Low-cost airline easyJet bolstered its network today with a £103.5m deal to buy GB Airways, a franchise partner of British Airways.
GB is primarily a Gatwick-based operator, covering destinations across southern Europe and northern Africa with a fleet of 15 Airbus aircraft.
It currently runs its services under the British Airways brand, but this franchise agreement will come to an end on March 29.
BA will also end a similar arrangement with Loganair from next October and begin a codeshare agreement with the Scottish carrier.
BA's chief executive, Willie Walsh, said the company's franchise system had outlived its purpose, adding that BA turned down the chance to buy GB Airways.
BA said it would start services on some of the routes operated under the franchise, including Heathrow to Faro and Malaga and from Gatwick to Faro, Gibraltar, Ibiza, Malaga, Palma and Tunis.
EasyJet, meanwhile, said the deal strengthened its position at Gatwick, which is already the company's biggest base. It will get valuable landing and take-off slots at Gatwick, although the deal with GB owner Bland Group does not include its slots at Heathrow.
Following the acquisition, easyJet will operate 24% of Gatwick's slots and will fly approximately eight million passengers across 62 routes from the airport.
Andy Harrison, chief executive of easyJet, said: "This is an acquisition which both strengthens our customer offering at London Gatwick, 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."
GB Airways will continue to operate all routes under the British Airways brand until March 29, after which flights will operate under the easyJet brand.
The deal between GB Airways and easyJet is expected to be completed within eight weeks. On completion passengers can accept to be rebooked on easyJet or will be entitled to a full refund.
Mr Walsh said: "UK franchises have outlived their purpose. EasyJet has made an offer to buy GB Airways and this has enabled us to end the franchise agreement early. We had an option to buy GB Airways but we rejected it.
"We have a significant base at Gatwick and our focus will be on maintaining and developing it as an integral part of our business."