[Anonymous]

[Shearer]

But will the shareholders? At €9.25 per share it’s tempting, is it not?

[BeckyBoop]

Hard to say…

But what about the news that Walsh doesn’t plan on merging it with Iberia?

http://www.reuters.com/article/2013/04/10/us-abu-dhabi-iag-vueling-idUSBRE9390EF20130410

[BigDog.]

Sensible move by Walsh.

Merging Vueling into IB was never on, however a merger with IB Express may have been considered it would however also be pointless.
Given the tetchy nature of Spain (Madrid) towards its autonomous regions, keeping Vueling separate will avoid alienating Catalans and may capture Basque traffic. It is a decent, well performing brand which should be retained and not tarred by the reputation of IB.

What a pity Walsh didn’t pick up Vueling to begin with and left the IB money pit to self destruct. The affluent region of Catalonia would have been a far wiser location for BA’s Spanish hub to both buck the dire Spanish economic malaise and launching into Latin America without spending billions and a losing a decade attempting to resuscitate IB.

http://www.guardian.co.uk/world/2012/nov/19/catalonia-vote-future-spain

http://www.bbc.co.uk/news/world-europe-20482719

Though Vueling has a very lean cost base, reasonable synergistic savings could still be made behind the scenes which shouldn’t overly task even IAG’s hitherto maladroit leadership team. Indeed, am sure there are reverse engineering opportunities.

If accepted, IAG certainly will have paid over the odds from a ROI / EBITDA perspective, however it is worth it to buy-out what could otherwise have been a serious competitor in your own back yard.

[BigDog.]

Reports are not clear as to the basis of the buy-out. If it is all cash, then am confident that the remaining shareholders will back it and walk away with a very handsome return on their investment.

I hope it does not involve exchanging Vueling equity for volatile IAG equity, (bouncing between 272 and 233 in recent weeks) as this may be a deal breaker for some.

http://www.reuters.com/article/2013/04/09/us-vueling-iag-idUSBRE9380P020130409

[FormerlyDoS]

Vueling is one of the most efficient airlines in Europe and does with a degree of innovation in product that is superior to Ryanair and Wizz Air, who are the most efficient by most measures.

If IAG can resist tinkering with Vueling and leave it to develop organically and with the same management innovation, then they will truly have a gem in their constellation – in fact, there are lessons to be learned by both BA and Iberia from Vueling.

Edited to add that forum regulars know I have a high opinion of easyJet – I have an even higher regard for Vueling’s product.

One interesting, but controversial, strategic choice would be to dispose of BA and Iberia short haul operations and replace them with an expanded Vueling, as the airline already makes provision for those who wish to have extra space (the so called Duo seats, which is effectively the same as BA’s spacesaver seat approach in CE (leave the middle one empty.)

[AnthonyDunn]

After reading the CAPA analysis;

http://centreforaviation.com/analysis/european-airline-labour-productivity-capa-rankings-104204

I was left wondering, was CAPA around and producing such analyses at the time of the IB/BA merger and, if so, why didn’t BA’s management and “investment bankers” (sorry, I baulk at using the term these days….) read it?

In the meantime, I would now like to try out the Vueling product to see how it compares.

[Author]

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