EasyJet buys Go in £374m deal

Budget airline easyJet snapped up its rival Go in a £374million deal today in a move which could see the end of the cheap air fares boom.

Barabara Cassani, the former British Airways executive who founded Go, gets around ? 15million for her stake in the airline which was sold for just £110 million by BA last summer.

Cassani leaves the airline with immediate effect but other senior management, many of whom are likely to stay in the merger with easy-Jet, will be sharing windfalls worth around £60million.

The deal, first reported in the Evening Standard earlier this month, sees the merger of Britain's second and third largest budget airlines and will put the merged airline in direct opposition to head with market leader Ryanair.

Investors fear the consolidation in the competition will mean the end of the price wars that have seen the no-frills carriers all but give away tickets in some promotions to attract passengers

EasyJet, founded by the Greek entrepreneur Stelios Haji-Ioannou six years ago, needs to raise £276 million to fund the acquisition. He said: "The acquisition will contribute significantly to our objective to become Europe's leading low cost airline."

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