IAG a House of Cards?

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Viewing 15 posts - 136 through 150 (of 219 total)

  • BigDog.
    Participant

    Qatar has approached IAG with the intent to become its largest shareholder through the acquisition of the Bankia holding. Bankia, is controlled/funded by the Spanish Govt – both have severe funding issues and regard IAG as a non-core asset.

    http://news.airwise.com/story/view/1367970569.html

    Personally I welcome the oversight from a very well run airline. One would hope Al Baker would exert influence to both turnaround the long term declining standards and remove Walsh who has also been a financial disaster having grossly overpaid for IB then overseeing a €1billion loss last year.

    A successful purchase would also signal a declining influence from the Spanish govt. which would be a good thing.


    BeckyBoop
    Participant

    Bigdog WW and Al-baker are actually very good friends. WW is also the guys mentor while in the Oneworld induction.


    AnthonyDunn
    Participant

    @ BigDog. – 08/05/2013 08:11 GMT

    From:

    http://www.qatarairways.com/iwov-resources/temp-docs/press-kit/The%20Story%20of%20Qatar%20Airways.pdf

    it would appear that Qatar Air is 50% state-owned by the Gulf Emirate’s government. Not exactly free from state-owned influence then.

    It is a matter of public record that I am not exactly WW’s greatest living fan but he was brought in to do a job and that is what he has done: stripping out much unnecessary/unsustainable cost. One can argue until the cows come home about the methods and tactics employed just as one can about the mindset and sense of entitlement of some of those who opposed the WW strategy. Of course, BA management could have carried on as before, failing to tackle issues and we’d now have a couple of low cost carriers plus Virgin Atlantic as our national carriers. It really is much like to the fate of Rover Group: a favourite butt of ridicule and then it actually went bang, leaving a substantial hole in the economy and our current account.

    Al-Baker has had the advantage of:

    (a) the implicit taxpayer guarantee afforded by 50% state ownership permitting considerably lower costs of commercial borrowing;
    (b) the benefits of not running a company loaded with historical restrictive working practices that should have gone with the Ark;
    (c) not having to employ people with the kinds of pay and working benefits that many BT complainants about WW take for granted when applied to themselves;
    (d) not running (in the words of O’Blarney) a “pension fund with wings”;
    (e) not having to face low cost carriers like Flyanscare in their own back yard; and
    (f) operating an airline whose aircraft are pretty much nearly all brand new.

    Under the circumstances, the management challenges faced by WW (and team) and Al-Baker are like chalk and cheese. Roy Watts (the architect of BA’s renaissance as a privatised airline and NOT the late Lord King) faced a considerably easier challenge in the 1980s than does any manager of any legacy carrier right now. Pretty much the same can be said for Al-Baker.

    As an adjunct to (b), (c) and (d), Qatar does not exactly have a reputation as a country that demonstrates human and workplace employment rights – unless, of course, you happen to be a member of the ruling family! So, when lauding the Qataris, it would perhaps be wiser to temper the praise with some serious reflection on the “other side” of Qatar:

    http://www.freedomhouse.org/country/qatar

    NB: Edited after initial posting.


    VintageKrug
    Participant

    The Games have well and truly begun.

    As I’ve been hinting for some time, Qatar’s involvement in IAG is central to its future strategy.

    This corporate activity is a watershed moment for IAG, and completes the funding picture to deliver an airline powerhouse – specialising in turning round underperforming airlines – which will be a tremendous boon for IAG internationally for its future internatioanl expansion plans.

    It also joins the dots on the benefits of the Iberia acquisition, which apart form the short term cash in injection which was essential to British Airways’ survival, has made this investment by Qatar much more attractive for them.

    The great working relationship between Al Baker and Walsh has gone a long way to seal this deal, and IAG’s proven expertise in turning round failing airlines adds a capability not seen in most other airline companies.

    This move further consolidate’s Willie’s position, both at IAG and more importantly for the future, at oneworld.

    IAG remains weak in Africa. I would hope to see that corrected in the longer term.


    Henkel.Trocken
    Participant

    ” BeckyBoop – 08/05/2013 08:40 GMT

    Bigdog WW and Al-baker are actually very good friends. WW is also the guys mentor while in the Oneworld induction.”

    And how on earth would you know that?

    Krug: IAG’s proven expertise in turing around failing airlines, which planet are you on today? Which failing airline have they turned around? Iberia is a basket case and BA flounders in spite of all the nonsense you post about it which only your handles believe.

    More views without knowledge.


    BigDog.
    Participant

    @AnthonyDunn – 08/05/2013 08:44 GMT

    “I am not exactly WW’s greatest living fan but he was brought in to do a job and that is what he has done: stripping out much unnecessary/unsustainable cost.”

    The fact that BA and most of the other legacy airlines required a CEO to lead major restructuring has always been accepted. Why I regard Walsh as a mediocre/below par CEO at best is HOW the necessary restructuring was/is being executed.

    Walsh has now been at the helm 8 years.

    His bullying leadership style to restructuring has created huge lasting schisms throughout the company – not just with Cabin Crew. Morale and motivation is sub-zero. He failed to restructure the BA pilots which is not just a highly expensive lost opportunity but also causing great angst in IB and its pilot community who seek equal (promised?)treatment.

    Believe it or not Anthony, a high calibre CEO could/would have executed the required restructuring and secured an inspired, trusting, well motivated, high morale team at the same time.

    Wanting to meet his goals, Walsh failed to influence IB in 2005 to start restructuring before the merger – yet IB had been successful in demanding BA take measures to sort their pension fund and cost base prior to the merger. Walsh then overpaid considerably for a near worthless asset with the restructuring starting 5 years too late and at astronomical expense financially and reputation wise.

    In Walsh’s tenure, just when his initiatives should start yielding benefits the share price stood at over 570 – it is now less than half that. Further, dividends to shareholder have been more scarce that KrugHandles trip reports – just one in 8 years, a miserly 5p per share, yet he continues to line his pockets for serial underperformance…he should take a tip from Morrisons where the directors have been refused bonuses, share awards and salary increases.

    http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10042665/Morrisons-directors-are-refused-bonuses-and-pay-rises.html

    I would have expected BA to have been able to recruit a high performing CEO. Walsh hasn’t the leadership competencies to lead a people centric company. Now Al Baker appears to have schmoozed his way into an insiders position, he will be able to influence to a greater extent in the short term, and with the IB bail out becoming ever more expensive Al Baker and his funding will become increasing influential in the longer term.

    Am not sure if the wolf coming through the door will save Walsh’s bacon or have him for breakfast.

    As I noted in a previous posting, at a recent dinner party, a senior BA waterworlder shared that it was widely accepted that BA’s two greatest assets were its dominant position at a constrained LHR and its legacy cabin crew – though no one would admit that to Walsh or the pilots!


    AnthonyDunn
    Participant

    In a perfect world, everyone would have behaved rationally, decently and not gone in for the trench warfare that marked the BASSA dispute – and NO, I do not want to go there again – that’s been well chewed over before.

    Like you, and as I have oft stated, I consider that the UK directocracy apes the worst aspects of the US approach to corporate governance: snouts in the trough for the board and senior execs, P45s and pay cuts for the “little people”. And I have repeatedly stated that WW should have set an example by taking a pay cut from an already generous pay, pension and perks package rather than a near doubling of this when he took over the helm at IAG. That would have stymied much of the opposition were he and his team to have been seen to be taking the same pain as everyone else. But management from behind rather than in front is often how UK execs appear to like to conduct themselves. I dare say that this is one significant contributory factor to why UK plc has, in terms of its economic performance since 1945, been comprehensively outperformed by Deutschland GmbH; in Germany, the management appear to want to take the staff with them…


    BigDog.
    Participant

    Executive remuneration exists in many guises…

    After overseeing a €1billion loss ….
    …”Willie Walsh’s bonus has been wrestled from him by his board after the British Airways boss refused to surrender the payment of his own accord.

    But the airline supremo, who is chief executive of International Airlines Group, the holding company that owns both BA and Spanish carrier Iberia, still stands to receive £1.65million in shares over the next three years if he hit targets.”

    http://www.thisismoney.co.uk/money/news/article-2289264/Board-forces-British-Airways-Boss-Willie-Walsh-annual-bonus-dismal-fall-profits.html

    This is after a €1billion loss!! Walsh is clearly disconnected with reality. He is in it solely for his own self-aggrandizement .


    BeckyBoop
    Participant

    Fair comment.. BigDog!!

    Out of interest who is responsible for hiring the man?


    VintageKrug
    Participant

    It’s not fair comment at all, Becky.

    The corporate cycle was always going to dictate a drop in profits during the lean years of a recession; in fact BA itself is now generating a strong profit despite this, and Iberia’s losses are being rapidly stemmed due to tough decisions being made by WW and his team.

    The rehashing of the BASSA trench warfare is dull to read.

    I can imagine morale at BASSA is pretty low these days, having been comprehensively trounced in their cackhanded and poorly managed confrontation with BA’s management.

    It’s certainly pretty buoyant when speaking with groundstaff and crew on board, and the City has backed this up with an ever increasing share price (up over 62% in the last six months alone).

    Those supporting the old and oft rehearsed CallMeIshmael/TetedeCuvee-type arguments, with remarkable commonality of views and a Duncan Holley-esque obsession with pilots, are deluding themselves.

    They do at least have plenty of time on their hands now to give vent to their dissatisfaction.

    I’d like to see any sort of transparency of remuneration from BASSA; sadly, their accounts are not even viewable by their ever-shrinking membership.

    The personalisation of debate and focus on Walsh, entirely out of proportion for a genuine business traveller, suggests that some people are perhaps closer to this dispute than they may be owning up to.

    Back on topic, though quite why this thread was bumped to discuss this news…

    It’s great to see the strong relationship between Al Baker and Walsh has delivered a game-changing investment into IAG and further justifies Walsh’s performance-related remuneration.


    canucklad
    Participant

    Just to point out,that the original article linked earlier didn’t mention Qatar Airway……just Qatar……

    QR buying into IAG just sounds like cartel building….


    canucklad
    Participant

    The rehashing of the BASSA trench warfare is dull to read.

    Vk…tut..tut..naughty boy, you then went on to make how many references?


    VintageKrug
    Participant

    It’s just astonishing to see almost exactly the same Walsh-focussed, Pilot-hating views Tete_de_Cuvee (leaving date 21 June 2012) being peddled all these years on by BigDog. (joining date 1st July 2012).

    A remarkable, and entirely unrelated, co-incidence I’m sure you’ll all agree!

    BA is profitable again and all of BA’s legacy Cavin Crew have largely preserved their contracts and rates of pay – something many would criticise WW for not addressing in full – rather like when Bush retook Kuwait, but stopped short of going all the way to Baghdad.

    I’d suggest, however, that the Baghdad offensive becomes all the more likely with this new investment. It is only a matter of time.

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