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Willie Walsh - Open Skies Consolidation Unlikely  
User currently offlineHelvknight From , joined Dec 1969, posts, RR:
Posted (7 years 4 months 2 weeks 3 days 2 hours ago) and read 2027 times:

Willie Walsh in an interview with the Guardian:

http://business.guardian.co.uk/story/0,,2051337,00.html

FAIR USE EXCERPT

Quote:
A flurry of interest in two European airlines in recent weeks is unlikely to pave the way to large-scale consolidation of the industry, according to the chief executive of British Airways.

and

Quote:
One airline already in play is Iberia, the Spanish national carrier which has received a €3.4bn (£2.3bn) takeover approach from TPG Capital, a US private equity firm. BA owns a 10% stake in Iberia and has appointed investment bank UBS to advise on the holding. The BA boss indicated that he was not interested in taking over Iberia, reiterating the company's statement last week when it said a sale was one of the options for the stake.

quite an interesting article. I was surprised that it hasn't already been posted but a search turned up nothing.

4 replies: All unread, jump to last
 
User currently offlineCarledwards From United Kingdom, joined May 2004, 262 posts, RR: 0
Reply 1, posted (7 years 4 months 2 weeks 2 days 18 hours ago) and read 1856 times:

it was posted somewhere on www.flyertalk.com

I dont personally forsee any acquisitions plans by BA, as they are happy enough they have got their extra LHR slots, and can move the remaininder of their long haul routes from poor old LGW.

I just hope the UK competition commission kicks if they try and pull any stunts like buying other UK based carriers!



Directoria
User currently offlineBAStew From Australia, joined Sep 2006, 1024 posts, RR: 2
Reply 2, posted (7 years 4 months 2 weeks 2 days 15 hours ago) and read 1758 times:

The guardian article makes Iberia seems a bit of a bum deal really. Although open skies is great for US-EU operations, the biggest benefit in IB is their latin american presence. However, most of these routes are covered by spanish-latam bilaterals preventing any proper 'merger'.

I also like his comment on whether BA had considered buying Alitalia: 'Yes: for 1.5 seconds'.  biggrin 


User currently offlineMacilree From New Zealand, joined Dec 2006, 243 posts, RR: 7
Reply 3, posted (7 years 4 months 2 weeks 2 days 4 hours ago) and read 1624 times:

Quoting BAStew (Reply 2):
Although open skies is great for US-EU operations, the biggest benefit in IB is their latin american presence. However, most of these routes are covered by spanish-latam bilaterals preventing any proper 'merger'.

If by "merger" you are talking about with another European airline like BA, then note that, following the 5 November 2002 European Court of Justice (ECJ) "open skies" judgements, the European Commission (EC) and EU member states are now making good progress in negotiating with non-EU countries (including some in Latin America - Argentina, Bolivia, Chile, Cuba, Ecuador, Panama, Paraguay, Peru, Uruguay) either what the EC calls "horizontal" agreements or by EU member states amending bilaterals replacing what I expect would be the standard "substantial ownership and effective control" by nationals of an individual EU member state criteria in their bilaterals.

This should be paving the way for European consolidation but there are many countries that have yet to sign up. I have not done an analysis of Iberia's route network and I don't have access to the Spanish bilateral and "horizontal" texts to see what key markets have yet to be covered but a quick look at Jim Liu's (jimyvr) hand-drawn route map for IB's long-haul services is a good place to start.

John Macilree's Weblog



John Macilree
User currently offlineScotron11 From United Kingdom, joined Feb 2004, 1178 posts, RR: 3
Reply 4, posted (7 years 4 months 2 weeks 2 days 4 hours ago) and read 1612 times:

Quoting BAStew (Reply 2):

I also like his comment on whether BA had considered buying Alitalia: 'Yes: for 1.5 seconds

Ha Ha!

There was also an article in TheObserver yesterday listing the revenues/profits of the "Big 3" of EU airlines:

LH Revenue: £13.5B Profit: £575M

AF/KLM Revenue: £14.6B Profit: £637M

BA Revenue: £8.5B Profit: £705M

Looking at the above, BA are doing quite well. How that will stack up when OS is fully in force is another question. Article also mentioned something interesting regarding BMI/LH:

Michael Bishop has a "put option", the right to sell the shares at a pre-determined price with LH that runs out this year. After that, LH can "call" the shares, forcing a sale at a fixed price.

Cheers!


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