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Is Cathay Targeting A Major Stake In BA?  
User currently offlineBeaucaire From Syria, joined Sep 2003, 5252 posts, RR: 25
Posted (5 years 10 months 2 days 12 hours ago) and read 4166 times:

..reading this piece of information makes you wonder if the Hong Kong group might not make a take-over bid for BA?
But how could that work for a non-EU airline ?
http://www.irishtimes.com/newspaper/breaking/2008/1022/breaking77.htm


Please respect animals - don't eat them...
22 replies: All unread, jump to last
 
User currently offlineKaitak From Ireland, joined Aug 1999, 12427 posts, RR: 37
Reply 1, posted (5 years 10 months 2 days 12 hours ago) and read 4134 times:

Ah, don't forget that while CX is of course a HK based airline, it's owned by the Swire Group, which is a UK company. So it could buy into BA. Here's some facts about the Swire Group:

http://www.swire.com/eng/about/fastfacts.htm

If anything comes of it, it will be interesting to see what effect it has on future fleet planning; both BA and Cathay have 77Ws on order (and Cathay already operates the type); then, there's the 380 and the possibility of 350s in future ...


User currently offlineSeansasLCY From Hong Kong, joined Mar 2007, 849 posts, RR: 0
Reply 2, posted (5 years 10 months 2 days 11 hours ago) and read 4098 times:

I'd love CX to buy BA. It would create a brilliant airline with great Europe-Asia connections and links. I don't understand why BA don't codeshare on LHR-HKG services to offer more connections and better times.

User currently offlineB747-4U3 From United Kingdom, joined Jan 2002, 990 posts, RR: 0
Reply 3, posted (5 years 10 months 2 days 11 hours ago) and read 4087 times:



Quoting SeansasLCY (Reply 2):
BA don't codeshare on LHR-HKG services to offer more connections and better times.

Because if there is no revenue sharing agreement, the codeshare would simply cause more BA passengers to fly with CX, and thus be of no benefit whatsoever to BA.


User currently offlineJfk777 From United States of America, joined Aug 2006, 8321 posts, RR: 7
Reply 4, posted (5 years 10 months 2 days 11 hours ago) and read 4046 times:
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Would love to sse SWIRE, Cathay's Parent, to make an ofer for BA. REminds me of HSBC taking over the Midland Bank in the UK.

User currently offlineSeansasLCY From Hong Kong, joined Mar 2007, 849 posts, RR: 0
Reply 5, posted (5 years 10 months 2 days 11 hours ago) and read 4046 times:



Quoting B747-4U3 (Reply 3):
Because if there is no revenue sharing agreement, the codeshare would simply cause more BA passengers to fly with CX, and thus be of no benefit whatsoever to BA

OK, thanks for clarifying that.


User currently offlineLHR777 From , joined Dec 1969, posts, RR:
Reply 6, posted (5 years 10 months 2 days 11 hours ago) and read 4021 times:

I'm not sure sure - the 'analyst' quoted in the original Irish Times article says -

Quote:
"A bid by Cathay Pacific for British Airways makes sense ... BA has a huge network in Asia that it could just replace with Cathay Pacific's," an analyst said.

I'm just wondering where BA's 'HUGE' network in Asia comes from? As far as I recall, they serve Beijing, Shanghai, Hong Kong, Tokyo, Singapore and Bangkok in the Far East, as well as Mumbai, Chennai, Kolkata, Delhi and Bangalore in India and Dhaka in Bangladesh, along with Islamabad, which is currently suspended. So 6 destinations in the Far East, 5 in India, 1 in Bangladesh and 1 in Pakistan. Not exactly 'huge', is it?

However, I guess the 'analyst' was referring to BA's far-eastern network, that "it could just replace with Cathay Pacific's". In that case, yes, replacing BA's 'huge network in Asia' of 6 destinations with Cathay's Asian network would make sense.


User currently offlineExperimental From United States of America, joined Mar 2006, 53 posts, RR: 0
Reply 7, posted (5 years 10 months 2 days 9 hours ago) and read 3817 times:



Quoting LHR777 (Reply 6):
So 6 destinations in the Far East, 5 in India, 1 in Bangladesh and 1 in Pakistan.

Are we ignoring the Middle East?

BAH, DOH, DXB, AUH, MCT, TLV...


User currently offlineSunriseValley From Canada, joined Jul 2004, 4931 posts, RR: 5
Reply 8, posted (5 years 10 months 2 days 9 hours ago) and read 3752 times:

Are there any significant individual shareholdings in BA, say 5% or more of the outstanding shares?

User currently offlineLHR777 From , joined Dec 1969, posts, RR:
Reply 9, posted (5 years 10 months 2 days 8 hours ago) and read 3686 times:



Quoting Experimental (Reply 7):
Are we ignoring the Middle East?

BAH, DOH, DXB, AUH, MCT, TLV...

No, we're not ignoring the Middle East. However, BA themselves (according to the route maps on ba.com) refer to 'Middle East and South Asia' and 'Far East'. Perhaps someone could teach them some geography......!


User currently offlineCloudyapple From Hong Kong, joined Jul 2005, 2454 posts, RR: 10
Reply 10, posted (5 years 10 months 2 days 3 hours ago) and read 3468 times:

Cathay Pacific has officially confirmed no plans to acquire any stake in British Airways.


A310/A319/20/21/A332/3/A343/6/A388/B732/5/7/8/B742/S/4/B752/B763/B772/3/W/E145/J41/MD11/83/90
User currently offlineCloudyapple From Hong Kong, joined Jul 2005, 2454 posts, RR: 10
Reply 11, posted (5 years 10 months 2 days 2 hours ago) and read 3459 times:

http://uk.reuters.com/article/hotStocksNews/idUKSP40737820081023

Quote:
"These rumours are unfounded. We have no plan to buy British Airway," a Cathay Pacific spokeswoman said in an e-mail to Reuters.




A310/A319/20/21/A332/3/A343/6/A388/B732/5/7/8/B742/S/4/B752/B763/B772/3/W/E145/J41/MD11/83/90
User currently offlineSflaflight From United States of America, joined Nov 2005, 1183 posts, RR: 1
Reply 12, posted (5 years 10 months 2 days 2 hours ago) and read 3438 times:



Quoting SeansasLCY (Reply 2):
It would create a brilliant airline with great Europe-Asia connections and links

Not so sure about Europe-Asia (Britain-Asia maybe) unless the new merged company focuses on more connections to mainland Europe CX stations. The fact is that for many Europeans, going to Asia on BA thru London means a bit of backtracking and possible LHR delays. The new company would have to figure out how to connect Milan with either Rome or Frankfurt and Stockholm to Amsterdam; otherwise, the new joint company is useless and would add little to CX destination wise (apart from . Remember CX already serves LHR

Now if BA went after AY before the deal or CX were to go after AY, then I would say that

Quoting SeansasLCY (Reply 2):
It would create a brilliant airline with great Europe-Asia connections and links



User currently offlinePoint8six From United Kingdom, joined Apr 2008, 94 posts, RR: 0
Reply 13, posted (5 years 10 months 1 day 22 hours ago) and read 3257 times:

If you take the trouble to do a search, you will find that the Swire Group only own 40% of Cathay Pacific. Further Chinese investment in the airline is more likely. Don't forget that Cathay and BA are part of OneWorld Alliance - a takeover of either by the other is unlikely and probably of little business sense.

User currently offlineJfk777 From United States of America, joined Aug 2006, 8321 posts, RR: 7
Reply 14, posted (5 years 10 months 1 day 18 hours ago) and read 2926 times:
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Quoting LHR777 (Reply 6):
I'm just wondering where BA's 'HUGE' network in Asia comes from? As far as I recall, they serve Beijing, Shanghai, Hong Kong, Tokyo, Singapore and Bangkok in the Far East, as well as Mumbai, Chennai, Kolkata, Delhi and Bangalore in India and Dhaka in Bangladesh, along with Islamabad, which is currently suspended. So 6 destinations in the Far East, 5 in India, 1 in Bangladesh and 1 in Pakistan. Not exactly 'huge', is it?

BA's list of where they used to fly would fill the netwok well. Osaka, Nagoya, Seoul, Jakarta, Kuala Lumper and others. I can understand BA canceling routes for lack of premuim traffic but why can Lufthansa make $$ flying to all the corners of ASia.


User currently offlineSeansasLCY From Hong Kong, joined Mar 2007, 849 posts, RR: 0
Reply 15, posted (5 years 10 months 1 day 17 hours ago) and read 2872 times:



Quoting Jfk777 (Reply 14):
Osaka, Nagoya, Seoul, Jakarta, Kuala Lumper and others. I can understand BA canceling routes for lack of premuim traffic but why can Lufthansa make $$ flying to all the corners of ASia.

I think it is the case that LHR is slot constrited so BA has to chose the top 10 most profitable routes unlike LH or AF who have more slots so can operate say 15 routes to Asia.


User currently offlineB747-4U3 From United Kingdom, joined Jan 2002, 990 posts, RR: 0
Reply 16, posted (5 years 10 months 1 day 17 hours ago) and read 2838 times:



Quoting Jfk777 (Reply 14):
BA's list of where they used to fly would fill the netwok well. Osaka, Nagoya, Seoul, Jakarta, Kuala Lumper and others. I can understand BA canceling routes for lack of premuim traffic but why can Lufthansa make $$ flying to all the corners of ASia.

BA's planes are highly premium traffic orientated. Most of the space of a BA plane is taken up with First, Club World and World Traveller plus, whereas Lufthansa tend to have much larger Ecoomy class sections. Given that quite a few of Lufthansa's route are lower yielding or tag-ons, they are not really the ideal routes for BA.

For example, to make money on a BKK-KUL tag-on like LH, BA would need to fill a huge number of very large premium seats to make a profit. Given that it is only a short flight, and BA would only offer a maximum of 1 daily flight, it wouldn't really be economically viable.

Furthermore, BA have found in the past that they could make more money without flying tag-ons. It was said on here that the cost of an LHR-HKG-TPE/MNL ticket with BA was hardly much more than a ticket to Hong Kong alone. BA found that they had no problem filling the planes with passengers only flying to Hong Kong, and therefore the tag-on was denting their profits.

I think the destinations that you have given, the only ones with any chance of success would be those that could be served non-stop from LHR. Therefore my money would be on ICN, NGO or KIX. I think places like CGK, KUL, SGN, MNL are all too low-yielding too be served non-stop from LHR, and would thus require a tag-on which, as I have just explained, aren't particularly popular with BA.

Quoting SeansasLCY (Reply 15):
I think it is the case that LHR is slot constrited so BA has to chose the top 10 most profitable routes unlike LH or AF who have more slots so can operate say 15 routes to Asia.

Exactly!


User currently offlineUnited Airline From Hong Kong, joined Jan 2001, 9168 posts, RR: 15
Reply 17, posted (5 years 10 months 1 day 17 hours ago) and read 2797 times:



Quoting Point8six (Reply 13):
If you take the trouble to do a search, you will find that the Swire Group only own 40% of Cathay Pacific. Further Chinese investment in the airline is more likely. Don't forget that Cathay and BA are part of OneWorld Alliance - a takeover of either by the other is unlikely and probably of little business sense.

Doubt it. Under the current agreement Swire can acquire more shares in CX and it is very likely that they will increase their stake in CX. Little chance the Chinese will invest more into CX.

What a pity that they are not buying BA.


User currently offlineSeansasLCY From Hong Kong, joined Mar 2007, 849 posts, RR: 0
Reply 18, posted (5 years 10 months 1 day 17 hours ago) and read 2774 times:



Quoting United Airline (Reply 17):
What a pity that they are not buying BA.

exactly could have created a great airline group with a very complimentary network.


User currently offlineAirNZ From , joined Dec 1969, posts, RR:
Reply 19, posted (5 years 10 months 1 day 17 hours ago) and read 2755 times:



Quoting LHR777 (Reply 6):
I'm just wondering where BA's 'HUGE' network in Asia comes from?

I must admit that I was wondering the same thing, and IMO to anyone's imagination BA certainly no longer has what I would call a huge network in the Far East, and hasn't done so for many years.

Quoting Experimental (Reply 7):
Are we ignoring the Middle East?

BAH, DOH, DXB, AUH, MCT, TLV...

No, I don't think it was being ignored but, in context, the article (to me) was relating to the Far East. Whilst the destinations you state are in Asia, they are not the Far East. Even so, it's still not what one would surely class as a huge network.

Quoting LHR777 (Reply 9):
Perhaps someone could teach them some geography......

No, not really necessary. As above, Asia is a considerable size and thus is generally broken into smaller regions for practical purposes. One must also remember, that many on this board think of some Middle East destinations as actually being in Europe!! It's also like North America is not the United States.

Quoting B747-4U3 (Reply 3):
Because if there is no revenue sharing agreement, the codeshare would simply cause more BA passengers to fly with CX, and thus be of no benefit whatsoever to BA.

Please correct me if I'm wrong, but surely a revenue sharing agreement is neither a pre-requisite, or necessary, for a codeshare to operate between two airlines.


User currently offlineB747-4U3 From United Kingdom, joined Jan 2002, 990 posts, RR: 0
Reply 20, posted (5 years 10 months 1 day 16 hours ago) and read 2672 times:



Quoting AirNZ (Reply 19):
Please correct me if I'm wrong, but surely a revenue sharing agreement is neither a pre-requisite, or necessary, for a codeshare to operate between two airlines.

You are absolutely right.

I was just saying that, in this instance, without a revenue sharing agreement, BA would essentially be making it easier for British Airways passengers to fly LHR-HKG with Cathay Pacific, without getting any benefit. Essentially they would be encouraging their passengers to fly with Cathay, thus increasing Cathay's revenue but cutting down their own.

When you look at long-haul flight, the only time major carriers seem to code-share on a route where they are competing with each other is when there is some sort of revenue sharing agreement in place.

It's the same reason why Cathay don't put their code on BA's LHR-HKG flights (because it is competing with their own services).


User currently offlineGatoVolador From Spain, joined Apr 2007, 435 posts, RR: 1
Reply 21, posted (5 years 10 months 1 day 15 hours ago) and read 2584 times:



Quoting SunriseValley (Reply 8):
Are there any significant individual shareholdings in BA, say 5% or more of the outstanding shares?

Even if almost nobody knows that, Iberia is the first shareholder of British Airways with a 10% of the capital. Iberia bought this stake through call options (options to buy) last summer to force BA to accept a merger, and now Iberia already has about an 8% of BA, with an extra 2% of the capital in call options, and to be converted into shares soon.

The second shareholder is Standard Life with about a 9%, Barclays (~7%), Anvescap (~6,5%), and AXA (~5%). Invesco, who was the first shareholder (12%) has been selling its stake in the last months, and now I cannot remember, but I think it has a 5% or less.


User currently offlineADRIANGALT From , joined Dec 1969, posts, RR:
Reply 22, posted (5 years 10 months 1 day 15 hours ago) and read 2547 times:

What a great start to a thread, sadly like all others, it gets off track and turns into a bitching session.

As it is off track, I am sure BA would love to serve more destinations in the FAR east, but, we are forgetting BA biggest blocker, LHR.... lack of space and slots.


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