British low-cost carrier easyJet has expressed an interest in buying collapsed airline Aigle Azur. According to Reuters, the UK airline has confirmed today that is keen to take over the French airline’s Paris, Orly operations
Frances second-largest airline suspended all flights last week stranding 19,000 passengers as it filed for bankruptcy. Early indications suggest that the Air France-KLM Group would be interested in either all or a part of Aigle Azur.
This was later alluded to when French junior transport minister Jean-Baptiste Djebbari said the group “appears to want to make an offer” for Aigle Azur. On hearing this news, Air France-KLM’s stock price lost 6.9% before recovering slightly.
Air France-KLM has submitted a bid for Aigle Azur
France 24 is now reporting that the Air France-KLM Group has made a bid for Aigle Azur. Interested parties had until midday today (Monday, September 9th) to submit their offers.
Last year Aigle Azur carried 1.9 million passengers, half of whom traveled between France and Algeria earning the airline $329 million. When talking to French daily newspaper Le Parisien, carried by Yahoo News, Member of the French National Assembly, Jean-Baptiste Djebbari-Bonnet said,
“There needs to be a serious buyer who is capable of offering guarantees for a maximum number of employees. The good news is that many [potential buyers] have expressed interest.”
According to FlightGlobal Aigle Azur’s largest shareholder is the Chinese owner of Hainan Airlines, the HNA Group, with a 49% share. After them comes Brazilian-American entrepreneur David Neeleman with 32%, followed by French businessman Gérard Houa with 19%.
Even if the Air France-KLM Group does not want the loss-making airline, it may have been forced to place a bid by the French Government. France owns 14.3% of the Franco-Dutch airline and is keen to safeguard 1,200 Aigle Azur jobs.
Why does easyJet want Aigle Azur?
The answer here is simple; easyJet does not want Aigle Azur, it wants the bankrupt airline’s slots at Orly Airport in Paris (ORY).
Last year, easyJet told the French government that it wanted to develop a base at Orly from which to expand its operations.
While France is not normally seen as fertile ground for budget or foreign-owned airlines, easyJet has always maintained that it is confident of starting an alternative to the current mainstream services.
Earlier attempts by Swissair and British Airways to obtain a foothold in the French market led to a disappointing end. If easyJet should pick up Aigle Azur’s slots it will be looking to take on Air France in what the French airline sees as its premium domestic routes by offering cheap no-frills fares.
Where did it go wrong for Aigle Azur?
Besides all the infighting between the directors, the airline should have focused on its core Algerian market. If it was going to expand, it needed to look to other former French colonies in North Africa.
Instead, the airline decided it wanted to offer long-haul flights to Brazil from Paris.
If the French government has put pressure on Air France to buy Aigle Azur it’s hard to imagine then letting in an outsider to go head to head with the national carrier on domestic routes.
Stranger things have happened, so we will now just have to wait and see how it all unfolds. For Aigle Azur employees, let’s hope it’s a happy ending.