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BA 'may Merge With Iberia'  
User currently offlineKAL007 From United Arab Emirates, joined Sep 2003, 47 posts, RR: 11
Posted (10 years 6 months 2 weeks 1 day 22 hours ago) and read 2818 times:

BBC NEWS
Sunday, 5 October, 2003
http://news.bbc.co.uk/2/hi/business/3165488.stm


British Airways chief executive Rod Eddington has indicated that the British carrier could well merge with Spain's Iberia.
Mr Eddington's comments come in the Spanish press after he has been in Madrid at a dinner hosted by the Spanish airline.


According to an interview in El Pais newspaper, Mr Eddington said the two flagship airlines may "finish in each other's arms".

Mr Eddington added that Spain was a strategic market for Britain and it was natural for the two airlines to work together.

Speculation of a tie-up between the two airlines has been growing after Air France effectively took-over Dutch KLM earlier this week.

The Air France-KLM structure - where the two airlines are brought together under a joint holding company but keep their separate identities - "could be a good formula" for British Airways, Mr Eddington told the Spanish business magazine Expansion.


COMPLICATIONS

The Air France-KLM deal creates Europe's largest airline, putting pressure on BA to follow suit with a merger in order to maintain its cost efficiency and market position.

Iberia and British Airways have already signed so-called code-sharing agreements on 57 routes which allows each airline to sell tickets to fill seats on the other airline's flights.

But full-scale mergers are more tricky to negotiate because of bilateral agreements made between individual governments and third countries which dictate where airlines can fly.

The European Commission is currently negotiating to replace all these bilateral transatlantic agreements with a single pan-European deal, and analysts expect more mergers once these rules are modified.


PRIDE

"Regulation norms still complicate many things...and we would have to know what kind of union would be meaningful for two companies like BA and Iberia to work together," Mr Eddington said.

There have been some question marks over whether the KLM-Air France deal will actually save a significant amount of money because the two airlines are forced to operate independently.

The struggling airline industry has long been expected to undergo consolidation, with too many airlines competing for too few tickets.

But the process has been delayed by a variety of factors, including the national pride associated with having a flagship carrier as well as the long-established rules over flight paths.

---------------------------------------------------------------------------

QUESTION:

What are the implications of this merger (if green lighted) along with the recent one w/Air France/KLM/perhaps Alitalia) mean for the future of the European aviation industry ?

I would like to hear different views from the diversified members of this community  Smile/happy/getting dizzy.

Cheers,

KAL007


[Edited 2003-10-05 19:04:21]


i never knew who i was. i never knew who i wanted to be. -KAL007-
11 replies: All unread, jump to last
 
User currently offlineFlyboyaz From , joined Dec 1969, posts, RR:
Reply 1, posted (10 years 6 months 2 weeks 1 day 22 hours ago) and read 2790 times:

All I can say is....here we go again.....merger madness just like we saw in the mid to late 80's.

User currently offlineDoorsToManual From , joined Dec 1969, posts, RR:
Reply 2, posted (10 years 6 months 2 weeks 1 day 22 hours ago) and read 2775 times:

I don't think we are going to get any merger between IB & BA until the US & EU successfully conclude their present round of talks on a new air service agreement (next meeting on Dec 8th). I'm pessimistic about the outcome given the EU has a long wish list which US negotiators have already signalled might not be approved by Congress (ownership rules, for instance).

If they do successfully conclude talks and a new agreement is put in place, you can wave bye-bye to national airlines...we'll see something more like "Trans European airlines"....if it's good for the consumer (which economists think it is) then I'll be happy.


User currently offlineLuv2fly From United States of America, joined May 2003, 12090 posts, RR: 50
Reply 3, posted (10 years 6 months 2 weeks 1 day 21 hours ago) and read 2733 times:

I think what we are now seeing in Europe is the mergers we saw here in the states years ago! Tho one a different scale as the airlines will be one tho keep the separate names, KL and AF. Is it the popularity and strength the LCC's now have that is prompting this, or the airline industry as a whole, to many airlines chasing to few pax?


You can cut the irony with a knife
User currently offlineN79969 From , joined Dec 1969, posts, RR:
Reply 4, posted (10 years 6 months 2 weeks 1 day 20 hours ago) and read 2623 times:

This would seem to be a rational response by BA and IB. They (and indeed virtually all of AF and KL's competitors) now face a changed competitive environment after the merger. I think the following article in this week's economist does a very nice job framing the issues:

http://www.economist.com/displaystory.cfm?story_id=2099875


User currently offlineDonder10 From Canada, joined Oct 2001, 6659 posts, RR: 22
Reply 5, posted (10 years 6 months 2 weeks 1 day 20 hours ago) and read 2611 times:

I suspect both OA+TP will die pretty quickly die once the industry is properly liberalised.
Great article though and I couldn't agree more,DoorsToManual!


User currently offlineCopaair737 From , joined Dec 1969, posts, RR:
Reply 6, posted (10 years 6 months 2 weeks 1 day 20 hours ago) and read 2581 times:

maybe with the AF/KL marriage, we will see more. AZ would probably hook up with AF/KL, BA/IB/EI may hook up, and SAS/LH/Austrian/Spanair could hook up, leaving some carriers in the dark, OA and TAP come to mind.

-Copa


User currently offlineStratofish From Germany, joined Sep 2001, 1050 posts, RR: 6
Reply 7, posted (10 years 6 months 2 weeks 1 day 17 hours ago) and read 2463 times:

"I suspect both OA+TP will die pretty quickly die once the industry is properly liberalised."

That´s one of the many reasons why I strongly oppose a liberalised (airline) market.
I just hope all this merger madness will open up chances for new independent carriers.


Stratofish



The Metro might be the Sub(optimal)way
User currently offlineJacques60 From France, joined Jul 2003, 120 posts, RR: 0
Reply 8, posted (10 years 6 months 2 weeks 1 day 16 hours ago) and read 2374 times:

At least one thing is sure : LHR and MAD hubs will not be linked soon by a high speed train ?


User currently offlineBobrayner From United Kingdom, joined Apr 2003, 2227 posts, RR: 7
Reply 9, posted (10 years 6 months 2 weeks 1 day 16 hours ago) and read 2331 times:

At least one thing is sure : LHR and MAD hubs will not be linked soon by a high speed train ?

Well, if you really want to transfer by HST... in a decade it should be possible, changing trains twice; at Stratford / Waterloo / Ebbsfleet, and Paris.
(It's possible now but it takes almost as long as walking)

 Big grin



Cunning linguist
User currently offlineAnt72LBA From United Kingdom, joined Jul 2003, 414 posts, RR: 1
Reply 10, posted (10 years 6 months 2 weeks 1 day 16 hours ago) and read 2317 times:

BBC Ceefax is reporting that BA "may consider" a merger with AA if the KLM/AF merger gets the go-ahead. The story isn't being carried on the website, so I'm not sure where this has orginated from, anyone any ideas?

User currently offlineN79969 From , joined Dec 1969, posts, RR:
Reply 11, posted (10 years 6 months 2 weeks 1 day 15 hours ago) and read 2274 times:

Here you go:

http://biz.yahoo.com/rc/031005/airlines_ba_1.html

These guys are really anticipating revolutionary changes coming from the EU-US negotiation.


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