Go Fly - Relationship With British Airways and Management Buy-out

Relationship With British Airways and Management Buy-out

Go was very much the brain child of Bob Ayling and when he left British Airways, Go's future was rendered shaky. In November 2000, under new chief Rod Eddington, British Airways announced that it planned to sell Go. While no concrete reason was ever provided, rising fuel costs and a desire to focus on their core service have been cited as reasons for BA's desire to sell. It was also apparent that Go was cannibalising British Airways, attracting customers from the core business.

Estimated gains from the sale fluctuated, and in January 2001 British Airways admitted that its initial estimates may have been incorrect and that they now estimated Go to be worth only £200m. With the revised forecasts, there seemed to be an increase in pressure to sell Go as soon as possible, possibly within two months.

When the deal with private equity firm 3i became official in June 2001, the airline's management team remained in place due, in part, to 3i's recognition of the fact that it was this team that had launched and operated the airline so successfully in a challenging environment.

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