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RNS Number : 4097C British Airways PLC 12 November 2009
IBERIA MERGER TALKS
Further to recent market speculation, British Airways confirms that the British Airways and Iberia Boards are holding separate meetings today, 12 November, to consider a potential transaction. However, no decisions have been taken and, at this time, there can be no guarantee that a transaction will be forthcoming. A further announcement will be made in due course, if appropriate.
Don't know about the rest of you but I think Iberia is pretty vile - consistently bad service and a very different product overall from BA. I hope this 'merger' never happens.
I have never forgiven Iberia for actually cancelling a flight from Malaga to Barcelona, not putting me on the next flight or the one after that and getting me to BCN twelve hours late. Then denying me any compensation whatsover. a perfectly horrid experience. It would make me really question whether to book on BA ever again if they link up with Iberia. Am already unhappy with BA as they want me to pay them 120 pounds each way to g'tee that i will be actually seated with my partner on a Business class flight to BKK this December. However if they go on strike i will demand a refund and travel on Gulf air !! And this would be cheaper than BA !!! So i actually would like them to go on strike !!! So BA watch out ..Iberia is bad news and when it comes to attitutude and customer service re - wrote the book .. I have never ever been on the receiving end of such arrogance. To say that I loath Iberia is an understatement !!
So the merger will go ahead. So disappointing. Iberia lead the way in rude, offhand service and a couldn´t care less attitude (not all staff, but it seems the majority). BA, although not perfect are way ahead. Both airlines crew of "waiters and waitresses/cleaners" have industrial action issues. IB have been on strike this week and last with BA threatening for December. I know who to avoid in future!
BTers need to learn to separate service standards from corporate deals.
While no-one disputes Iberia's standards are not market-leading, both airlines will retain their unique cultures and operational management teams.
BA will be the larger partner in all this, and I would hope and expect that service improvements would come to Iberia pax as a consequence of this move.
Full BA statement here:
www.bashares.com/staging/phoenix.zhtml?c=69499&p=irol-rns1311
Keith Williams will be the new CEO of the BA OpCo; time to chuck away you Willie Walsh voodoo dolls, gentlemen!
Interestingly, as the new company will be registered in Spain, it looks like shareholders will have to travel to Madrid for the shareholder meeting.
Will they still serve tea and biscuits, I wonder...?
Hi everyone !!
Just a short comment: " a very sad day for the BA employees and their future". This merger could be a probable tool to control the BA employees and their future demands.
BA could hardly cope with its own problems at home--now merging with another problem child---is there any sanity at the moment in Waterside ?
Could anyone enlightened us with some good arguments why BA&IB is a good merger---Vintage Krug---any positive comments for BA---would it be good for the share values performance ?
Hess963 - from the BA announcement:
Benefits of the proposed merger
The British Airways and Iberia boards believe that the principal benefits of the merger include:
Significant customer benefits
• Enhanced customer benefits with a larger combined network for passengers and cargo and continued investment in new customer products and services.
• The combined group will offer its customers connections to 205 destinations and strengthen the oneworld alliance. British Airways’ customers will gain access to up to 59 new destinations, of which 13 will be in Latin America, while Iberia’s customers will gain up to 98 new destinations across the British Airways network. They will also be offered better frequencies and connections, more competitive prices, access to more VIP lounges and enhanced frequent flyer benefits. Improved strategic position within the global aviation sector
• Highly complementary network fit worldwide, in particular combining British Airways’ strong presence in North America, Asia-Pacific and Africa with Iberia’s strong Latin American presence.
• Greater potential for future growth by optimising the dual hubs of London and Madrid.
• Enhanced scale and ability to compete with other major airlines and participate in future industry consolidation.
Significant synergy potential
• Annual synergies of approximately €400m at budgeted exchange rates are expected by the end of the fifth year after the completion of the merger at a cash cost of up to €350m. The synergies will be incremental to the existing value from the airlines' joint business between the UK and Spain. Approximately one third of the synergies are expected to be revenue related (joint selling, network and revenue management benefits) with the balance coming from cost synergies in areas such as IT, fleet, maintenance and back office functions.
• Strong group management team to maximize the combined group’s earnings potential and deliver synergy benefits while maintaining localised operational focus and accountability.
And this will make BA/IB the world's third largest airline grouping.
Should make BA more disposed towards Airbus products; a shame as I rather was hoping for a 747-800 fleet.
Surely an even more attractive prospect to merge with AA now....
Hi everyone !!
First thanks continentalclub for a short summary of the merger's agenda.
But I am still sceptical all about this. IB isn't really a "beauty" to be a merger candidate in the airline industry. As far as the service attitude and overall service product--I think BA is comparing to IB far more better ! Hopefully--BA will influence IB in this sector and not the other way round--otherwise it is definitely a *******!
It is still a plan and both airlines stresse here "... they believe..that it will bring significant customer benefits and synergy potential..." It does not sound so convincing at the moment. I just really hope this belief will bring a fruitful entreprise and not a huge disappointment for both airlines and dearly not fall upon the BA employees in the end.
VK--I don't understand your overall exaggerating good mood ? Would you just let BA and IB prove themselves first--It is such suspicious to read or see someone to have a "blind reliance"---it is just a piece of paper with only possible plans for the future !
About the Boeing and Airbus thing--who cares !! As long those airplanes are flying safely and profitable for the airlines and more important--innovation with ecological sense !!
And about AA---one step at a time--please ! Even Waterside is not built in one day ! So please contain yourself with your " expansion joy" !
Hess
I am very pleased by this- as a shareholder it brings significant benefits.
Service issues at IB are irrelevant to BA; it gives more power to management to deal with Unions and Pension Fund issues (which are n o where near as bad as stated, principally because of recent poor stock market valuations which have recovered significantly).
Excellent news for the BA and IB customer, less good for staff, alas.
With Ib in the bag, the next item will be to deal with BA's staffing issues.
Once resolved, AA is next on the agenda, as clearly stated in the headline of the FT today. I would expect an announcement on that front in 2010.
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