IAG's next conquest?

BAWLGW · Thu Jan 10, 2019 3:16 pm

What do we think could be IAG's next airline takeover?

I could imagine either BE, AY, AF/KL, or SK. Don't think they'd bother taking over DY now, they are just probably waiting for them to file.

AsiaTravel · Thu Jan 10, 2019 3:18 pm

IAG taking over AF/KL won't happen.They should first focus on keeping Iberia with brexit.

sabenapilot · Thu Jan 10, 2019 3:19 pm

I think all of IAG's current attention is on Brexit and on the consequences it may have on their corporate structure.
If the EU indeeds intend to play hardball like some reports do, IAG will have no other choice but to break itself up in 2 even!

upperdeckfan · Thu Jan 10, 2019 3:35 pm

IAG wouldn't be allowed to takeover/merge with AF/KL due to EU anti-trust

Having said that, fully agree that their current focus must be on Brexit, we'll have to wait to see how they come out of it

chunhimlai · Thu Jan 10, 2019 3:44 pm

Their biggest challenge now is Brexit

a350lover · Thu Jan 10, 2019 3:53 pm

I agree IAG is already pretty happy with the portfolio of airlines under the group. Biggest development project at the moment I believe is LEVEL, with its different ways to be presented (VIE, ORY or BCN).

I don't see them wanting to acquire anything as big as AF/KL, even if EU anti-trust would allow such a move, something which would never happen. They are rather interested in smaller airlines, with notable presence in regions where they aren't. Here the perfect example is Scandinavia. Moving forward towards a higher level of collaboration with Finnair may happen.

Regarding all the issues which they would encounter if a hard Brexit without agree happens, I can't possibly think of a "stupid" Europe not allowing a 100% Spanish operator (IB) to operate domestic and European flights. This is again lobbying and politics at its worst. No matter what we all personally may think about the UK leaving the EU, why don't we just move forward and start looking for solutions with THIS new scenario? It isn't fair that corporations like IAG which were created with a great level of collaboration and "common market rules" applying for the UK now vanish all of a sudden. I want to trust both the UK and the EU will find ways to protect an industry like aviation under the new circumstances. It's true though, that IAG has been waiting for a Brexit not to happen and they might have underestimated the chances of this worst scenario.

I believe the UK will eventually leave the EU. People won't stop traveling because of that, so let's just be practical and adapt.

cityshuttle · Thu Jan 10, 2019 4:11 pm

Weren’t there comments in another thread regarding a possible acquisition of AY ==> leading to AY loosing Russian overflight rights ?

I could nevertheless see a deeper collaboration as well as maybe AY switching their FF program to IAG Avios.

lhrsfosyd · Thu Jan 10, 2019 4:15 pm

North America covered by BA/EI and through JBA with AA.
South America covered by IB and LA codeshares.
Far East covered through BA and AY codeshares.
South East ASIA, Middle East and Eastern Africa covered by BA and QR codeshares.
Southern Africa covered by BA and Comair codeshares.

Finnish government will not sell AY so my guess will be that IAG wants to improve coverage in West and Central Africa, perhaps through stake in RAM.

JannEejit · Thu Jan 10, 2019 4:16 pm

Perhaps to appease political tensions they could launch a new offshoot 'European' airline using former BA 747's as they retire ? They could design a special 'Euro' livery of IAG all over white with a blue wrap-around tail with yellow stars on it ? Oh hang on a minute... ?

khinstorff · Sat Jan 12, 2019 10:38 pm

Sorry if this has been discussed in previous IAG or Brexit threads, but what are the financial impacts if BA needs to be spun out of IAG? If IB is spun out? It’d be interesting to know the percentage of revenue each provides to the overall pie.

oceanvikram · Sun Jan 13, 2019 6:36 am

AsiaTravel wrote:
IAG taking over AF/KL won't happen.They should first focus on keeping Iberia with brexit.

Agreed, this topic will be hijacked by the Brexit issue.

Whether one likes it or not but IAG will be not be the entity as it once was after brexit, whether hard or soft. As such IAG will not have the strength as Air France-KLM and Lufthansa Group. The ownership structure is an issue not only for IAG but also Unilever (Anglo-Dutch) and many others.

But for fun I'll play along, but I have too many questions. Would be great if you guys can provide some input to the following:
Buy an existing airline based on its financials?
Buy an existing airline based on fleet, network and organisational structure to suit IAG?
Buy an existing airline based on fleet, network and organisational structure to suit Oneworld?
Buy an existing airline that provides what service? Ultra low cost carrier, low cost carrier or full service carrier.

Sitting on my Chairman's toilet seat, I would concentrate on developing Level, or it will go down the path of Joon.

But as an aviation enthusiast, IAG could set up a full serviced airline in Sofia, Bulgaria as connecting airline. Definitely not to the scale of Turkish Airlines, but cover the globe enough to not to trespass on British Airways, Iberia and Aer Lingus transfer market, including Finnair. Hey, I can dream.

716131 · Sun Jan 13, 2019 7:42 am

Not for Air France/KLM. They are a member of Skyteam and I think they have a JV with Delta Air Lines. I think it can be possibly TK, because they lose a partner with LH long time ago.

aviationaware · Sun Jan 13, 2019 8:10 am

BAWLGW wrote:
What do we think could be IAG's next airline takeover?

I could imagine either BE, AY, AF/KL, or SK. Don't think they'd bother taking over DY now, they are just probably waiting for them to file.

The Air France unions went nuts over a Canadian being their CEO. Do you honestly think they would tolerate a British owner? That would be the strike-fest of the millennium.

slcdeltarumd11 · Sun Jan 13, 2019 8:11 am

They won't be buying another airline. They have lots of expansion possibilities with LEVEL and lots to work thru with brexit when those plans are finalized.

winginit · Sun Jan 13, 2019 8:44 am

slcdeltarumd11 wrote:
They won't be buying another airline. They have lots of expansion possibilities with LEVEL and lots to work thru with brexit when those plans are finalized.

Not to mention EI hasn't even yet been brought into their Atlantic Joint Venture with AA/IB and there's still a lot of co-location work to be done with EI.

One thing at a time.

cityshuttle · Sun Jan 13, 2019 8:53 am

Maybe in the longterm: JU / Air Serbia ?

And get it into OW as connecting partner later on ?

They have a good network in Europe, especially the Balkan region, their product after EY got involved has improved very much.

And last, maybe EY is happy to get rid of that last EU subsidiary sooner or later ...

Kashmon · Sun Jan 13, 2019 9:06 am

Cathay
BA has always wanted to buy them.

oceanvikram · Sun Jan 13, 2019 9:30 am

Kashmon wrote:
Cathay
BA has always wanted to buy them.

Sure if the rules and regulations change and money grows on trees, they might as well consider buying American Airlines and Latam as well.

PatrickZ80 · Sun Jan 13, 2019 9:53 am

sabenapilot wrote:
I think all of IAG's current attention is on Brexit and on the consequences it may have on their corporate structure.
If the EU indeeds intend to play hardball like some reports do, IAG will have no other choice but to break itself up in 2 even!

They'd have to break up indeed, but not in 2 even. After all, most of IAG is in Europe (Iberia, Aer Lingus and Vueling). It's only British Airways that is on the other side of the Brexit. In the worst case this would mean British Airways to be seperated from IAG. However I don't think it'd come that far. After all, that would mean other EU airline groups with a UK airline (Wizzair, Norwegian, etc) or the other way around (EasyJet) would be seperated too.

lhrsfosyd · Sun Jan 13, 2019 11:05 am

slcdeltarumd11 wrote:
They won't be buying another airline. They have lots of expansion possibilities with LEVEL and lots to work thru with brexit when those plans are finalized.

They're in talks to buy Norwegian. Do not post on this forum if you're not an expert.

SCQ83 · Sun Jan 13, 2019 11:11 am

I think Norwegian, Wizz Air or Volotea would be good fits.

JannEejit · Sun Jan 13, 2019 11:17 am

lhrsfosyd wrote:
slcdeltarumd11 wrote:
They won't be buying another airline. They have lots of expansion possibilities with LEVEL and lots to work thru with brexit when those plans are finalized.

They're in talks to buy Norwegian. Do not post on this forum if you're not an expert.

I thought they'd abandoned plans to buy Norwegian and were actively trying to sell their stake holding ? Buy hey, I'm no expert !

senatorflyer · Sun Jan 13, 2019 11:29 am

JannEejit wrote:
lhrsfosyd wrote:
slcdeltarumd11 wrote:
They won't be buying another airline. They have lots of expansion possibilities with LEVEL and lots to work thru with brexit when those plans are finalized.

They're in talks to buy Norwegian. Do not post on this forum if you're not an expert.

I thought they'd abandoned plans to buy Norwegian and were actively trying to sell their stake holding ? Buy hey, I'm no expert !

From what I recall reading they are still in talks.

AY would be the obvious target but it comes with complications which makes AY not as attractive anymore.

Probably a good fit would be LOT.

What I think BA (before the IAG days) really f*%#{d up was the failed LX takeover. Like always, they were too stingy.

JannEejit · Sun Jan 13, 2019 11:51 am

senatorflyer wrote:
JannEejit wrote:
lhrsfosyd wrote:

They're in talks to buy Norwegian. Do not post on this forum if you're not an expert.

I thought they'd abandoned plans to buy Norwegian and were actively trying to sell their stake holding ? Buy hey, I'm no expert !

From what I recall reading they are still in talks.

AY would be the obvious target but it comes with complications which makes AY not as attractive anymore.

Probably a good fit would be LOT.

What I think BA (before the IAG days) really f*%#{d up was the failed LX takeover. Like always, they were too stingy.

I've only ever seen reports that they'd lost interest in Norwegian now. But looking at this article, perhaps the next IAG conquest ought to be Heathrow itself...

https://www.ft.com/content/d694b844-970 ... 1e803ee64e (trial subscription required)

British Airways owner IAG looks to sell Norwegian Air shares

Willie Walsh, chief executive of British Airways owner IAG, said the group is looking to sell its shares in low-cost carrier Norwegian Air after failing to negotiate a takeover.Airline group IAG bought 4.6 per cent of Norwegian earlier this year as a prelude to discussing a takeover, but had two proposals rebuffed.Mr Walsh said: “We’re not going to keep the shares, we’re not an investor. We bought that small stake to initiate a conversation and if that conversation is not going anywhere, as it’s not, we’re not going to hold on to those shares.”Norwegian said it had received several expressions of interest from “serious players,” including rival airlines such as the Lufthansa Group. “We are happy to have IAG as an investor. Needless to say, they are not the only interested party that has approached us,” said Bjorn Kjos, Norwegian’s chief executive.Bjorn Kise, Norwegian’s chairman who together with Mr Kjos owns 27 per cent of the airline, said: “When you are going through a phase of big expansion, it makes the company — with all its costs, its investments — vulnerable.”Mr Walsh also hit out at Heathrow airport, which has a £14bn scheme to build a third runway but which has also paid large dividends to shareholders.“I’m all in favour of a well-run company paying dividends, but that’s not Heathrow,” Mr Walsh said. “Heathrow is a quasi-monopoly that games the economic regulation environment to raise the charges that they can levy and has done well in the past to convince the regulator to reward them by spending more money.“My objection is to the fact that they’re incentivised to waste money and I’m particularly concerned that the incentive remains in place in the context of Heathrow.”In its half-year results on Friday, IAG reported strong pre-tax profit growth, up almost a quarter to €1bn. At lunchtime its shares were down 3.1 per cent. Norwegian’s shares were up 1.8 per cent.

senatorflyer · Sun Jan 13, 2019 12:13 pm

JannEejit wrote:
senatorflyer wrote:
JannEejit wrote:

I thought they'd abandoned plans to buy Norwegian and were actively trying to sell their stake holding ? Buy hey, I'm no expert !

From what I recall reading they are still in talks.

AY would be the obvious target but it comes with complications which makes AY not as attractive anymore.

Probably a good fit would be LOT.

What I think BA (before the IAG days) really f*%#{d up was the failed LX takeover. Like always, they were too stingy.

I've only ever seen reports that they'd lost interest in Norwegian now. But looking at this article, perhaps the next IAG conquest ought to be Heathrow itself...

https://www.ft.com/content/d694b844-970 ... 1e803ee64e (trial subscription required)

British Airways owner IAG looks to sell Norwegian Air shares

Willie Walsh, chief executive of British Airways owner IAG, said the group is looking to sell its shares in low-cost carrier Norwegian Air after failing to negotiate a takeover.Airline group IAG bought 4.6 per cent of Norwegian earlier this year as a prelude to discussing a takeover, but had two proposals rebuffed.Mr Walsh said: “We’re not going to keep the shares, we’re not an investor. We bought that small stake to initiate a conversation and if that conversation is not going anywhere, as it’s not, we’re not going to hold on to those shares.”Norwegian said it had received several expressions of interest from “serious players,” including rival airlines such as the Lufthansa Group. “We are happy to have IAG as an investor. Needless to say, they are not the only interested party that has approached us,” said Bjorn Kjos, Norwegian’s chief executive.Bjorn Kise, Norwegian’s chairman who together with Mr Kjos owns 27 per cent of the airline, said: “When you are going through a phase of big expansion, it makes the company — with all its costs, its investments — vulnerable.”Mr Walsh also hit out at Heathrow airport, which has a £14bn scheme to build a third runway but which has also paid large dividends to shareholders.“I’m all in favour of a well-run company paying dividends, but that’s not Heathrow,” Mr Walsh said. “Heathrow is a quasi-monopoly that games the economic regulation environment to raise the charges that they can levy and has done well in the past to convince the regulator to reward them by spending more money.“My objection is to the fact that they’re incentivised to waste money and I’m particularly concerned that the incentive remains in place in the context of Heathrow.”In its half-year results on Friday, IAG reported strong pre-tax profit growth, up almost a quarter to €1bn. At lunchtime its shares were down 3.1 per cent. Norwegian’s shares were up 1.8 per cent.

https://simpleflying.com/iag-gives-norw ... -takeover/

JannEejit · Sun Jan 13, 2019 12:20 pm

So that's a definetly/maybe then...

jfk777 · Sun Jan 13, 2019 1:02 pm

Kashmon wrote:
Cathay
BA has always wanted to buy them.

If it didn't happen when the British controlled Hong Kong its not happening now. DO you see Air China selling their 30% stake in Cathay ? Air China would love to merge themselves with Cathay. IF Cathay ever merges it would like be into a larger Chinese airline group.

IAG should buy an airline in Scandanavia, SAS would be a tasty meal which can help to Asia like Finnair could too. BA connects lots of Swedes and Norwegians over LHR to the world. Everything in western Europe has merged or is a mess except for TAP which would be interesting if IAG suddenly wants to conquer Brazil.

PatrickZ80 · Sun Jan 13, 2019 1:18 pm

jfk777 wrote:
Everything in western Europe has merged or is a mess except for TAP which would be interesting if IAG suddenly wants to conquer Brazil.

They got Iberia for that, no need for TAP. Besides, TAP is a Star Alliance member and the key to South America for Lufthansa, SAS and LOT. If ever IAG would bid on TAP, I can see Lufthansa bidding higher as they don't want to lose their key to South America.

As for Scandinavia and eastern Europe, perhaps a smaller player like AirBaltic would work for IAG. I can't see them acquiring a big airline like SAS or LOT, both of which are in Star Alliance. AirBaltic isn't in any alliance and codeshares with airlines from all alliances.

senatorflyer · Sun Jan 13, 2019 2:19 pm

PatrickZ80 wrote:
jfk777 wrote:
Everything in western Europe has merged or is a mess except for TAP which would be interesting if IAG suddenly wants to conquer Brazil.

They got Iberia for that, no need for TAP. Besides, TAP is a Star Alliance member and the key to South America for Lufthansa, SAS and LOT. If ever IAG would bid on TAP, I can see Lufthansa bidding higher as they don't want to lose their key to South America.

As for Scandinavia and eastern Europe, perhaps a smaller player like AirBaltic would work for IAG. I can't see them acquiring a big airline like SAS or LOT, both of which are in Star Alliance. AirBaltic isn't in any alliance and codeshares with airlines from all alliances.

Nope, Iberia can’t compete with TAP on the Brasilian market. Besides Lisbon is not Madrid. You keep forgetting that Brazil and Portugal have very close relations.

LOT isn’t too big. LOT is also not too happy with Star Alliance and LH. SAS would be a slap in the face of AY, IAG is not going to do that. Switching alliances isn’t unheard of and has happened multiple times before.

Lewton · Sun Jan 20, 2019 12:02 pm

BAWLGW wrote:
What do we think could be IAG's next airline takeover?

I could imagine either BE, AY, AF/KL, or SK. Don't think they'd bother taking over DY now, they are just probably waiting for them to file.

Do they have to buy more airlines?
I think they need to focus on organic growth and on preparing for the post Brexit reality.

In parallel they should be ready to grab any market share is they can from potential bankrupted or simply downsizing competitors (eg Norwegian closing bases).

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