BA is to invest pounds 55m and take a 67 per cent stake in Air Liberte, while the French banking group Banque Rivaud will invest Fr190m for the remaining 33 per cent.
Marc Rochet, chairman of BA's existing French subsidiary, TAT European Airlines, will become chairman and chief executive of Air Liberte, although the two carriers will be kept distinct for the time being.
Clearance for the takeover came after the Commercial Tribunal in Creteil accepted the recovery plan for Air Liberte put forward by BA and Rivaud in preference to liquidation.
The plan is designed to return Air Liberte to profitability in three years and will safeguard 1,200 jobs. BA has pledged to retain Air Liberte's fleet of 13 aircraft, increase frequencies on services from Orly to Bordeaux and Nice and resume services from Paris to Montpellier and Gatwick to Bordeaux and Toulouse.
"This is good news for the airline, for its staff and for French air travellers," said BA's chief executive Bob Ayling.Reuse content