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TC957
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BA to split from IAG ?

Sun Jun 13, 2021 9:37 pm

It's been reported on various news channels that Willie Walsh has said that BA could be split from IAG, siting the delay in restoring
transatlantic flights due to the US travel ban.
Thoughts ?
 
VMCA787
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Re: BA to split from IAG ?

Sun Jun 13, 2021 9:43 pm

Then it would be easy to provide a link to the source......
Fly fast, live slow!
 
TexasAirCorp
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Re: BA to split from IAG ?

Sun Jun 13, 2021 9:47 pm

Will never happen. What Walsh said was that IAG would probably seek to sell off any part of its business that was underperforming after COVID, which makes sense, but I highly doubt that'll be BA.

IAG can't compete with Lufthansa/Air France-KLM without BA's LHR hub. Without it, IAG only really has Iberia's MAD hub, which is only really a competitor to AMS/CDG/FRA on Europe-South America routes.

If anything will be sold off, I reckon it will be Vueling (even then, I think that's pretty unlikely).

https://www.thisismoney.co.uk/money/mar ... l-off.html
 
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JannEejit
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Re: BA to split from IAG ?

Sun Jun 13, 2021 9:49 pm

Forgive me, but hasn't Willie Walsh departed IAG ? Is this the equivalent of Gordon Brown giving opinion on UK government policy ?
 
TexasAirCorp
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Re: BA to split from IAG ?

Sun Jun 13, 2021 9:52 pm

JannEejit wrote:
Forgive me, but hasn't Willie Walsh departed IAG ? Is this the equivalent of Gordon Brown giving opinion on UK government policy ?


Hahahaha. Excellent comparison
 
ChrisKen
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Re: BA to split from IAG ?

Sun Jun 13, 2021 10:22 pm

The sooner the better, IF it were to happen. Pulling BA out of the IAG race to the bottom would be a good thing.
 
jfk777
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Re: BA to split from IAG ?

Sun Jun 13, 2021 10:39 pm

BA should have merged with KLM, Iberia was the last decent girl left at the ball to marry. Iberia is great to Latin America but not a force elsewhere. IAG should buy Finnair with all their Asian routes.
 
eurotrader85
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Re: BA to split from IAG ?

Sun Jun 13, 2021 10:56 pm

Given it's the primary asset of IAG, and by far its biggest revenue earner in normal times, it would be an astonishing move, and is more likely to be WW, as head of IATA, putting pressure on the UK govt to get aviation moving again.

That said though, let's look at the group for a moment. 1) Iberia personal have taken over the top two positions in the group. 2) The vast UK share base of the group has caused it a headache since Brexit due to EU share ownership rules. Splitting off BA may well alleviate some of this home base shareholder register 3) Given BA is considered a 'premium brand' (Yes we can debate how much they have dummed that down in other threads) it is a bit of an outlier in the group that is increasingly bolting on or developing LCC brands. 4) Also, it is becoming noteworthy that both BA and IB seem to be slowing down their aircraft deliveries. Sure everyone is finding ways to slow down deliveries atm but, from more or less getting on with it even in late 2020, IAG has slowed down further since, to almost a standstill. Could the board be starting to look at drastic solutions as more summer weeks go by without an end in sight of an opening of the UK to travel? (I merely make these points to be a devils advocate and personally don't think IAG will relinquish their biggest asset.)
 
concordeforever
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Re: BA to split from IAG ?

Sun Jun 13, 2021 11:13 pm

This is garbage! Willie Walsh has nothing to do with BA or IAG anymore. If IAG were to sell off British Airways then the remainder would collapse.
 
davidjohnson6
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Re: BA to split from IAG ?

Sun Jun 13, 2021 11:14 pm

IAG selling BA would take several months as a minimum to clear all the regulatory stuff.
I don't believe the UK Govt will be able to sustain for several months a no-travel policy while the EU allows travel, especially if there is no *really* significant increase in deaths. If deaths rise fast in the UK, there will likely be many deaths and a travel freeze in the EU as well. The UK will need to have some sort of similiar policy as the likes of France or Germany or see significant economic damage. I think IAG selling BA because of a temporary travel freeze would be a drastic over-reaction

Furthermore, while combining Iberia and Vueling in one corporate group makes sense.... including Aer Lingus but not BA would be a real outlier - EI works in IAG because of the synergy with BA
 
rutankrd
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Re: BA to split from IAG ?

Mon Jun 14, 2021 7:05 am

davidjohnson6 wrote:
IAG selling BA would take several months as a minimum to clear all the regulatory stuff.
I don't believe the UK Govt will be able to sustain for several months a no-travel policy while the EU allows travel, especially if there is no *really* significant increase in deaths. If deaths rise fast in the UK, there will likely be many deaths and a travel freeze in the EU as well. The UK will need to have some sort of similiar policy as the likes of France or Germany or see significant economic damage. I think IAG selling BA because of a temporary travel freeze would be a drastic over-reaction

Furthermore, while combining Iberia and Vueling in one corporate group makes sense.... including Aer Lingus but not BA would be a real outlier - EI works in IAG because of the synergy with BA


With Brexit and ensuing revised ownership rules it is obligatory that the ownership arrangements change to comply with both EU and new UK domestic corporate law . The Irish gentlemen merely expresses those dynamics.

British Airway Limited (a separate legal entity) may well be a part of those changed principles, however British Airways can not remain as is period.

To comply with the changed arrangements BA will have to find a suitable vehicle to ensure majority English ( no such thing as British Law) law and ownership is created.

As to the UK travel restrictions well Bojo and Co simply can’t find themselves talking with our neighbours nicely about anything !
 
Opus99
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Re: BA to split from IAG ?

Mon Jun 14, 2021 7:42 am

IAG is not selling BA. I think WW was just saying I mean it could happen if it no longer makes sense from a performance perspective etc but he himself said in the interview it is not likely. He doesn’t think it will happen
 
Opus99
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Re: BA to split from IAG ?

Mon Jun 14, 2021 7:44 am

rutankrd wrote:
davidjohnson6 wrote:
IAG selling BA would take several months as a minimum to clear all the regulatory stuff.
I don't believe the UK Govt will be able to sustain for several months a no-travel policy while the EU allows travel, especially if there is no *really* significant increase in deaths. If deaths rise fast in the UK, there will likely be many deaths and a travel freeze in the EU as well. The UK will need to have some sort of similiar policy as the likes of France or Germany or see significant economic damage. I think IAG selling BA because of a temporary travel freeze would be a drastic over-reaction

Furthermore, while combining Iberia and Vueling in one corporate group makes sense.... including Aer Lingus but not BA would be a real outlier - EI works in IAG because of the synergy with BA


With Brexit and ensuing revised ownership rules it is obligatory that the ownership arrangements change to comply with both EU and new UK domestic corporate law . The Irish gentlemen merely expresses those dynamics.

British Airway Limited (a separate legal entity) may well be a part of those changed principles, however British Airways can not remain as is period.

To comply with the changed arrangements BA will have to find a suitable vehicle to ensure majority English ( no such thing as British Law) law and ownership is created.

As to the UK travel restrictions well Bojo and Co simply can’t find themselves talking with our neighbours nicely about anything !

That’s one thing I’m yet to understand. What exactly does BA have to put In place to pass the requirements. I know IAG made some board changes to that effect but I don’t know if that’s enough
 
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vhtje
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Re: BA to split from IAG ?

Mon Jun 14, 2021 7:54 am

Source:

https://www.thisismoney.co.uk/money/markets/article-9682247/Willie-Walsh-Covid-prompt-British-Airways-sell-off.html

The Torygraph has also picked up this story, but it is behind a paywall.

Just to be clear he is not advocating it.

I don't think that will happen, but it could


I think it was part of a wider attack on the slowness to remove TATL travel restrictions. He's arguing that this is causing BA to "underperform" and "There's nothing to say that bits of IAG could not be sold off or cut loose. That was my thinking as CEO. If one part of the business wasn't performing, you could dispose of that part. I don't think that will happen, but it could."

That's really all it is, it seems.
I only turn left when boarding aircraft. Well, mostly. All right, sometimes. OH OKAY - rarely.
 
FluidFlow
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Re: BA to split from IAG ?

Mon Jun 14, 2021 7:58 am

Opus99 wrote:
rutankrd wrote:
davidjohnson6 wrote:
IAG selling BA would take several months as a minimum to clear all the regulatory stuff.
I don't believe the UK Govt will be able to sustain for several months a no-travel policy while the EU allows travel, especially if there is no *really* significant increase in deaths. If deaths rise fast in the UK, there will likely be many deaths and a travel freeze in the EU as well. The UK will need to have some sort of similiar policy as the likes of France or Germany or see significant economic damage. I think IAG selling BA because of a temporary travel freeze would be a drastic over-reaction

Furthermore, while combining Iberia and Vueling in one corporate group makes sense.... including Aer Lingus but not BA would be a real outlier - EI works in IAG because of the synergy with BA


With Brexit and ensuing revised ownership rules it is obligatory that the ownership arrangements change to comply with both EU and new UK domestic corporate law . The Irish gentlemen merely expresses those dynamics.

British Airway Limited (a separate legal entity) may well be a part of those changed principles, however British Airways can not remain as is period.

To comply with the changed arrangements BA will have to find a suitable vehicle to ensure majority English ( no such thing as British Law) law and ownership is created.

As to the UK travel restrictions well Bojo and Co simply can’t find themselves talking with our neighbours nicely about anything !

That’s one thing I’m yet to understand. What exactly does BA have to put In place to pass the requirements. I know IAG made some board changes to that effect but I don’t know if that’s enough


As far as I know it is not allowed to run an airline in the EU that is held by a non EU entity. So every airline in the EU has to be at least with 50%+1 in the hands of Europeans. Now IAG is a EU company. The thing is if the UK does not allow UK airlines to be majority held by a foreign company (IAG), than IAG has to sell of BA, or BA will not get a UK AOC. BA could get a EU AOC but I dont know if the UK would allow that a EU-airline will get rights to routes that do not start or end in the EU (eg. LHR-JFK), as this would be a 7th Freedom flight. It could open up a can of worms as many more airlines would want this kind of right.
 
jomur
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Re: BA to split from IAG ?

Mon Jun 14, 2021 3:05 pm

FluidFlow wrote:
Opus99 wrote:
rutankrd wrote:

With Brexit and ensuing revised ownership rules it is obligatory that the ownership arrangements change to comply with both EU and new UK domestic corporate law . The Irish gentlemen merely expresses those dynamics.

British Airway Limited (a separate legal entity) may well be a part of those changed principles, however British Airways can not remain as is period.

To comply with the changed arrangements BA will have to find a suitable vehicle to ensure majority English ( no such thing as British Law) law and ownership is created.

As to the UK travel restrictions well Bojo and Co simply can’t find themselves talking with our neighbours nicely about anything !

That’s one thing I’m yet to understand. What exactly does BA have to put In place to pass the requirements. I know IAG made some board changes to that effect but I don’t know if that’s enough


As far as I know it is not allowed to run an airline in the EU that is held by a non EU entity. So every airline in the EU has to be at least with 50%+1 in the hands of Europeans. Now IAG is a EU company. The thing is if the UK does not allow UK airlines to be majority held by a foreign company (IAG), than IAG has to sell of BA, or BA will not get a UK AOC. BA could get a EU AOC but I dont know if the UK would allow that a EU-airline will get rights to routes that do not start or end in the EU (eg. LHR-JFK), as this would be a 7th Freedom flight. It could open up a can of worms as many more airlines would want this kind of right.


I do believe that rule does not apply in this case though. IAG/BA has grandfathered rights otherwise it would have been addressed by now.
 
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LAX772LR
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Re: BA to split from IAG ?

Mon Jun 14, 2021 4:39 pm

ChrisKen wrote:
The sooner the better, IF it were to happen. Pulling BA out of the IAG race to the bottom would be a good thing.

Seems more like whimsical speculation, even on his part.... but yeah, it'd be so great to get them out of that.

While it's obvious how BA helps IAG overall, I'm still scratching my head on any benefit in the inverse. Anyone?
I myself, suspect a more prosaic motive... ~Thranduil
 
guillermohs
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Re: BA to split from IAG ?

Mon Jun 14, 2021 8:43 pm

LAX772LR wrote:
ChrisKen wrote:
The sooner the better, IF it were to happen. Pulling BA out of the IAG race to the bottom would be a good thing.

Seems more like whimsical speculation, even on his part.... but yeah, it'd be so great to get them out of that.

While it's obvious how BA helps IAG overall, I'm still scratching my head on any benefit in the inverse. Anyone?


A one stop in MAD or DUB resolves BA's limited expansion possibilities due to slot capacity in its only hub. BA does need a partner in Europe and while some people might disagree, synergies with IB or EI are reasonably efficient.

With all due respect, I think people in this forum oversestimate BA's position as a global airline. Dependancy on London's OD market does generate revenue, but lacks any growth future prospects.
 
Noshow
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Re: BA to split from IAG ?

Mon Jun 14, 2021 8:53 pm

I don't want to get into anything political but IIRC BA have or might get legal problems concerning EU traffic rights and ownership requirements.
 
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LAX772LR
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Re: BA to split from IAG ?

Mon Jun 14, 2021 9:38 pm

guillermohs wrote:
With all due respect, I think people in this forum oversestimate BA's position as a global airline.

Do they though? BA as of late has not really posited itself as anything more than a major TATL connector.... similar to VS, but on a much larger scale.

Sure there's still the colonial-ties destinations, but the days of being (or even attempting to be) "the world's favourite airline" have longggg since passed.
I myself, suspect a more prosaic motive... ~Thranduil
 
MIflyer12
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Re: BA to split from IAG ?

Mon Jun 14, 2021 10:22 pm

LAX772LR wrote:
While it's obvious how BA helps IAG overall, I'm still scratching my head on any benefit in the inverse. Anyone?


They get some greater economies of scale of fleet/parts/supplies buys. They get reduced price competition on UK-Ireland and UK-Spain routes. That's all I've got.

The European carrier groups keeping separate fleets and work groups don't get anything in cost synergies like the U.S. groups which retained a single brand.
 
skipness1E
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Re: BA to split from IAG ?

Mon Jun 14, 2021 11:14 pm

LAX772LR wrote:
guillermohs wrote:
With all due respect, I think people in this forum oversestimate BA's position as a global airline.

Do they though? BA as of late has not really posited itself as anything more than a major TATL connector.... similar to VS, but on a much larger scale.

Sure there's still the colonial-ties destinations, but the days of being (or even attempting to be) "the world's favourite airline" have longggg since passed.

Though for context the BA going into COVID had never been bigger, it's not like not they shrank, it's that others had explosive growth. And Air France aren't growing outside of Paris, KLM have nothing of note beyond AMS and Swiss are core Zurich with GVA window dressing. Only Lufthansa have two hubs and both are German. So BA are in the same boat as their peers, and Iberia just dropped all of their A346s so have had a much larger % fleet drop than the others, indeed modern Iberia is worryingly small IMHO, across both long and short haul.
 
IrishLessor
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Re: BA to split from IAG ?

Wed Jun 16, 2021 4:35 am

BA pre covid delivers the vast majority of IAG profits. New Iberia has been on a journey to sustainable profit levels with some success, again precovid. Aer Lingus is % return on investment ahead of the IAG group average. However, it is a minnow by size in comparison. Vueling is in a hugely contested/ competitive space. As a result ostensibly BA is IAG, so IMHO BA will ENDURE as central to IAG. However, I'd forsee something being sold. Vueling or Aer Lingus first. BA sold Go which was turning a corner in early 2001 when they needed cash. Now is different.

The question is if Vueling was sold who would buy, none of the obvious right fit airlines are likely to be in spending mode for some time and without a significant turnaround in fortunes soon, financial institutions are unlikely to fund such transactions. WIZZ or easyJet would appear to have the most alignment given fleet etc. But hard to see it. It is hard to see how we will all emerge from this pandemic without some something big in terms of consolidation or sell outs.
 
Noshow
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Re: BA to split from IAG ?

Wed Jun 16, 2021 6:14 am

Selling Vueling? Who would buy it?
-Low-cost airlines don't need to buy other low-cost airlines. They can just grow into another market themselves if they should want to. Especially within the EU common market.
-Legacy airlines don't need to buy low-cost airlines because that only creates competition for their core business.
 
a350lover
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Re: BA to split from IAG ?

Wed Jun 16, 2021 7:54 am

How would IAG serve BCN and the tremendous network VY has there, plus BIO, AGP, SVQ or PMI among other primary markets for Vueling in Spain? Who would serve that if Vueling was sold?
 
BealineV953
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Re: BA to split from IAG ?

Wed Jun 16, 2021 8:37 am

MIflyer12 wrote:
LAX772LR wrote:
While it's obvious how BA helps IAG overall, I'm still scratching my head on any benefit in the inverse.
Anyone?


They get some greater economies of scale of fleet/parts/supplies buys. They get reduced price competition on UK-Ireland and UK-Spain routes. That's all I've got.
The European carrier groups keeping separate fleets and work groups don't get anything in cost synergies like the U.S. groups which retained a single brand.


For BA, a significant commercial benefit of the partnership with Iberia is access to markets in Latin America that the UK carrier does not serve. This increases revenue.
There are synergies. Over time a number of business functions have been centralised at IAG.
Procurement (Purchasing) is managed by IAG for the group. This gives the group greater purchasing power.
IT (Information Management) is managed by IAG for the group. Having said that, it is now largely outsourced.
In Europe and the Americas all BA and Iberia passenger sales teams were merged several years ago, with one sales office in each territory representing both airlines. This significantly reduced selling costs. When this was first done the sales teams remained on BA or Iberia contracts, but I don't know if it stayed that way. I don't know if the BA and Iberia sales offices have now been merged in Africa, the Middle East and elsewhere.
Also,
BA World Cargo and Iberia Cargo merged into IAG Cargo. BA World cargo and Iberia Cargo people moved to IAG contracts, becoming IAG employees.
Iberia Engineering in Madrid does a significant amount of narrow-body Airbus maintenance for BA.
...and so on.

Regarding "reduced price competition on UK-Ireland and UK-Spain routes"; BA and Iberia did not merge to reduce price competition in the UK-Spain market, and they'd be fools to think they'd achieve that. History shows that in deregulated markets, where airlines acquire competitors, merge or form partnerships new competition quickly emerges. The UK-Ireland market is competitive, and the UK-Spain market is highly competitive. Pre-pandemic, as well as BA and Iberia, easyJet, Ryanair, Jet2, Tui, Norwegian and others offered services from just about every UK airport to just about every Spanish airport.
Ever since childhood, when I lived within sight of London Airport, I have seldom seen a plane go by and not wished I was on it.”
With apologies to Paul Theroux - ‘The Great Railway Bazaar’
 
BealineV953
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Re: BA to split from IAG ?

Wed Jun 16, 2021 8:48 am

ChrisKen wrote:
The sooner the better, IF it were to happen. Pulling BA out of the IAG race to the bottom would be a good thing.


IAG has a new CEO, and BA has a new CEO. The Willie Walsh, Alex Cruz period is over. Focus on costs will remain very important, and recovering from the pandemic will make life very difficult, but I expect to see Sean Doyle take BA in a very different direction.
Ever since childhood, when I lived within sight of London Airport, I have seldom seen a plane go by and not wished I was on it.”
With apologies to Paul Theroux - ‘The Great Railway Bazaar’
 
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LAX772LR
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Re: BA to split from IAG ?

Wed Jun 16, 2021 9:47 am

BealineV953 wrote:
but I expect to see Sean Doyle take BA in a very different direction.

Great, he can start by not charging pax who just put down $7K+ on paid biz, for seat selection...
...because that's the most nickel-&-dimed feeling I've ever experienced in all of aviation, and leaves a really cheap and disgusting taste about them.

Were there another nonstop option, I'd take it. But since departing from MSY, and BA is its only non-season TATL carrier, I put up with this.
But still absolutely reeks that they'd do that to market revenue premium travelers, and for what's arguably the most outdated J seat of any major hub carrier. :mad:
I myself, suspect a more prosaic motive... ~Thranduil
 
Nnaeto87
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Re: BA to split from IAG ?

Wed Jun 16, 2021 10:07 am

LAX772LR wrote:
BealineV953 wrote:
but I expect to see Sean Doyle take BA in a very different direction.

Great, he can start by not charging pax who just put down $7K+ on paid biz, for seat selection...
...because that's the most nickel-&-dimed feeling I've ever experienced in all of aviation, and leaves a really cheap and disgusting taste about them.

Were there another nonstop option, I'd take it. But since departing from MSY, and BA is its only non-season TATL carrier, I put up with this.
But still absolutely reeks that they'd do that to market revenue premium travelers, and for what's arguably the most outdated J seat of any major hub carrier. :mad:

This is 100% one of the worst things about BA. On other airlines even premium economy seat selection is free
 
tonystan
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Re: BA to split from IAG ?

Wed Jun 16, 2021 10:08 am

ChrisKen wrote:
The sooner the better, IF it were to happen. Pulling BA out of the IAG race to the bottom would be a good thing.


BA created the race to the bottom and then IAG!
My views are my own and do not reflect any other person or organisation.
 
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keesje
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Re: BA to split from IAG ?

Wed Jun 16, 2021 10:51 am

A BAxit ? I think it would isolate BA more from the EU. A substantial market for them.
"Never mistake motion for action." Ernest Hemingway
 
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LAX772LR
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Re: BA to split from IAG ?

Wed Jun 16, 2021 10:56 am

Nnaeto87 wrote:
This is 100% one of the worst things about BA. On other airlines even premium economy seat selection is free

It'd be one thing if the fee was nominal, but it came out to $720 for roundtrip seat selection for two!

Paid it, but still feel that it's such a sh!tty practice for a supposed premium carrier!
I myself, suspect a more prosaic motive... ~Thranduil
 
Galwayman
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Re: BA to split from IAG ?

Wed Jun 16, 2021 12:32 pm

LAX772LR wrote:
ChrisKen wrote:
The sooner the better, IF it were to happen. Pulling BA out of the IAG race to the bottom would be a good thing.

Seems more like whimsical speculation, even on his part.... but yeah, it'd be so great to get them out of that.

While it's obvious how BA helps IAG overall, I'm still scratching my head on any benefit in the inverse. Anyone?


It gives BA acccess to quality leadership that doesn't exist internally , obviously :-)
 
Galwayman
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Re: BA to split from IAG ?

Wed Jun 16, 2021 12:34 pm

The only feasible buyer for BA is Ryanair really ... that would be so much fun
 
MIflyer12
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Re: BA to split from IAG ?

Wed Jun 16, 2021 12:37 pm

BealineV953 wrote:
MIflyer12 wrote:
LAX772LR wrote:
While it's obvious how BA helps IAG overall, I'm still scratching my head on any benefit in the inverse.
Anyone?


They get some greater economies of scale of fleet/parts/supplies buys. They get reduced price competition on UK-Ireland and UK-Spain routes. That's all I've got.
The European carrier groups keeping separate fleets and work groups don't get anything in cost synergies like the U.S. groups which retained a single brand.




Regarding "reduced price competition on UK-Ireland and UK-Spain routes"; BA and Iberia did not merge to reduce price competition in the UK-Spain market, and they'd be fools to think they'd achieve that. History shows that in deregulated markets, where airlines acquire competitors, merge or form partnerships new competition quickly emerges.


You have offered that canard before. New competition doesn't mean they have the scale to be effective competition. If I wanted happy Mercatus Center 'free markets always work' nonsense I know where to find it.
 
cedarjet
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Re: BA to split from IAG ?

Wed Jun 16, 2021 1:43 pm

BA leaving IAG is like saying British is leaving Airways
fly Saha Air 707s daily from Tehran's downtown Mehrabad to Mashhad, Kish Island and Ahwaz
 
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vhtje
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Re: BA to split from IAG ?

Wed Jun 16, 2021 1:58 pm

LAX772LR wrote:
BealineV953 wrote:
but I expect to see Sean Doyle take BA in a very different direction.

Great, he can start by not charging pax who just put down $7K+ on paid biz, for seat selection...
...because that's the most nickel-&-dimed feeling I've ever experienced in all of aviation, and leaves a really cheap and disgusting taste about them.

Were there another nonstop option, I'd take it. But since departing from MSY, and BA is its only non-season TATL carrier, I put up with this.
But still absolutely reeks that they'd do that to market revenue premium travelers, and for what's arguably the most outdated J seat of any major hub carrier. :mad:


Whilst I sympathise, and agree that on one hand BA's policy is odd, on the other hand, as a BA GCH, I'm glad that the pay-for-seat policy exists, because it means I can nearly always get my preferred seats whenever I book. Given how ridiculously tight BA's legroom is in Club Europe, and how unpleasant aisle seats are in the ying/yang Club World cabin, getting unfettered access to 1F with its plenty of legroom, and window seats in Club World, becomes important.

I was going to write "the policy exists to protect the seat privileges of BA's most frequent flyers" but then again, I have no evidence of that, only chatter on frequent flyer forums and the like. It's more probable that BA have found a way to monetise people's anguish over seat choice. And, as you point out, exploiting that means there's £450 in BA's coffers, not your pocket.
I only turn left when boarding aircraft. Well, mostly. All right, sometimes. OH OKAY - rarely.
 
jumpjets
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Re: BA to split from IAG ?

Wed Jun 16, 2021 2:36 pm

Getting back to the original topic, I seem to recall that the complex group structure for IAG (and possibly Air Fance KLM and Lufthansa) was designed so that each airline entity can be demonstrated to be controlled in its country of incorporation. I think this was initially for the purposes of avoiding any issues arising out of individual bilateral agreements but it may also help in the Brexit ownership dilemmas and avoid the break up of IAG.
 
skipness1E
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Joined: Sun Aug 19, 2007 9:18 am

Re: BA to split from IAG ?

Wed Jun 16, 2021 3:17 pm

I think being asked for seat selection is more about customers not understanding unbundling, it's not intuitive. It's a loco concept that means you only pay for what you need, airlines who don't unbundle cross subsidise. There's a point where it makes sense to cross subsidise or swallow the cost and not unbundle it as a customer offering as it impacts the brand.

Basically balancing revenue against branding, Walsh and Cruz always went the way of the revenue stream, but over time that starts to have a detrimental impact.
 
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LAX772LR
Posts: 13975
Joined: Sun Nov 09, 2014 11:06 pm

Re: BA to split from IAG ?

Wed Jun 16, 2021 8:10 pm

vhtje wrote:
It's more probable that BA have found a way to monetise people's anguish over seat choice. And, as you point out, exploiting that means there's £450 in BA's coffers, not your pocket.

I tend to agree, and would add that they can get away with this for one reason and one reason only: London.

But I really do wonder how much they're losing a dollar to gain a dime (if at all), because were I departing LAX as usual, there's no way I would take them, when (in normal times) there's 6 other airlines offering 11 other nonstops, to choose from.
I myself, suspect a more prosaic motive... ~Thranduil
 
BealineV953
Posts: 287
Joined: Fri Jul 26, 2019 10:00 am

Re: BA to split from IAG ?

Sat Jun 19, 2021 4:25 pm

MIflyer12 wrote:
BealineV953 wrote:
MIflyer12 wrote:

They get reduced price competition on UK-Ireland and UK-Spain routes.
.


Regarding "reduced price competition on UK-Ireland and UK-Spain routes"; BA and Iberia did not merge to reduce price competition in the UK-Spain market, and they'd be fools to think they'd achieve that. History shows that in deregulated markets, where airlines acquire competitors, merge or form partnerships new competition quickly emerges.


You have offered that canard before. New competition doesn't mean they have the scale to be effective competition.
If I wanted happy Mercatus Center 'free markets always work' nonsense I know where to find it.


Hello.
I get the impression that you are not in the UK. If I'm wrong about that, as always, I'm happy to be corrected.
You do not appear to be familiar with the "UK-Spain" market.
If you'd said that the merger of BA and Iberia reduced price competition in the Heathrow-Madrid and Heathrow-Barcelona business class markets, as only BA and Iberia offer a product in that market you might have had a point. However, the business class fares must, must have a sensible relationship to the economy fares so their business class fares are not unrestrained.
Between the UK and Spain, BA / Iberia economy pricing is very much kept in check by the very effective competition offered by a combination of easyJet, Ryanair, Jet2 and Tui. I suspect that most people reading this in the UK would think that easyJet, Ryanair, Jet2 and Tui do between them "...have the scale to be effective competition".
Arguably, the UK-Spain market is one of the most competitive in the world.
Ever since childhood, when I lived within sight of London Airport, I have seldom seen a plane go by and not wished I was on it.”
With apologies to Paul Theroux - ‘The Great Railway Bazaar’

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