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LH + IB... Is The Deal Over?  
User currently offlineQazar From Canada, joined May 2006, 324 posts, RR: 0
Posted (7 years 2 months 1 week 19 hours ago) and read 3499 times:

Can someone update me on what's happening regarding all the previous talk about LH purchasing IB. Has the deal fallen through, or are they presently in a waiting period,...?

Thanks!!!

22 replies: All unread, jump to last
 
User currently offlineBeaucaire From Syria, joined Sep 2003, 5252 posts, RR: 25
Reply 1, posted (7 years 2 months 1 week 17 hours ago) and read 3396 times:

LH do not seem very eager to communicate about their acquisition strategies (..quite normal though ) in public.
IB would be an absolute perfect match for LH but BA have apparently discovered thay had a 10% stake in the company...
So for me BA have more momentum on the Iberia take-over agenda !



Please respect animals - don't eat them...
User currently offlineShuggie From United Kingdom, joined Apr 2007, 120 posts, RR: 0
Reply 2, posted (7 years 2 months 1 week 11 hours ago) and read 3210 times:

Quoting Beaucaire (Reply 1):
LH do not seem very eager to communicate about their acquisition strategies (..quite normal though ) in public.
IB would be an absolute perfect match for LH but BA have apparently discovered thay had a 10% stake in the company...

It was the number one subject a few weeks ago but nothing has been heard from LH or BA recently. This is my opinion on the whole thing:

I always got the impression that BA only wanted to buy IB to stop LH buying them, as soon as LH went quiet then so did BA. LH were interested but thought that IB was already overpriced and BA's talk only served to increase share prices and LH could well have decided to leave it until the dust settled. As soon as the price drops a little then LH could well start to show interest again and in turn this will get BA's interest up, the share price will go through the roof (in anticipation of a bidding war) and LH will once more lose interest and then BA will too. I think this could go on for a while....


User currently offlineQazar From Canada, joined May 2006, 324 posts, RR: 0
Reply 3, posted (7 years 2 months 1 week 10 hours ago) and read 3146 times:

Thanks a lot guys...

Also, in the midst of all the speculations over this subject, a theory involving BD was mentioned. From what I can remember is that the whole IB talk really revolved around making a deal with BA for the takeover of BD... Kinda like LH saying to BA: "OK, OK, we won't go after your big cash cow for Latin America, on the condition that you make it easier for us to takeover BD"...

Is there any truth in this?


User currently offlineShuggie From United Kingdom, joined Apr 2007, 120 posts, RR: 0
Reply 4, posted (7 years 2 months 1 week 10 hours ago) and read 3129 times:

I'm not sure that BA actually has the ability to make life difficult for LH in the takeover of BD! Sir Michael Bishop owns 50% + 1 share, unless he decides to sell up then BD will always turn out to be a wild goose.

I'm also not sure what BA would gain in a BD take over anyway, they have just disposed of most of their domestic network to BE when they sold BA Connect and they would be straight back in to that market if they bought BD. BD has also just bought KJ which was a loss making franchise of theirs (BA's) and I can't really see them rushing to get that back (especially as they still have the LHR slots which were probably more valuable than the airline in the first place).

In my opinion BA is much better focussing on markets overseas than in the UK, there is only so much business on this little island of ours and when 'consolidation' is the watchword (which apparently it is) then they need to broaden their horizons and move overseas.

[Edited 2007-05-20 01:11:32]

User currently offlineElmoTheHobo From United States of America, joined Aug 2006, 1536 posts, RR: 1
Reply 5, posted (7 years 2 months 1 week 8 hours ago) and read 3063 times:

Quoting Shuggie (Reply 4):
I'm also not sure what BA would gain in a BD take over anyway

Only their biggest (direct) competitor on short haul routes and the biggest slot holder at Heathrow, besides themselves of course.

Quoting Shuggie (Reply 4):
hey have just disposed of most of their domestic network to BE when they sold BA Connect and they would be straight back in to that market if they bought BD

They disposed themselves of a bunch of turboprops and barbie jets flying out of airports besides Heathrow. BMI offers BA access to cities that they don't currently serve out of Heathrow, and whole lot of slots.


User currently offlineVV701 From United Kingdom, joined Aug 2005, 7387 posts, RR: 17
Reply 6, posted (7 years 2 months 1 week 6 hours ago) and read 3018 times:

Whatever happens to IB BA holds the whip hand. This is because they own 10 per cent of IB and have pre-emptive rights on a further 27 per cent of their equity. So no one is going to take over IB without BA's agreement. Effective control of 37 per cent of IB's equity is simply too high a hurdle for anyone to jump without BA's assistance.

This whole situation was started by an approach to IB by private equity group, Texas Pacific. They realised they could get no where without BA so drew them into their circle. However BA then wanted to involve their own private equity group, Apax. According to the Times last week this means that Texas Pacific are now reconsidering their position as they do not apparently want to tow the BA line and have Apax involved. As they realise they cannot get anywhere if BA is not on their side they are thinking of quitting.

As for LH . . . Well if BA do not want LH to have IB then I believe LH can forget it. As I said the hurdle will be too high for LH to jump.

More at:
http://business.timesonline.co.uk/to...ctors/transport/article1790509.ece


User currently offlineUA 777 From , joined Dec 1969, posts, RR:
Reply 7, posted (7 years 2 months 1 week 1 hour ago) and read 2955 times:

Quoting VV701 (Reply 6):
Whatever happens to IB BA holds the whip hand. This is because they own 10 per cent of IB and have pre-emptive rights on a further 27 per cent of their equity.

Does anyone know when BA's pre-emptive rights expire? Or do they not expire at all (which is unlikely)?


User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3535 posts, RR: 3
Reply 8, posted (7 years 2 months 1 week 1 hour ago) and read 2949 times:

The deal hasn't so much fallen through, as it never existed in the 1st place. BA's 10% plus option to a further 27%, then added to IB needing to be majority Spanish owned in order to maintain its latin america route rights, meant that a LH takeover was never going to happen.

User currently offlineBA787 From United Kingdom, joined Jun 2006, 2596 posts, RR: 7
Reply 9, posted (7 years 2 months 1 week 1 hour ago) and read 2920 times:

I still think this was rumour made a little bit more concrete by the media.

I would prefer for BA to go for IB. The alliances are already there, the airlines are virtually kitted out for a merger. BA could do wonders for IB by improving their woefukl reputation and IB could enable BA to halt a lot of LatAm flights freeing up the badly needed long haul a/c.

Cheers BA787


User currently offlineHB-IWC From Greece, joined Sep 2000, 4496 posts, RR: 72
Reply 10, posted (7 years 2 months 1 week ago) and read 2888 times:

Quoting BA787 (Reply 9):
IB could enable BA to halt a lot of LatAm flights freeing up the badly needed long haul a/c.

I'm interested to know what large amount of LatAm flights BA, in your opinion, could stop, that would free them up badly needed longhaul aircraft? Last thing I know, BA is operating a daily LHR GRU roundtrip with tag ons in the region this summer, unless you also want to count a handful of LHR MEX rotations, of which BA, without any doubt is craving for more rather than less. Cutting those flights would leave BA with no presence in the region, whilst not freeing up lots of longhaul equipment, as you seem to suggest.


User currently offlineQazar From Canada, joined May 2006, 324 posts, RR: 0
Reply 11, posted (7 years 2 months 6 days 16 hours ago) and read 2697 times:

Let's face it... Both BA and LH need a strong player in Latin America... Through OneWorld, BA has accomplished that task by helping enrol IB into the alliance...

We all seem to agree that the Star Alliance, with all its might, is very weak in Latin America - at least with its connections to Europe ... The two choices are:

1) Either expand operations there by European Airlines: LH is on verge of getting lots of new long-haul aircraft, and there has been a thread recently suggesting LH metal's return into Rio de Janeiro, Bogota, and Lima, as well as an increase of services to Buenos Aires... truth or rumour??? ... Still hasn't been confirmed...

2) Or getting an airline into the alliance that allows them an immediate access into the Latin Am market... I believe that IB is the best candidate for the job... therefore any rumour of LH being interested in woeing IB away from OneWorld, can very well be a credible fact, and well justified as well !!!

Option 1 requires more time to develop the routes and more capital investment... Option 2 is more financially viable...

I also understand that *A has been in talks with TAM and TACA and would be very interested in knowing any outcomes any of you is aware of !!!

Cheers


User currently offlineQazar From Canada, joined May 2006, 324 posts, RR: 0
Reply 12, posted (7 years 2 months 6 days 16 hours ago) and read 2687 times:

Let's face it... Both BA and LH need a strong player in Latin America... Through OneWorld, BA has accomplished that task by helping enrol IB into the alliance...

We all seem to agree that the Star Alliance, with all its might, is very weak in Latin America - at least with its connections to Europe ... The two choices are:

1) Either expand operations there by European Airlines: LH is on verge of getting lots of new long-haul aircraft, and there has been a thread recently suggesting LH metal's return into Rio de Janeiro, Bogota, and Lima, as well as an increase of services to Buenos Aires... truth or rumour??? ... Still hasn't been confirmed...

2) Or getting an airline into the alliance that allows them an immediate access into the Latin Am market... I believe that IB is the best candidate for the job... therefore any rumour of LH being interested in woeing IB away from OneWorld, can very well be a credible fact, and well justified as well !!!

Option 1 requires more time to develop the routes and more capital investment... Option 2 is more financially viable...

I also understand that *A has been in talks with TAM and TACA and would be very interested in knowing any outcomes any of you is aware of !!!

Cheers


User currently offlineQazar From Canada, joined May 2006, 324 posts, RR: 0
Reply 13, posted (7 years 2 months 6 days 16 hours ago) and read 2687 times:

Sorry... I accidentally posted my message twice!!!

OOPS!!!


User currently offlineBA787 From United Kingdom, joined Jun 2006, 2596 posts, RR: 7
Reply 14, posted (7 years 2 months 6 days 13 hours ago) and read 2572 times:

Quoting HB-IWC (Reply 10):
I'm interested to know what large amount of LatAm flights BA, in your opinion, could stop, that would free them up badly needed longhaul aircraft? Last thing I know, BA is operating a daily LHR GRU roundtrip with tag ons in the region this summer, unless you also want to count a handful of LHR MEX rotations, of which BA, without any doubt is craving for more rather than less. Cutting those flights would leave BA with no presence in the region, whilst not freeing up lots of longhaul equipment, as you seem to suggest.

Daily depratures for a long haul destination need at least 2 if not 3 aircraft to work, and those a/c could be put to better use. This can even be four when the add-onns you suggested are included. This amount of a/c could be used to operate different uses. Perhaps "lots" was a bad word, but its still more of those "badly needed aircraft"


User currently offlineJAL From Canada, joined Apr 2000, 5083 posts, RR: 8
Reply 15, posted (7 years 2 months 6 days 12 hours ago) and read 2549 times:

I doubt BA would let IB slip out of its hands and have IB leave OneWorld for Star!


Work Hard But Play Harder
User currently offlineHB-IWC From Greece, joined Sep 2000, 4496 posts, RR: 72
Reply 16, posted (7 years 2 months 6 days 3 hours ago) and read 2441 times:

Quoting BA787 (Reply 14):
Daily depratures for a long haul destination need at least 2 if not 3 aircraft to work

The LHR-GRU-GIG/EZE rotation takes, in the grand scheme of the BA widebody operation, no more than 1.5 airframes to operate. I have no idea from where you come with the numbers above.

Quoting BA787 (Reply 14):
and those a/c could be put to better use

Seeing as LHR-GRU is a money spinner for BA with very beneficial effects on its bottom line, and seeing as GRU is Latin America's main gateway, I have no idea what better use you could possible be referring to. GRU is such a successful operation for BA that the airline decided to add extra capacity of the past Southern Summer season, and it looks as if the same will happen for the next peak season. BA, as any other airline, is looking at optimizing the use of its available resources, and, as it goes, I would venture to say that LHR-GRU ranks very much around the top of the airline's list as far as that criterion goes. There is no way that BA will ever give up the GRU operation. The airline has long cut the slack in Latin America with the closure of its SCL, CCS and BOG stations.

Quoting BA787 (Reply 14):
This can even be four when the add-onns you suggested are included.

I don't think you have any idea what you are talking about. BA doesn't even need 4 frames to operate its SYD route, and that aircraft spends the better part of a day on the ground at SYD. As it goes, BA needs 3.5 B744 frames for the LHR BKK SYD route and 3.5 B772ER frames for the LHR SIN SYD rotations and as far as the use of available resources go, that is the airline's most expensive route.

As said, the daily LHR-GRU-EZE/GIG route takes about 1.5 frames and last winter's 3 additional terminator frequencies to GRU could be operated with just over 1 frame.


User currently offlineMacc From Austria, joined Nov 2004, 1031 posts, RR: 3
Reply 17, posted (7 years 2 months 6 days 1 hour ago) and read 2400 times:

I would also include the AZ deal into theese considerations. If Air One does get AZ, then I am sure it will be difficult for LH to get their hands on IB. Most probably the EU governement would look into these deals and chances are that they would say no to this buy up. On the other hand, would AZ be the partner for star alliance with a considerable network to latin america?


I exchanged political frustration with sexual boredom. better spoil a girl than the world
User currently offlineJog From Netherlands, joined Jul 2005, 273 posts, RR: 7
Reply 18, posted (7 years 2 months 5 days 19 hours ago) and read 2279 times:

Quoting Qazar (Reply 12):
Let's face it... Both BA and LH need a strong player in Latin America... Through OneWorld, BA has accomplished that task by helping enrol IB into the alliance...

We all seem to agree that the Star Alliance, with all its might, is very weak in Latin America - at least with its connections to Europe ... The two choices are:

1) Either expand operations there by European Airlines: LH is on verge of getting lots of new long-haul aircraft, and there has been a thread recently suggesting LH metal's return into Rio de Janeiro, Bogota, and Lima, as well as an increase of services to Buenos Aires... truth or rumour??? ... Still hasn't been confirmed...

2) Or getting an airline into the alliance that allows them an immediate access into the Latin Am market... I believe that IB is the best candidate for the job... therefore any rumour of LH being interested in woeing IB away from OneWorld, can very well be a credible fact, and well justified as well !!!

Option 1 requires more time to develop the routes and more capital investment... Option 2 is more financially viable...

I also understand that *A has been in talks with TAM and TACA and would be very interested in knowing any outcomes any of you is aware of !!!

I guess, you can go for your last point as there are several reports that the cooperation between TAM and LH is due to be announced today. TAM is officially still talking only about partnerships, but with LH, UA, and TP they closed agreements with 3 Star carriers in the last 4 weeks (changing their partnership from AA to UA was probably the most surprising, LH the one with the most rumours beforehand). On the other hand they also closed a new agreement with a OW carrier (LAN) a few days ago...


User currently offlineBA787 From United Kingdom, joined Jun 2006, 2596 posts, RR: 7
Reply 19, posted (7 years 2 months 3 days 16 hours ago) and read 2132 times:

Quoting HB-IWC (Reply 16):

Didn't know airframes could be split in half  Yeah sure My bad Big grin


User currently offlineHB-IWC From Greece, joined Sep 2000, 4496 posts, RR: 72
Reply 20, posted (7 years 2 months 3 days 14 hours ago) and read 2093 times:

Quoting BA787 (Reply 19):
Didn't know airframes could be split in half My bad

Nice try at distracting the attention of your wild fantasies with regard to the actual topic at hand, but you are going to have to wake up much earlier to teach me a lesson about airline operations and scheduling.

BA's current LHR-GRU-EZE rotation has the airframe away from its homebase for 33 hours and 45 minutes. There goes your theory of needing 4 aircraft to operate the GRU rotation with EZE tag on. A Monday late evening departure entails a Wednesday morning return, leaving ample time to deploy the frame again on the same route the same evening. That would mean 2 aircraft for this rotation. That, however, is not how airline operations are run. BA can easily throw in a California roundtrip before deploying the aircraft again on the Lat Am routes, thereby vastly improving utilization rates. Looking at the raw numbers, a 33 hour 45 minute rotation, at a 24 hour availability per frame costs the airline just over 1.5 frames.

Just to illustrate the ludicracy of your 4-frame theory for this double overnight Lat Am operational pattern, look at the following BA flights which are operating according to similar patterns: JNB (2 flights), CPT (1 flight), HKG (3 flights), GRU (1 flight), SIN terminator (1 flight). According to your logic, these 8 roundtrips alone would eat 32 of BA's 56 available B744 frames. According to your same logic, a triple overnight pattern as that of LHR BKK SYD would use 6 frames, bringing the total to 38 frames. That would leave just 18 frames, minus operational spares and scheduled maintenance, give and take 13-14 aircraft for all of BA's other B744 routes, including 6 daily JFK, 3 LAX, 2 SFO, 2 MIA, ORD, BOS, DXB, NBO and a couple of others, all of which take one frame each to operate. I'd really like to see that happen with 14 aircraft.

Please refrain from making wild statements about specialized topics of which you clearly have no understanding. And, while we are at it, I am also still waiting for your analysis as to why BA would have to close its GRU station, given the substantial commercial success the airline is enjoying there. There is money to be made on LHR GRU, as indicated by TAM's desire to increase its frequency on the route. There is no way that BA will give up this route.


User currently offlineBA787 From United Kingdom, joined Jun 2006, 2596 posts, RR: 7
Reply 21, posted (7 years 2 months 3 days 13 hours ago) and read 2051 times:

Quoting HB-IWC (Reply 20):

Right:

I never actually specified which routes I was talking about, I generalised with the long-haul routes, I was under the impression that BA operated more LatAm flights, but I have now realised the majority of these are codeshare with IB. I never said they would or should end GRU flights, I was just spewing possibilities. Also, GRU may well be very profitable, but I expect there are other routes out there that are even more so. That said, you are right that I doubt BA will end GRU flights.

So for the above I apologise

but...

The majority of your post actually twists my words. I never, ever mentioned any other routes other than the LatAm ones yet you seem to mention quite a few.

And to be honest, I don't mind being corrected when I'm wrong, which I was, but I think your whole manner of doing so was quite out of order.


User currently offlineBA787 From United Kingdom, joined Jun 2006, 2596 posts, RR: 7
Reply 22, posted (7 years 2 months 3 days 12 hours ago) and read 2036 times:

Quoting HB-IWC (Reply 16):
The LHR-GRU-GIG/EZE rotation takes, in the grand scheme of the BA widebody operation, no more than 1.5 airframes to operate. I have no idea from where you come with the numbers above.

Explain this for me please, as from what I can see


BA0247 departs daily(say a Wednesday) at 21:45 and arrives at 5:10am the(Thursday) next morning. The same aircraft departs at 16:20 and gets to LHR as BA0246 at 07:30 (Friday) the next morning.

This must take two aircraft, as the departure is daily, and the aircraft would still be in GRU on the Thursday Morning. So 1.5 just does not work.

In this season, the EZE flights are simply an add-onn and therefore, as your rightly said, make non difference to the number of a/c

On Saturday, Monday, Wednesday and Thursday the EZE parts are added on, the other days the a/c sits at GRU till it comes back.

So I understand the above, but you've completely lost me on how a California Rotation can be slotted in again before 21:45 without some serious turnarounds

[Edited 2007-05-23 22:37:38]

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