BA, GoAir in talks for code-sharing

Mumbai: British Airways (BA) is learnt to be in talks with GoAir to strike a code-sharing, co-branding and marketing agreement. This may eventually lead to acquisition of equity stake by BA in GoAir once India opens up investment by overseas airlines in domestic firms.
A person familiar with the situation said GoAir has appointed a London-based boutique investment bank, Euromax Capital for the transaction. He said the sharing agreements are expected to take place shortly. It will help BA to consolidate its market position in India, which is its largest contributor of passenger volumes after the US. GoAir will benefit from the BA network in India, in addition to the foreign carrier’s brand recall.
GoAir has three aircraft while BA has 48 flights a week from various Indian cities. The source said GoAir is looking at raising $150-170 million through dilution of a 35-40% equity. If the deal goes, it will value GoAir at around $350 million. When asked, the spokespersons of both GoAir and BA declined to comment. Both of them said that they do not comment “on market speculation.” Subodh Agrawal, chairman of Euromax Capital, also declined to comment on deal citing confidentiality agreements.
20/02/09 Piyush Pandey & Mithun Roy/Economic Times

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Categories: Foreign Feb 2009, GoAir Feb 2009