British Airways (BA) has agreed to buy Paris-based L'Avion for £54 million to expand its flights between France and the US.
L'Avion, which began flying in January last year, will be integrated into BA's OpenSkies, a new transatlantic airline launched last month to offer daily flights from New York to Europe.
The purchase from private investors includes £26 million cash.
Like OpenSkies, L'Avion operates to the US from Paris Orly airport using Boeing 757s.
OpenSkies began flights last month to New York John F. Kennedy airport. L'Avion, which flies to Newark, is the last independent business class-only carrier after Silverjet, Eos and MAXJet Airways went bankrupt as record oil prices eroded profit.
British Airways rose 5.25 pence, or 2.5 per cent, to 212.75 pence sterling and was trading at 211.5 pence sterling as of 9.02am in London.
The stock has declined 32 per cent this year, valuing Europe's third-biggest airline at £2.44 billion.
OpenSkies is the only carrier created specifically to take advantage of the US-European Union treaty of the same name, which allows airlines to fly between the US and any of the bloc's nations instead of just their home countries.
Bloomberg