BBA and Gama get together: UK-listed aviation rivals agree joint venture

Oliver Gill
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The new joint venture will be a separate legal entity from the two London-listed firm (Source: Getty)
BA Aviation will merge its aircraft management and charter operations with a rival's US subsidiary, creating one of the largest businesses of its type in the world, it said today.

The tie-up with Gama Aviation, also listed on the London Stock Exchange, will create a combined business with over 200 aircraft.

The new business will be called Gama Aviation Signature Aircraft Management and according to Gama will be the largest aircraft management business in the US.

Read more: BBA's share price drops on Landmark Aviation deal news

Aircraft management is just one part of operations at both BBA and Gama and the joint venture will be set up as a separate legal entity. The two listed firms will own 24.5 per cent of shares each with the remaining 51 per cent "owned by a small number of individual US shareholders including the key operational management".

BBA chief exec Simon Pryce announced the deal as "another milestone" for his firm.

Meanwhile, Gama's boss Marwan Khalek was similarly gushing about the news:

We are delighted to announce this exciting deal and to be teaming up with BBA Aviation in the US. The enlarged business creates a market leader and an unrivalled platform for growing our market share of this massive business aviation market.

Gama revealed the deal would have not an immediate positive impact on its finances. Earnings would remain similar in 2017 and 2018, but it hoped to realise the benefits of the partnership thereafter.

Read more: Chris Grayling says aviation industry will be prioritised in Brexit talks

BBA entered the aircraft management and charter services sector when it purchased Landmark Aviation for $2.1bn (£1.7bn) in September 2015.

Shares in Gama leapt over 11 per cent following the news, while BBA's share price was somewhat calmer, nosing up 0.75 per cent.

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