EasyJet announced this morning that it has agreed to buy GB Airways for £103.5 million. The deal will see it add 15 planes to its fleet, and overtake British Airways in terms of takeoff and landing slots at Gatwick airport. BA had first option to buy the airline, but refused the opportunity.

GB Airways operates 15 Airbus aircraft (nine A320s and six A321s) and serves 31 destinations in southern Europe and North Africa with a total of 39 routes - 28 from Gatwick, six from Manchester and five from Heathrow. The company had a pretax profit of £2.6 million last year from sales of £250 million and carried 2.8 million passengers.

Following the cash purchase of the airline from Bland Group Ltd, GB will cease operating as a BA franchisee, adopting the easyJet brand from March 29. A spokesman said that easyJet has no plans to cut any GB routes, which include destinations such as Alicante and Ibiza in Spain, and Corfu, Greece. However, as it will not take over GB's Heathrow slots, there will have to be some movement in the routes.

easyJet Chief Executive Officer Andy Harrison said: 'This is really a bite-size bolt-on acquisition that makes us bigger at Gatwick. It both strengthens our customer offering at the airport, our biggest base with an attractive catchment area, and allows us to fully capitalise on the potential of the airport through a larger number of slots.'

'The deal will bring major benefits to both easyJet and GB Airways customers, delivering a wider choice of destinations at easyJet's great prices, and creating clear value for our shareholders.'

The purchase will see easyJet control 24 percent of takeoff and landing slots at Gatwick, up from 17 percent at present. It will fly around 8 million passengers across 62 routes from the airport. BA currently have 17 percent of Gatwick's slots.

The purchase excludes GB's slots at Heathrow, which will be sold by Bland Group under three separate agreements, easyJet said in the statement. It will mean that, from October next year, British Airways will no longer have any UK franchise partners.

In addition to losing the GB franchise in March, BA's BMED franchise, which flies to Africa and the Middle East, was bought by bmi in February and ceases this weekend, and Loganair's franchise agreement will end October 25 next year, after which BA will operate a codeshare agreement with the airline.

BA CEO, Willie Walsh, said: 'UK franchises have outlived their purpose. I think franchising outside your home country makes sense.' The airline still has franchise agreements with Comair Ltd., based in South Africa, and Denmark's Sun Air.

BA said it intends to start services on some of the routes operated under the franchise, from Heathrow to Faro and Malaga and from Gatwick to Faro, Gibraltar, Ibiza, Malaga, Palma and Tunis, from March 30.

Subject to regulatory approval, the purchase is expected to be completed by January 31, 2008. Between today and the sale completion date, flights will operate as normal under the BA banner. When the deal is completed, passengers can either rebook on easyJet or will be entitled to a full refund, but GB Airways will continue to operate as a BA franchise partner on their existing network until March 29, when the real changes will take place.