British Airways initiates talks with Brussels Airlines

After Lufthansa, UK flag carrier British Airways (BA) now has Brussels Airlines in its sight. With the British carrier initiating takeover talks aviation industry sources said it was likely that Sir Richard Branson, who owns 30 per cent of the Belgian national carrier, may sell out to his UK rival.

Industry sources say that BA has already approached the board of Brussels and it remains to be seen if it will make a serious offer. Lufthansa has already made an offer.
 
According to industry experts, the airline is likely to be valued at about €150 million (£121 million).

Branson's stake in Brussels Airlines is the result of the carrier's merger with Virgin Express in 2006. The charismatic entrepreneur has always had a stormy relationship with BA. Currently both are embroiled in a spat regarding BA's proposed trans-Atlantic alliance with American Airlines, which Branson claims would limit competition and harm passengers.

Virgin Atlantic is seeking to block BA's proposed transatlantic alliance with American Airlines, claiming it would limit competition and harm passengers.

A spokesman for Branson's Virgin Atlantic offered no comments on the proposed BA move but did say that the Brussels Airline stake was not considered a strategic asset and so there would be no problem in  selling to BA.

Brussels Airlines also has a partnership with American Airlines and it is being conjectured that BA's approach may well have been initiated by the US carrier.

BA, which is also finalising merger moves with Spanish flag carrier Iberia and has expressed an interest in Austrian, is one of the most active players in the consolidation moves currently gripping the European aviation industry.

Analysts feel that Brussels is a much better fit for BA than either Alitalia, which also BA is rumoured to be eyeing or Austrian, where Lufthansa has bid. They said that Air France-KLM are in a strong position at Alitalia and Lufthansa was unlikely to let Austrian slip out of its grasp.