition on the route (not sure how much difference that actually made). Not too bad for $50 million, though at an average one-way fare of $1200 (I’m being generous) and a 70% load factor (generous), it would take them a year of flying to earn back the $50 million in revenue. At a, say, 10% gross margin, it’ll take them 10 years to earn the $50 million in cash on that route. Which is why I say that I don’t think they care so much about Paris, but the additional aircraft will be useful elsewhere.