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IAG To Make Bid For TAP Portugal?  
User currently offlinespeedbird9 From United Kingdom, joined Jan 2008, 231 posts, RR: 0
Posted (3 years 6 months 3 weeks 4 days 7 hours ago) and read 17723 times:

IAG has reported as to be in talks with TAP Portugal for a takeover after the government was forced to privatise the airline as part of the 76 billion euro bailout. The airline is expect to be up for auction, the airline is thought to be worth 500 million euros. TAM has also been reported to also be interested

http://uk.reuters.com/article/2011/0...28News+%2F+UK+%2F+Business+News%29

Let IAGs shopping spree begin!


Is the customer always right? Michael O'Leary: no the customer is nearly always wrong
71 replies: All unread, showing first 25:
 
User currently offlinesabenapilot From Belgium, joined Feb 2000, 2724 posts, RR: 46
Reply 1, posted (3 years 6 months 3 weeks 4 days 7 hours ago) and read 17727 times:

IAG (BA + IB) better check with the EC prior to even bothering: a TP/IB team up would most likely have too big a market share on the Europe to South America routes to get final approval, unless TP gives up what is the essence of their long haul network: BRASIL.

User currently offlinerutankrd From United Kingdom, joined Sep 2003, 3030 posts, RR: 8
Reply 2, posted (3 years 6 months 3 weeks 4 days 7 hours ago) and read 17683 times:
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This must not go through, it would devastate Europe- South America traffic .
Lisbon would end up with practically no long haul left as much would be transferred to Madrid for sure.

Europe- South America airfares would rise significantly in the medium term .

TAP and Europe in general need them owned by another group LH or AF. NOT IB/BA.


User currently offlinesabenapilot From Belgium, joined Feb 2000, 2724 posts, RR: 46
Reply 3, posted (3 years 6 months 3 weeks 4 days 6 hours ago) and read 17519 times:

If past experience is anything to go by ,mergers/take-overs only stand a chance to get a thumbs yp by the EC if they are between alliance partners, this for the simple reason commercial integration is already a fact and formally approved by Europe. In a fully matured market, it is almost impossible to take over a competitor without changing the market split quite radically, something the EC will always block.

As such, IAG should focus on MA or AY.... They don't stand a chance at TP, IMHO.

[Edited 2011-05-08 10:18:02]

User currently offlineaznmadsci From United States of America, joined Dec 2007, 3699 posts, RR: 6
Reply 4, posted (3 years 6 months 3 weeks 4 days 6 hours ago) and read 17375 times:

Does the LH Group tend to place a bid for TP as well?

Not to deviate too far from the topic, what's the latest with JJ and LATAM? If JJ did make an offer on TP, what's the limit JJ can bid on TP?



The journey of life is not based on the accomplishments, but the experience.
User currently offlinekl911 From Czech Republic, joined Jul 2003, 5263 posts, RR: 15
Reply 5, posted (3 years 6 months 3 weeks 4 days 6 hours ago) and read 17304 times:

How about KL-AF? It would give Skyteam a boost towards South America.

I agree that IB and TP together in BA´s hands is not good at all for competition and cheap fares.


User currently offlineTimboflier215 From United Kingdom, joined May 2005, 1342 posts, RR: 1
Reply 6, posted (3 years 6 months 3 weeks 4 days 5 hours ago) and read 17088 times:

Apart from GIG and GRU, what actual overlap is there between TP and IB?? If the pax for Brazil come from Protugal, for historical reasons, while Spanish pax favour other S American destinations, why should IAG try to force everyone to use MAD?!

Should this takeover happen (and I would see LH being front runner if they have the cash) I doubt you would see IAG eviscerating TP's long haul network to route pax through MAD - they would effectively just be giving the market to their competitors!

[Edited 2011-05-08 11:29:39]

User currently offlineLHRFlyer From United Kingdom, joined Apr 2010, 820 posts, RR: 1
Reply 7, posted (3 years 6 months 3 weeks 4 days 5 hours ago) and read 16896 times:

The basis of this story is an unsourced story in The Sunday Times, so treat it with caution.

Though, I can see IAG looking at TAP. I think LH is big enough in Europe and it has enough on its plate with its loss making acquisitions, notably bmi.


User currently offlinerutankrd From United Kingdom, joined Sep 2003, 3030 posts, RR: 8
Reply 8, posted (3 years 6 months 3 weeks 4 days 4 hours ago) and read 16739 times:
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Quoting Timboflier215 (Reply 6):
Apart from GIG and GRU, what actual overlap is there between TP and IB?? If the pax for Brazil come from Protugal, for historical reasons, while Spanish pax favour other S American destinations, why should IAG try to force everyone to use MAD?!

Should this takeover happen (and I would see LH being front runner if they have the cash) I doubt you would see IAG eviscerating TP's long haul network to route pax through MAD - they would effectively just be giving the market to their competitors!

Combined with the LATAM merger there would be NO competitors of any substance left. (If LATAM choose to stay with OneWorld rather than go *A)

The consolidation of the South American services at Madrid would be GIVEN for several reasons including the extensive IB and Air Nostrum Connection opportunities, further likely EU competition requirements might well mean that some services/routes are given up maybe to the likes of SATA out of Lisbon.

TAP and PGA would become simple feeders to Madrid and LHR, Porto and Faro would probably close as TAP stations and there recent ventures into Eastern Europe end.

Financially this may actually benefit TAP in the short term however fact is BA haven't got a very good track record managing smaller European airlines have they ?

(DBA, TAT/AIR LIBERTE, BAcon and allowing the sale of GB Airways by Bland Group directly under their noses !)


Through it rues me to say i would rather they look closer to home and from a GB PLC perspective acquiring and removing BMI or Virgin would make more strategic sense. Strengthening IB/BA far more in the future.

Having three Legacy carriers in the UK really does disadvantage the UK as a whole against the might of LH and AFKL on the global stage.


User currently offlineCXA330300 From South Africa, joined May 2004, 1568 posts, RR: 2
Reply 9, posted (3 years 6 months 3 weeks 4 days 4 hours ago) and read 16670 times:

I could actually see this one happening. Firstly, IB/BA/TP would still leave enough market share to other carriers to keep the antimonopoly watchdogs happy - also, TP and IB run on totally different SA networks. KL has a pretty strong LA network, as does Lufthansa. Secondly, as far as Iberian traffic goes, there's definitely enough to go around : Spanair, Air Europa, all the other carriers pouring in. Thirdly, the EU has already approved a few questionable mergers vis-a-vis monopolies (several of LH's transactions...).


The sky is the limit as long as you can stay there
User currently offlineTimboflier215 From United Kingdom, joined May 2005, 1342 posts, RR: 1
Reply 10, posted (3 years 6 months 3 weeks 4 days 4 hours ago) and read 16595 times:

Quoting rutankrd (Reply 8):
(If LATAM choose to stay with OneWorld rather than go *A)

That's the big question mark. Personally, I think they will go *A.....

Quoting rutankrd (Reply 8):
BA haven't got a very good track record managing smaller European airlines have they ?

But it wouldn't be BA managing TP, in the same way BA doesn't manage IB - it's all IAG and if they did buy TP, I can't see them wanting to throw a 0.5 billion euro investment down the drain just to strengthen IB further in S America.


User currently offlineTimboflier215 From United Kingdom, joined May 2005, 1342 posts, RR: 1
Reply 11, posted (3 years 6 months 3 weeks 4 days 4 hours ago) and read 16583 times:

Quoting sabenapilot (Reply 1):
IAG (BA + IB) better check with the EC prior to even bothering

One thing I would say in respect of this is that it depends on whether the EC see it as a threat to competition, and also how keen they would be to see Portugal as a country pay down it's debts as much as possible so they can pay back the EU loans.

If (and it's a big if) no other suitable bidders emerge, the EC may bite the bullet as it's a step to getting other European countries' money back.


User currently offlineLHRFlyer From United Kingdom, joined Apr 2010, 820 posts, RR: 1
Reply 12, posted (3 years 6 months 3 weeks 4 days 4 hours ago) and read 16433 times:

Quoting rutankrd (Reply 8):
Financially this may actually benefit TAP in the short term however fact is BA haven't got a very good track record managing smaller European airlines have they ?

It would not be a takeover by BA and the IAG structure is based around leaving day to day management in the operating airline subject to the over arching strategy/synergy maximisation of IAG. Furthermore, IAG has made no secret of the fact that it has looked closely at what AF-KLM and LH have managed to achieve to make IAG work.


User currently offlineC010T3 From Brazil, joined Jul 2006, 3728 posts, RR: 19
Reply 13, posted (3 years 6 months 3 weeks 4 days 3 hours ago) and read 16271 times:

The best solution for the consumer would be if AF-KL acquired TP, but for Lisbon, the best alternative is surely having LATAM and Lufthansa form a joint-venture to acquire TP.

User currently offlineJAL From Canada, joined Apr 2000, 5092 posts, RR: 8
Reply 14, posted (3 years 6 months 3 weeks 4 days 2 hours ago) and read 15773 times:

Should they succeed, TAP would be force to move to OneWorld, I think a Star member might make a bid too.


Work Hard But Play Harder
User currently offlinejoost From Netherlands, joined Apr 2005, 3181 posts, RR: 4
Reply 15, posted (3 years 6 months 3 weeks 4 days 2 hours ago) and read 15570 times:

Quoting sabenapilot (Reply 3):
If past experience is anything to go by ,mergers/take-overs only stand a chance to get a thumbs yp by the EC if they are between alliance partners,

Not necessarily. What to think about:
- Alitalia - Air One
- Iberia - Vueling
- AF/KL - VLM
- LH - SN (SN entered Star after the merger)
- LH - LX (LX entered Star after the merger)
- AF - KL (KL entered Skyteam after the merger)
- bmi - bmed
- easyJet - GB airways

The mergers that were rejected:
- Ryanair - Aer Lingus
- Aegean - Olympic

For both rejected mergers, the reason was too much market share on specific routes. The EC seems to only look to competition on specific routes, rather than from a broad network point-of-view. For example, with the LH-LX merger, they were only required to give up some slots to be used for FRA-ZRH.

IB and TP only compete head-to-head on Spain-Portugal routes. BA and TP compete on London-Portugal, but this market has plenty of competition (U2, FR), so no problem here.


User currently offlineteaminthesky From United States of America, joined Apr 2011, 536 posts, RR: 0
Reply 16, posted (3 years 6 months 3 weeks 4 days 2 hours ago) and read 15314 times:

Quoting kl911 (Reply 5):
How about KL-AF? It would give Skyteam a boost towards South America.

I agree that IB and TP together in BA´s hands is not good at all for competition and cheap fares
Quoting C010T3 (Reply 13):
The best solution for the consumer would be if AF-KL acquired TP, but for Lisbon, the best alternative is surely having LATAM and Lufthansa form a joint-venture to acquire TP.

As much as I would love for this to happen, I think that the AF - KL team is spending their resources chasing Virgin Atlantic to get more access to Heathrow. Not sure if they would chase TP too.



Since 2010: DL, KL, AF, WX, IG, FR , FL, U2, AK, BA, OK, UX, VS, VN, K6
User currently offlinefcogafa From United Kingdom, joined May 2008, 867 posts, RR: 0
Reply 17, posted (3 years 6 months 3 weeks 4 days 1 hour ago) and read 14950 times:

IAG dominating the Iberian peninsula would still be nowhere near as drastic as Lufthansa dominating Germany, Belgium, Austria and Switzerland...

User currently offlinejfk777 From United States of America, joined Aug 2006, 8458 posts, RR: 7
Reply 18, posted (3 years 6 months 3 weeks 4 days 1 hour ago) and read 14802 times:
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Quoting sabenapilot (Reply 1):
IAG (BA + IB) better check with the EC prior to even bothering: a TP/IB team up would most likely have too big a market share on the Europe to South America routes to get final approval, unless TP gives up what is the essence of their long haul network: BRASIL.

AF and KLM have tons of flights to Latin America, even nonstop CDG to Santiago, Chile. Lufthansa and SWISS are huge to all the main markets in Latin America, from Mexico to Argentina with Bogota, Caracas, Rio and Sao Paulo in between. TAP is about one market Brazil to Portugal, it like talking about how big Air Canada is to Europe but when you examine it is really between the UK and Canada. IF central Europe can be of two airline groups, AF & LH, then Spain & Portugal can be of one too in IAG with BA.


User currently offlineAirbusA6 From United Kingdom, joined Apr 2005, 2027 posts, RR: 0
Reply 19, posted (3 years 6 months 3 weeks 4 days ago) and read 14343 times:

Maybe IAG should buy TAP, and when the EU complain about competition, they could then point an accusing finger at LH and suggest an airline swap, with LH getting TAP and IAH getting LX in return. Increased competition, and everyone wins 


it's the bus to stansted (now renamed national express a4 to ruin my username)
User currently offlineDellatorre From Brazil, joined May 2000, 1088 posts, RR: 2
Reply 20, posted (3 years 6 months 3 weeks 3 days 23 hours ago) and read 14149 times:

Quoting jfk777 (Reply 18):
TAP is about one market Brazil to Portugal,

Most Brazilian pax that board TP flights are connecting to another European destination, so I'd say TP is far from being Brazil to Portugal, specially out of GRU and GIG.


User currently offlinejfk777 From United States of America, joined Aug 2006, 8458 posts, RR: 7
Reply 21, posted (3 years 6 months 3 weeks 3 days 22 hours ago) and read 13841 times:
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Quoting Dellatorre (Reply 20):
Most Brazilian pax that board TP flights are connecting to another European destination, so I'd say TP is far from being Brazil to Portugal, specially out of GRU and GIG.

With TAP often being the only link to Europe from non-GIG and GRU cities I would imagine that is where most of teh connecting traffic comes from. GIG and GRU are well served by TAM and the European airlines to most major cities.


User currently offlineVV701 From United Kingdom, joined Aug 2005, 7698 posts, RR: 17
Reply 22, posted (3 years 6 months 3 weeks 3 days 22 hours ago) and read 13599 times:

To put this discussion in context it should be noted that TP's strength in flights to Latin America is very dependent upon the cultural and language ties between Portugal and Brazil, the destination of the vast majority of their Latin American flights. Any idea for an enlarged IAG to transfer these flights from LIS to MAD would therefore be a huge gift to JJ.

As has been previously stated the only real duplication in Latin American destinations between TP and IAG is to GRU and GIG. And these tend to be destinations for a significant number of third party airlines flying the South Atlantic.

To put things in context here are the shares in capacity as of a year ago beween Europe and Latin America:

AF/KL 21 per cent
IAG 19 per cent
JJ 12 per cent
TP 10 per cent
LH 8 per cent
Others 30 per cent

as detailed on Slide 53 here:

http://media.corporate-ir.net/media_.../01_ID_2010_Full_presentations.pdf

So if IAG were to buy TP they would offer a fairly significant 29 per cent of capacity.

If IAG were to be the only potential buyer of TP this could cause a dilema for the EU if they were to be concerned about the competitive position while demanding that the Portugese gocernment sell TP.


User currently offlineEK413 From Australia, joined Nov 2003, 4987 posts, RR: 4
Reply 23, posted (3 years 6 months 3 weeks 3 days 21 hours ago) and read 13434 times:

Quoting rutankrd (Reply 2):
TAP and Europe in general need them owned by another group LH or AF. NOT IB/BA.

I smell a LH takeover...

EK413



Good evening, ladies and gentlemen. We are tonight’s entertainment!
User currently offlineC010T3 From Brazil, joined Jul 2006, 3728 posts, RR: 19
Reply 24, posted (3 years 6 months 3 weeks 3 days 21 hours ago) and read 13401 times:

Quoting VV701 (Reply 22):
TP's strength in flights to Latin America is very dependent upon the cultural and language ties between Portugal and Brazil, the destination of the vast majority of their Latin American flights.

Actually, it is not. TP took advantage of the untapped markets in secondary Brazilian cities combining it with the geographic position of Lisbon and the demise of Varig in order to expand. If IB had taken the step before, they would be as successful as TP.


25 A330NZ : I hope a star member steps in, otherwise Europe to South America links will be severely affected, allowing OW to expand
26 Burkhard : This will have several bidders. LH/TAM could bid together, with LH 50+ and TAM 50-, and the southern Atlantic would stay competitve, LH, LANTAM and TP
27 ual777uk : I cannot see how the IAG would get passed the EU. I also cannot see LH and TAM working together on a bid as I am not convinved they are that "close".
28 lhr380 : Why not? IAG would be doing the same thing KLM/AF and LH want to do.
29 richardw : Those TAP slots at LHR would be very valuable to BA. They could reduce the combined frequency LHR-LIS, OPO and FNC flights could be moved to LGW and B
30 AIR MALTA : The EU has let the monster LH group dominate Europe so I do not see why they would stop IAG from buying TAP.
31 C010T3 : I wasn't aware that there were any LHR-OPO and LHR-FNC flights, but that does not make much sense anyway, since they could do the same to Iberia toda
32 ual777uk : Two words, South America. IAG/OW would just about have it to themselves from Europe
33 richardw : LHR-LIS is a very different market to LHR-MAD, wouldn't surprise me if LHR-MAD became an A321 service over the next few years. TAP have used their LHR
34 airbazar : It's an old rumor that keep resurfacing, and just like in the past, this time once again IAG was quick to say it's not true.
35 cahmc85 : What about a different strategic point of view: Qatar Airways or Singapore in order to have more access to South America and African markets. Could th
36 Post contains images commavia : If I'm not mistaken, this was one of the purported "target" airlines for IAG as rumored last year. This would give IAG immediate scope and scale in La
37 airbazar : I'd say that 60 million Euro profit last year despite a huge increase in the cost of fuel makes TP a very viable and suatainable airline. Don't confu
38 commavia : I didn't say it wasn't viable. I said it wasn't viable as a standalone company. I stand by that. In a world where European regulators have made it a
39 Amsterdam : Reuters news reports TAM is eyeing TAP.
40 Post contains images r2rho : Tough one... would the EU go the hard way and block it due to competition concerns, or let it go through? Might end up depending more on politics than
41 incitatus : You got it! LH has been able to absorb pretty much every airline in the vicinity of Germany. If the EU scuppers an IB takeover of TP, it will just re
42 Post contains links Asturias : I think that right there is the buried headline. Privatizing infrastructure and kicking a country while it is down, just leaved a bad taste in my mou
43 SXDFC : Although I am sure it depends on who buys TP, but what type of effect would a new buyer play with regards to their fleet. Would we possibly see non-Ai
44 Carls : Neither IB nor TP are in BA hands.
45 Carls : You are forgeting CCS .
46 airbazar : That depends on how you define "standalone" which in today's age of mega alliances and interline agreements is a pretty meaningless term. Even giants
47 commavia : Independent. That is what I mean. I believe TAP will inevitably be consumed into either Lufthansa, Air France-KLM, or IAG in the future, and I do not
48 Asturias : Anyone who thinks a company delivering 86 million USD last year is not "viable" or "sustainable" or whatever, is in no contact with reality. I stand
49 airbazar : As long as they make money they can survive. That's the only deciding factor. I also believe they will be absorbed in some way but all that means is
50 commavia : Hardly. I am fully "in contact" with the reality that European regulators have been encouraging mass consolidation among Europe's national carriers f
51 airbazar : I'm disagreeing with the reasons that you think will lead to this consolidation. You're saying that the reason is because TP is too small and can't s
52 Viscount724 : For LX, aligning with LH was a much better decision. LH-LX wasn't a merger. They are still separate companies with their own managements. LX is a who
53 Post contains images IBERIA747 : Wrong!!!!!. Iberia is NOT in BA's hands. It has been mentioned hundreds of times and it's also one of the keys to IAG's foundation. It seems there's
54 OA412 : Indeed. Not to mention that prior to allowing LX to slip away (I still can't believe they did this), they allowed KL to slip away, and as we all know
55 Post contains links VV701 : I do not think so. Both IB and BA fly many international routes that they would have to quit if they were no longer a Spanish and a British airline r
56 C010T3 : I think that it wouldn't be needed, since AF-KL has paved the way for most if not all destinations to which TP flies to.
57 jfk777 : IF you examine AC flights to London, they fly from every nook of Canada to the UK, their service to Europe doesn't look so broad. AC flies to LHR fro
58 Asturias : The way I see it, is that if I'm going to lend money to a person who owns a profitable business, I'm not going to demand he sells that profitable bus
59 Rafabozzolla : I personally think JJ is the most likely alternative. It would provide relief to overcrowded GRU (pax from Brazil's secondary airports would fly direc
60 Post contains links and images commavia : The national airline of Portugal being acquired by the largest (de facto national) airline of Brazil would certainly be historically ironic.
61 Pyrex : You're forgetting the big money-maker, Angola. Luanda probably accounts for half of TP's profits, it is a veritable cash cow, due to the unparalleled
62 Viscount724 : You probably mean Halifax, not Winnipeg. AC did once operate YWG-LHR infrequently but that ended many years ago.. You have to look at total capacity
63 Burkhard : Going around clockwise: Denmark: SAS - no Poland: LOT - no Czech: CSA - no Austria AUA yes Switzerland LX yes France Air France no Luxemburg Luxair n
64 VV701 : II think that the requirtement to sell TP is nothing to do with the economics of the EU financial rescue plan but everything to do with EU commercial
65 VV701 : Sorry! Forgot Augsburg Airways and Contact Air.
66 Asturias : The timing sure is curious. Especially in light of the fact that governments own plenty of airlines in Europe. The EU policy is just that the airline
67 airbazar : There is no such policy. Again, don't get me wrong, I blame the portuguese entirely for getting themselves into this mess but make no mistake that th
68 LJ : AF/KL will most certainly bid if the only bidder is IAG. However they would do this only to make sure that IAG would pay a normal price for TP. They
69 airbazar : So far, and I mean this week, both IAG and LH have reiterated that they are not interested in TP. Personally I don't think TP is of any value to AF s
70 Viscount724 : I don't think LH has any ownership interest in Contact Air or Augsburg Airways. The latter is a subsidiary of Cirrus Airlines which as far as I can t
71 Talaier : I don't see that coming though. The government will be keen to keep jobs and flights and given how valuable those routes are in many cases (think Ang
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