in the already agreed takeover of CityFlyer Express by British Airways being referred to the Competition Commission. The Competition Commission eventually cleared the sale of CityFlyer Express to British Airways for £75mn in 1999. However, it also imposed a ceiling on the maximum number of slots British Airways and its newly acquired subsidiary CityFlyer Express were allowed to hold at Gatwick. According to this ruling, British Airways and CityFlyer could control a combined maximum of 41% of all Gatwick slots on an annual basis as well as no more than 70% of the airport's slots on an hourly basis and up to 65% of these slots within a two-hour time span. These limits were designed to enable other airlines to offer competitive schedules on short haul routes where British Airways or CityFlyer was the sole or dominant carrier, without resorting to compulsory slot transfers that would have impeded British Airways' ability to run an effective hub-and-spoke operation at Gatwick. Background to British Airways' acquisition of CityFlyer Express The main reason for British Airways' acquisition of CityFlyer Express was the fact that CityFlyer held about 13% of Gatwick slots at the time. BA did not want these to fall into any competitor's hands. BA also needed CityFlyer's slots to expand its Gatwick operation so that it could offer enough feeder services that would help it turn around its loss-making operation at the airport by improving long haul load factors. It was hoped that this would shore up the profitability of the UK flag carrier's long haul routes from Gatwick, thereby enabling it to return the entire Gatwick operation to profitability in the long term. CityFlyer and its predecessor Connectair had a proven track record of operating a network of regional domestic and European scheduled services from Gatwick profitably. This was in stark contrast to BA's mainline short haul operation at Gatwick, which had racked up huge losses ever since BA had established a major presence at Gatwick as a result of the British Caledonian and Dan-Air takeovers. The losses BA's mainline short haul services generated at Gatwick were at the heart of the unsatisfactory financial performance of the entire Gatwick operation. After the failed attempt to use the acquisition of Dan-Air, which was on the verge of bankruptcy at the end of October 1992, to form a new low-cost, short haul unit within BA's mainline short haul operation at Gatwick, franchising