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Making Money In The Airline Industry

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by Felix Salmon
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Jul 03 2008 12:00am EDT

Making Money in the Airline Industry

Eos? Dead. Maxjet? Dead. Silverjet? Dead. Clearly, anybody starting a business-class-only airline would be better taking classes in business. But astonishingly, it seems that the founders of the last airline standing in this market, L'Avion, are actually going to make a profit on selling out to British Airways:

BA said it would pay £54m ($107.6m) for the French airline, which includes £26m of cash in the business...
Christophe Bejach, co-founder and chairman of L'Avion, said it made sense to gain the protection of being part of a much bigger group in the face of the sharp rise in fuel costs, which was increasing its losses. A total of E50m ($79.4m) had been invested in L'Avion to date.

Bejach got lucky: BA wasn't interested in his passengers or his business model, so much as his landing slots at Orly. But in a shrinking global aviation market, it's pretty impressive that even they managed to rise in value.

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