BA takes 49.9% stake in French airline

BRITISH AIRWAYS is to boost its presence in Europe by buying a 49.9 per cent stake in TAT European Airlines, the privately- owned French carrier, for pounds 17.25m.

Under an agreement signed yesterday, BA also has a conditional option to acquire the remainder of TAT by 1 April 1997.

The deal will expand BA's European route network in advance of the liberalisation of the EC air market from next year and give it a presence in Europe's three biggest markets - Britain, Germany and France. BA already has a 49 per cent holding in a new German airline, Deutsche BA.

Formed in 1968, TAT is France's leading independent airline, serving 37 domestic and international destinations. It operates to 32 French cities from Orly airport in Paris and to a range of international destinations, including Gatwick, from Charles de Gaulle and Lyons.

The Gatwick link will enable BA to feed TAT passengers on to the 35 international destinations it serves from the airport.

TAT's main international base, Charles de Gaulle, will have a third runway and third terminal by 1996. This could give BA an opportunity to avoid its heavily congested hub airport, Heathrow, by channelling more passengers through Paris.

In 1991, TAT flew 3 million people in a fleet of 54 aircraft and made a small pre-tax profit, but is expected to make a loss this year.