[pixelmeister]

The warning shots from WW about restructuring should have most IB employees anxious. Unemployment in Spain is high. With no state subsidy the choices are pretty stark, turn a profit or go bust. How long before IAG set up IB Lite ? a sleeker, more profitable outfit. The unions may complain, they may call strikes, but that will only hasten the demise. I reckon that WW has all the cards on this one and will be using these results to turn the screw on IB management to sort out their cost base and working practices.

[Bruce98]

++ there will be no cow-towing++

I thought that was illegal in the EU, animal cruelty and all that stuff.

http://public.wsu.edu/~brians/errors/cowtow.html

[LeTigre]

I also agree that Iberia has much potential.

According to IAG, the replacement of just half of the A340s with the new A330s will save €100m a year. That is quite a difference.

I think WW should force Iberia to use its Express unit more, even on legacy routes.

However, restructuring in Spain right now is never going to be easy, I am braced for loads more strikes.

If anyone is up to the fight, WW is.

Another thing is that BA’s results are damaged significantly by BMI and its restructuring, so that also brought profits down.

Regarding VS, do not write it off so quickly. With new aircraft and refurbishment, etc. underway right now the only real issue is a lack of destinations. Mumbai is going to be brilliant for transfer passengers and will help us secure more corporate contracts in the uncertain Indian market. Moscow would also be brilliant, if we got the rights, obtaining the BMI slots would be a lot easier.

[VintageKrug]

Le Tigre, how much does BA pay into its pension fund every year..?

[CallMeIshmael]

As the above poster is posting multiple puerile comments on the “Truth about BA” thread am posting my comment here also…

Walsh remains clueless in how to lead a company. Both his strategy and execution are demonstrably dire.

The decision to buy/merge IB was a fundamentally bad decision. Period. It could even result in taking BA down with it.

Walsh chose to ignore all the blatantly obvious signs that both the company and the country was a basket case and will be for years to come. The term PIGS (S for Spain) being in common use throughout the markets for the economies with severe issues – Walsh arrogantly ignored it!

The necessary restructuring of BA was so badly executed the schism Walsh created will last for years. Bad morale, zero motivation remains rife. High churn of cabin staff plus countless expensive initiatives to fix the issues caused by Walsh’s incompetence. The list goes on….

In tough times it is even more important to motivate employees. Leadership 1-0-1 show your team you are in it with them – AND TAKE YOUR NOSE OUT OF THE TROUGH

You do not motivate and win hearts and minds of people by luxuriating, along with the board, in their own multi-million packages yet plead dire need to the rank and file.

Walsh and the IAG board need to take a lesson from recent history……

Recall Nov 2008, the 3 major US auto industry companies, GM, Chrysler and Ford begged for a US government bail out. Each CEO flew to Washington in their separate private jet to plead for $25billion.

http://abcnews.go.com/Blotter/WallStreet/story?id=6285739&page=1

“There is a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hand, saying that they’re going to be trimming down and streamlining their businesses,” Rep. Gary Ackerman, D-New York, told the chief executive officers of Ford, Chrysler and General Motors at a hearing of the House Financial Services Committee.

They were sent packing…

Eventually a bail-out was negotiated, terms included…

The three CEO’s agreed to work for $1 a year and sell their corporate jets.

Walsh needs to get savvy and get his nose out of the trough if he wants support from governments, arbitrators, shareholders, employees and the like.

[CallMeIshmael]

pixelmeister – 03/08/2012 11:31 GMT
“I reckon that WW has all the cards on this one and will be using these results to turn the screw on IB management to sort out their cost base and working practices”.

I beg to differ Pixelmeister …

– The Spanish state, though its ownership of Bankia, is the largest stakeholder in IAG.
– IAG is a Spanish company.
– Just as Spain will have few qualms taking a bailout from Europe, so will IB from BA.
– IAG has recently shown its largesse by paying millions to its board.
– Walsh has a reputation for manipulation then crying wolf. As the Spanish arbitrators have already demonstrated, the Spanish authorities will avoid being the patsy.

[LuganoPirate]

Watch Bankia start to divest itself of those shares soon!

[Hippocampus]

IAG has 4 billion Euros of cash to see through the restructuring of Iberia. Just as BA is now reaping the rewards of the long overdue restructuring carried out by Willie Walsh, Iberia will do so as well.

[CallMeIshmael]

Hippocampus.
Is the 4 billion Euros you refer to actually “Cash and Committed Facilities” – in other words Cash plus a line of credit, which, being junk status they will pay a premium rate for? If so what is the split?

On the financial report 2011 (P120) I can find around 5.5 billion in loans borrowings and obligations with 2 billion in Cash (P122)

[Hippocampus]

No it’s cash.

[pixelmeister]

@CallMeIshmael

Bankia are indeed the largest shareholder with around 12%. However Bankia were relegated to junk status by S&P. Question. how much influence does a company in trouble have on another company’s direction, especially if the latter is trying to become more efficient ??

IAG has headquarters in Spain and the UK although the former is the location of the registered offices. IAG is primarily listed on the London Stock Exchange but has secondary listings in Madrid (and a couple of other exchanges in Spain).

You make the assumption that IB will get a handout from IAG (actually you said BA, but what the heck) but avoid considering that any bailout is likely to have major strings attached.

Are the IAG rewards any larger than other companies of a similar size in this sector ? I’d suggest that the general level of remuneration for board directors af multinationals is over the top. IAG are no worse (and no better) than the rest of the pack.

[Author]

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