[VintageKrug]

I don’t think it is strike-related; being more diversified a strike at BA would have even less of an effect on the share price than would have been the case when it was purely BA.

If you read BT and other sites, many passengers are remarkably sanguine about any forthcoming strike, with most continuing to book trusting that BA will build on its previous achievement operating over 80% of longhaul and believe it is capable of delivering its aim to fly 100% of the normal longhaul schedule.

The uncertainty will be playing a part, but I would suggest the key influencers will have been the stark economic data last week setting out an unexpected shrinkage in the economy, as well as the rise in the oil price connected with events in Egypt and its wider implications for the riskiness of travel.

All this against a background of a steady rise in the share price prior to merger will have given rise to some sensible profit taking.

For context, Lufthansa also lost about 10% of its value in the past ten days, so IAG is not out of step with its sector:

http://uk.finance.yahoo.com/echarts?s=LHA.DE

[CallMeIshmael]

Investors expect a ROI from dividends and/or increase in share value.

Since WW took the BA reigns 5 years ago, in October 2005, only one dividend has been paid – a paltry final 5p per share – the lowest since 1988

http://www.bashares.com/phoenix.zhtml?c=69499&p=irol-dividends

Over the last 5 years, BA shares appear to have lost over half their value having fallen from around £5.80 to around £2.80

http://www.advfn.com/lse/ShareChart.asp?sharechart=BAY

Try as I might I am unable to find a current comparable competitor with this degree of underperformance within the global airline sector.

In this time I believe WW Salary (excluding bonuses) has increased from around £600k to £825k or 37%….another UK corporate fat cat being rewarded for underperformance?

Is this thread title another mendacious statistical manipulation evocative of UK red tops or am I missing something?

[Sparepocket]

And…they’re down 5% in London this morning.

[VintageKrug]

I think Sparepocket/Airpocket is trying to make some correlation to IAG’s share price and the appearance of the ridiculous Ad they spent their members’ subscriptions on.

Unfortunately, they forgot to read the other parts of the newspapers where it was reported that AF-klm are giving warnings of huge losses; this lead the whole sector down:

http://www.cityam.com/news-and-analysis/air-france-klm-warns-profit

[Sparepocket]

To paraphrase Prospero’s question to Caliban in ‘The Tempest’ (with me reading in for Prospero and VK for ‘Ban,Ban,Ca,Caliban’):”How now VK, moody?”
No airline is immune, not even the revered IAG/’Biberia’. Read ’em and weep.
Incidentally, why is no frills EasyJet, valued at 1.62billion pounds, trading higher than IAG/’Biberia’ (valued at 4.55billion pounds)?
What says’t thou Ban,Ban Ca Vintage Krug? (Doesn’t quite have the same ring to it, I know).

[Alasdair]

“Walsh-haters” exist on the forum primarily because:

Embarrassingly, he continually riles AT LEAST 6000 members of one work group, cabin crew, enough to make them want to lose money, staff travel and even face the threat of dismissal through Industrial Action.

That does not even include those who are happy to sit in the wings and complain yet not be quite so forthcoming.

What a sorry state of affairs for a British blue-chip company (even though they have surrended their allegiance to Britain now being known rather boringly as IAG and sourcing the cheapest cost bases over quality).

[CallMeIshmael]

There are wise investors and there are airline investors ….

The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.

— Warren Buffett, annual letter to Berkshire Hathaway shareholders, February 2008.

This industry attracts more capital than it deserves.

— Stelios Haji-Ioannou, founder of EasyJet, reported in Aviation Week & Space Technology, 5 October 2009.

Running an airline is like having a baby: fun to conceive, but hell to deliver.

— C. E. Woolman, principal founder Delta Air Lines

People who invest in aviation are the biggest suckers in the world.

— David G. Neeleman, after raising a record $128 million to start New Air (the then working name for what became JetBlue Airways), quoted in Business Week, 3 May 1999.

If the Wright brothers were alive today Wilbur would have to fire Orville to reduce costs.

— Herb Kelleher, Southwest Airlines, USA Today, 8 June 1994.

[CallMeIshmael]

And some for the void of one iota of emotional intelligence legal-led BA management …

If the employees come first, then they are happy. A motivated employee treats the customer well. The customer is happy so they keep coming back, which pleases the shareholders. It’s not one of the enduring Green mysteries of all time, it is just the way it works.

— Herb Kelleher, Southwest Airlines CEO, in Lee, W. G., ‘A Conversation with Herb Kelleher,’ Organizational Dynamics, volume 23, issue 2, Autumn 1994.

Loyal employees in any company create loyal customers, who in turn create happy shareholders.

— Sir Richard Branson, Virgin Atlantic Airways founder and CEO, 2001.

[Sparepocket]

CallMeIsh…I think it’s unfair to generalise and condemn the airline industry in general. Not all airlines are the same;whereas IAG/Biberia and Qantas (I own shares in the latter and they’ve gone nowhere) may be in the back/on the lower deck of profitability for shareholders (so to speak), others, such as Singapore Airlines (again, I own shares and they’ve done well and pay a respectable dividend in a currency that in the long run will be worth more than the pound, if it isn’t already.Nope, not the US$, the SIng$) and Cathay Pacific have done well for shareholders.
Is Branson really in a position to talk about “happy shreholders”? Isn’t SQ’s share in VS nowhere near the initial purchase value?
But,yes, it helps to have happy employees. At the same time, there are employees who really do take the p**s and musn’t be allowed to corrode the brand value.

[Alasdair]

Do you not think it might be management who are actually contributing to the erosion of BA’s brand value? It is clearly a double edged sword, you force ‘unnecessary’ cuts and conditions on one group of employees (whilst taking less from others and even giving generously to some ie management bonuses of late) then demotivation follows.

BA have performed well on the Market, but they could have performed a HELL OF A LOT BETTER.

[Sparepocket]

And they’re down over 3% this morning.

[IronEagle]

Since IAG as been formed the shares have been going down, down and down.
Mr. Walsh seems to be doing good.

[Potakas]

Tomorrow IAG will publish the 9 month results for BA and the 12 month results of Iberia, will be interesting.

[Tete_de_cuvee]

And they keep falling – Initial price 285 …… now 220 – 23% loss in value.

[Hippocampus]

Egypt, Bahrain, Libya, Japan…

It’s all Willie Walsh’s fault!!!!

Why can’t he suspend reality and make the IAG share price buck the market?!

[Author]

Posts