[SimonS1]

FDOS – sorry, missed your post – not ignoring you.

I haven’t cashed in yet but I did spend an hour or two looking a couple of weeks ago. Plenty of choice and some good options ex LGW right through the summer ( I was looking particularly at GIB which otherwise means a hike up to LHR).

[FormerlyDoS]

Thanks Simon, that’s good to know. I may cash in some later in the year, for a flight for my daughter to London.

[SimonS1]

Of course thinking about it EZY is not just short haul, some other interesting options like Moscow just launched from LGW.

And they don’t usually fly to the secondary airports Ryanair use.

[BigDog.]

93% Iberia pilots union members (Selpa) have voted against accepting the very generous arbitration terms.

http://translate.google.com/translate?sl=es&tl=en&js=n&prev=_t&hl=en&ie=UTF-8&eotf=1&u=http%3A%2F%2Fwww.abc.es%2Feconomia%2F20130406%2Fabci-pilotos-iberia-rechazan-votos-201304061858.html

If the Pilots negotiate improved terms this may well open the door again for the rest of Iberia’s personnel.

The chickens have come home to roost as Walsh failed to restructure BA pilots by imposing low cost terms similar to mixed fleet. Now IB pilots are chancing their arm at being made an exception also. The increasing cost of Willie’s disastrous Iberian adventure continues unabated.

[AnthonyDunn]

@ BigDog. – 12/04/2013 15:42 GMT

[EDITED after original posting]

Just as well for WW that Vueling’s board has accepted IAG’s increased offer.

Should there be no agreement on terms even vaguely compatible with IAG’s IB turnaround plan, then I can entirely envisage that IAG/IB management will progressively shut down IB’s domestic and intra-European services, replacing them with Vueling…

It is far from being out with the bounds of possibility that IB could find itself in the position of being put into liquidation, having run out of cash. In which case, I wonder what the Spanish government and chattering classes will do then – beyond seek to deflect responsibility by blaming the dastardly foreign pirates – for the behaviour of their own countrymen? And, as this will place a massive question mark over the original deal between BA/IB, what are the chances of WW escaping responsibility this time?

In the meantime, the recent CAPA article on how IB compares with other European carriers’ productivity, revenue and ATK per employee says everything that needs to be said.

[BigDog.]

AnthonyDunn @15:51

Agreed, though I doubt the Catalans will show their Spanish kin much sympathy as they see themselves bailing out the rest of the country already. Pity Walsh didn’t save 10 years and £Billions by going straight to Vueling thus by-passing IB altogether in the first place.

http://www.businesstraveller.com/discussion/topic/Vueling-board-accepts-IAG-bid

Edit – Further to Transtraxmans insights below

http://www.murciatoday.com/iberia-pilots-reject-iag-restructuring-offer-and-threaten-more-strikes_15934-a.html

[transtraxman]

I think IAG is very conscious of what SEPLA wants. It was a very cowardly thing for the pilots to not sign the arbitration agreement and so free themselves up to be as bolshie as before. The question is if they have found their match. I would think that they would not get the public on their side this time so will be faced down.

A couple of years ago the air traffic controllers were being just as bolshie. They regularly provoked strikes/slow downs during the holiday periods but in the end went one step too far and were quashed.

The SEPLA pilots will have to remember that and accept the agreement. They are perceived as being too arrogant and self seeking to gain anything this time. There are too many pilots out there waiting to be employed.

If IAG acts astutely then it has everything going for it. The change of CEO(at Iberia) will make a big difference.

[MarcusUK]

http://www.businesstraveller.com/discussion/topic/European-Airline-Productivity

Why have BA been treated as separate from Iberia and also listed as IAG.
This study is flawed if it counts each airline out of its group.
KLM would leave AF standing with their profits.

The results and analysis should treat BA and Iberia as the same group as they are. Therefore the rosy picture of BA produced, is far from the truth.

So perhaps it is time to split the results of the likes of BA and IB, with KLM and AF and see which airline drags the other down?

[BigDog.]

The FT is reporting…

Iberia is planning deeper wage cuts after failing to reach agreement with unions on productivity improvements.

Pilots and cabin crew would face wage cuts of 18% rather than 14% with ground staff facing a 11% cut rather than 7%. The deeper cuts are consistent with recommendations by the government appointed mediator asked to bring an end to strikes.

It appears from the FT article that these further cuts are a result of the pilots rejecting the recommendations even though cabin crew and ground staff had accepted them.

Sepla, the pilots union has not commented.

IMO the offer on the table was going to be as good as it gets.
Selfish and crass behaviour by the IB pilots aiding the demise of IB.

[BigDog.]

@AnthonyDunn- 12/04/2013 15:51 GMT

…It is far from being out with the bounds of possibility that IB could find itself in the position of being put into liquidation, having run out of cash..

I was sceptical Anthony when you wrote the above, that it was a feasible outcome.

However, noting today’s report in the FT wrt Alitalia – it is odds on that Alitalia will go to the wall and that its 25% owner AirFrance/KLM is prepared to allow it, thus setting the precedent for the larger failed carriers to be all but eradicated.
… so you could well be right, either way it could be the last wake up call to Iberia Pilots to get with the program.

and it doesn’t help with the fact that the IMF has revised its predictions for the Spanish economy downwards…

http://www.murciatoday.com/imf-revise-predictions-for-spanish-economy-downwards_16109-a.html

How much longer can wee Willie Walsh hang on.

[AnthonyDunn]

@ BigDog. – 18/04/2013 17:10 GMT

Such an outcome is genuinely not one that I’d like to see come about but this does appear to be the most ludicrous game of “chicken” taking place – with SEPLA apparently determined in their mindset that some shining white knight is going to come along, bail everyone out and they can carry on as before… You end up asking yourself just what are they smoking?!

When is the IAG purchase of those Vueling shares they don’t already hold going to complete? Once the deal is done, this really does give WW and IAG management team the leverage really to apply the pressure to the IB workforce.

[transtraxman]

The acceptances of the takeover offer are due to be finalised tomorrow19th April. The takeover has been recommended by the board but IAG originally looked to get 90% of the company. Now it is looking at a simple majority – just 4.16% of the shares to get the majority.

http://www.es.iairgroup.com/phoenix.zhtml?c=240949&p=irol-newsArticle_Print&ID=1803254&highlight=

One of the shareholders which is probably reluctant to sell is NEFINSA, who I believe hold 13% of the shares. This group is the majority shareholder (75.5%) of Air Nostrum-Iberia Regional. They were instrumental in the setting up of the original Vueling so would not want to sell a profitable investment.

http://www.airnostrum.es/air_01.asp?ruta=HTML\air_nostrum\1_accionariado.htm&titulo=Air%20Nostrum&subtitulo=Accionariado

What does IAG plan to do with Vueling? It could be used to take over Iberia´s short haul routes but it already has Iberia Express for that. Would it be used to extend IAG´s coverage in Europe? Possibly, it has a strong base and transported 14.8 million passengers in 2012. Everything is up in the air.Let´s wait and see.

[BigDog.]

Am not familiar with Vueling corporate by-laws or Spanish Company law/SE rules however a simple majority would be uncomfortable and is unlikely to be a level which a forced buy-out of the remaining equity could then occur.

Interesting information from Transtraxman as Air Nostrum, although having an Iberian franchise, is independently owned. So although IAG would have operational control, NEFINSA/Air Nostrum would likely have a seat on the Vueling board with input into/knowledge of the company’s strategic direction.

Being unable to own Vueling outright would be a poor outcome imo for IAG and could stymie/compromise its ability to bring influencing forces to bear.

Transtraxman – any idea of the level of shareholding required to force a buyout of the remaining equity?… I would expect it to be at least the 75% level….. if it is permitted in the first place.

[transtraxman]

Sorry I cannot answer that. However, I do know that many companies have minority shareholders. Many of these minority shareholdings are in the hands of banks so are just investment vehicles just as is Nefinsa. However, some were made for strategic political reasons (the Basques and Catalans particularly) Even if the minority shareholders are not banks(or previously Savings Banks) then they are quite happy to remain so and also to be tolerated.

I do not think it important for IAG to have 100% of the capital but certainly a larger shareholding than 50.1%. Nefinsa I see as a good partner for IAG. I speculate that IAG changed the offer (higher price but lower acceptance threshold) in order to give Nefinsa a chance to sit out the takeover.

Vueling could be a good vehicle for IAG if it adopts a hands off approach.

[BeckyBoop]

An interesting read – warning it is quite long!

http://www.aspireaviation.com/2013/04/17/iag-entering-new-dawn-2013/

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