FLUG REVUE August 2003: dba sold to Intro

DBA SOLD FOR ONE EURO

By Sebastian Steinke

On 2 June British Airways (BA) and Nuremberg-based Intro Verwaltungsgesellschaft mbH signed a purchase contract for the transfer of all the shares in the German low-cost airline dba, formerly Deutsche BA. As a result, on 1 July the German entrepreneur Hans Rudolf Wöhrl will become the new owner of this airline which, despite its popularity with passengers, has consistently been loss-making ever since its foundation in 1992, along with a workforce of 800 and sixteen leased Boeing 737's.

Boeing 737, dba

After the aborted takeover of dba by easyJet, BA has now found a new investor in Wöhrl surprisingly quickly. The purchase is not only being sweetened by the symbolic price of one euro, but BA has also agreed to pay the monthly aircraft leasing charges of €3 million for a full year. On top of this, the British are planning to plough up to €35 million into their German subsidiary.

The rapid change of ownership seems to have been a matter of urgency for BA, as only a year ago BA had been hoping to sell dba to easyJet for between €30 and €46 million. Retiring dba chairman, Roger Maynard, also director of investments and joint ventures with the parent company, British Airways, gave this explanation on the occasion of the announcement of the sale. “dba does not fit with our core full service network strategy and the new owners will be able to give the business the commercial focus it needs. This deal is a sensible one in the current climate. It ends our exposure to German losses, yet gives us the benefit of a share in any profits that the company makes in the next three years” Maynard was referring here to a clause in the contract under which BA is entitled to one-quarter of any profits dba earns within the next three years.

Hans Rudolf Wöhrl, the purchaser, is no stranger to the industry. Instead, we may assume that this aviation enthusiast and textiles entrepreneur with an airline transport pilot's licence who in 1974 founded the Nürnberger Flugdienst (NFD), a forerunner of Eurowings, and has headed his own aviation consultancy firm for some years, has a sound knowledge of the airline business. In particular, between 1994 and 2001 Wöhrl was a member of the advisory board of Deutsche BA, so that he is familiar with his new acquisition and its cost problems from the inside.

Little is known as yet of Wöhrl's future dba strategy, except that all dba flights are to be continued and there will be no redundancies. However, it would appear that a modest retreat from the recently propagated pure no-frills concept à la easyJet may well be the way ahead.

The dba press office quoted Wöhrl as saying that dba's aim in future should be not to be the cheapest airline but to offer the best price-performance ratio. Wöhrl is said to have remarked, “dba will therefore resolutely forego the marketing gags of special offers that hardly bring in any revenue, which regrettably have become the norm in the market. Instead, dba will offer travellers a transparent, clear and attractive fare structure.” There may be no more instructions from London in future, but neither will there be any more money.

Within the year Wöhrl plans to raise dba's productivity by 20 percent and its income by 10 percent. Several new scheduled connections to European metropolises have already been announced for the winter. As soon as the economy turns around and the company is making a profit, according to Wöhrl, staff and additional investors will be recruited for dba, following the example of NFD.

From page 36 of FLUG REVUE 8/2003

Last updated 7 July 2003

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