[Hippocampus]

TAP does have a good network to Brazil but Lisbon provides little scope for expansion, in contrast to Madrid. And now that TAM is likely to join Oneworld, IAG can serve secondary cities in Brazil via TAP.

It will be at least three years before it can be judged whether IAG is a success or not, but a lot has been achieved in the first year and IAG has the management expertise to make it work.

Also the claim that Willie Walsh steam-rollered a merger for his own personal advantage against the interest of shareholders is baseless and libellous.

[BeckyBoop]

If you look at IAG and their covering over “BRIC” regions. They have and are already being served with investment, acquisitions and partnerships with other airlines have and are significantly expanding.

Brazil- Like I said earlier. Iberia has South America and BA serve some of the major cities across the region direct from London.

Russia – BA have upgraded added to this route with a twice daily 747.

India – Many of the major cities are currently already being served. However what ever happen to the hole left by Kingfisher? From my understanding they only serve a domestic possibly regional but certainly not International. They were due to partner BA to code share and join one world. However since their possible imminent bankruptcy If the kingfisher slots are sitting empty at LHR, BA should use them and increase the availability to India.

China – Again some of the major are served and with the purchase of BMI they can use the additional slots make route and aircraft changes and additional capacity to this region ever with twice daily flights or new markets/destination.

Bullfrog. I think Qatar are deliberately sitting on the fence on this one. There probably watching to see how IAG is handling the situation of the BA and IB tie up. If they buy now there is still a possibility that they will send the shares through a especially if Bankia sell during a bull market.

[IanFromHKG]

Becky, re India: Kingfisher aren’t flying internationally at all now – not even regionally (sadly, I loved them). They seem to be improving a little – they recently announced that all their scheduled flights were operating normally (http://www.flykingfisher.com/media-center/press-releases/media-statement-from-kfa–july-14-2012.aspx), although I suspect their timetable has been restricted somewhat! However, I am not sure there is much scope for them to get back to where they were and I don’t see oneworld membership happening for some time (if ever). I have no idea what happened to their LHR slots – even if they were available, though, I am not sure BA would want to use them to increase flights to India. Despite all the BRICs hype, India’s economy has hit the buffers and the huge potential for growth that everyone saw a couple of years ago has dissipated. In any case, BA does seem to have a large connection network there already – their site lists 18 destinations

China: Well, you say some of the major cities are served. The reality is that BA only fly to Beijing and Shanghai. Now those are certainly two of the top picks, but they are nowhere near the areas of largest growth in the country, and BA’s lack of codeshare connections within China doesn’t make them a particularly attractive way to get to those other centres (http://www.airlineroutemaps.com/Europe/British_Airways_far_east.shtml). The average passenger would in most cases be better flying to HK (which, of course, they can do on BA) and then connecting through on Chinese or HK airlines (CX and its subsidiary Dragonair have a superb network from HK into China (17 destinations), and the flights are generally much better than domestic flights within China – see http://www.dragonair.com/da/en_HK/helpingyoutravel/destinations)

[AMcWhirter]

Ian – surely the “average passenger” departing UK/mainland Europe and heading for regional Chinese cities would be better off with carriers like AF, KL, LH, QR, EK and EY who have all expanded their services over the past year or so.

Connections tend to be swifter and you fly with a reputable airline throughout.

Except for those two major gateway cities you mention, BA does not venture into the regions at all.

[IanFromHKG]

LondonCity, that may well be true, but the focus of the thread was IAG and accordingly we were talking about flying BA for the longhaul part and then connecting (either into India or China). I didn’t mean to suggest there weren’t better alternatives to flying BA on the long-haul part (there are plenty!)

[BeckyBoop]

Ian, Dragon air is part of CX why don’t BA just extend there code share to dragon flights?

What we must remember here is better alternatives usually come at a higher cost and insome cases include a stop on route where as most BA flights are non stop with the exception of routes such as Sydney. BA is generally very good when it comes to their prices (not always) especially if you book in a sale or those of you that are entitled to shareholder discount. I am sure BA will be adding additional services to China in time once they have sorted out the mess at BMI and changed the non profitable routes to the cities in China where the largest growth is happening.

IAG should really look at stream lining internal back of house business processes to give their airlines better efficiencies. Three areas BA always fail are, launching new routes, upgrading of aircraft interior and even bringing in new aircraft. Even though all these things happen they are just done too slowly and certainly can’t be cost effective.

Edited

[IanFromHKG]

Becky, I really don’t know why BA don’t codeshare with Dragonair – it would seem logical, particularly given Dragonair’s affiliate membership of oneworld. Maybe CX don’t want to cannibalise their own (hugely profitable) London flights by making it easier for BA to win custom on the LHR-HKG-China route!

[CallMeIshmael]

There have been several postings commenting of the opportunities for the combined entity but few exploring the threats.

I believe main threats include..

a) Significant exposure to Spanish Economy – the 4th largest in Europe. IB’s major revenue market.

Firstly most European countries and airlines will find the near term testing. However Spain will find it far more testing than other large European economies.

The Economist (21/06) reported “Spain is entering a deep recession” with €51-62 billion being needed by its banks to survive it.
This is a marked departure from the breezy assurances made just a few months prior by officials from the bank of Spain that no additional capital would be needed.

It appears similar to Greece it will take a while for the full truth and seriousness of its situation to out. (eg In May Bankia, IAG’s largest shareholder, was rescued following its auditors Deloitte’s refusal to sign off the banks books amid allegations of €51 3.5billion of inflated assets.)

More recently (23/07) German Finance minister says he doesn’t fear Spain will follow Greece following an agreement to loan Madrid up to €100billion.

The situation in Spain is highly uncertain. How long will it take to recover? Definitely years, some say decades. It is so uncertain that contingency plans for Spain’s potential exit from the Euro are being developed.

It is interesting that whereas the other Euro countries ceased referencing their own currency shortly after 2002 the Spanish never dropped referencing the peseta on invoices and receipts. You will see Pesetas to this day. Did they know something we don’t?

Just as Spain may milk the EU for everything it can, so may IB milk BA/IAG – especially due to the influence of its major shareholder which is ultimately the Spanish government, IAG is Spanish.

Just as I think it would help Spain to leave the Euro so I think it would help BA to be demerged from IB.

Why didn’t Walsh hold off for a year or longer? He ignored all the signs, why?

Further threats tbcontinued..

[VintageKrug]

Your personal vendetta against Walsh should not be tolerated here, whichever of your multiple handles you choose to use…

[Bucksnet]

CMI has made some legitimate comments about Wille Walsh that do not appear to be a personal vendetta.

Walsh has sold BA down the river, and if I were a shareholder I would be rightly concerned. Walsh is not British after all, and he has not acted in the British interest, but has instead followed the European integration path. IAG, like the EU, will probably end badly.

[CallMeIshmael]

This forum would prefer to see a well constructed views, backed-up by evidence. Please feel free Vintage Krug to make a case, with supporting evidence, that the Spanish Economy does not pose a very serious threat to IB and by association IAG. Also that the sign-off was well timed.

Similarly, to maintain standards Vintage Krug, you ought to retract your earlier statement …06/08/2012 08:36 GMT …

“You’ll notice that unions don’t thrive at strong, profitable companies and so they will do all in their power to frustrate that objective.”

…. as it is false. One of the most consistently profitable airlines in the world is Southwest Airlines – it is heavily unionized. The Aircraft Maintenance Technicians’ are represented by the Aircraft Mechanics Fraternal Association (AMFA). Customer Service Agents and Reservation Agents are represented by the International Association of Machinists and Aerospace Workers Union (IAM). Flight Dispatchers, Flight Attendants, Ramp agents and Operations agents are represented by the Transport Workers Union (TWU).

http://en.wikipedia.org/wiki/Southwest_Airlines

Making fallacious statements is more detrimental to the standards of the forum than making grammatical errors. Please avoid making fallacious statements.

I would appreciate evidence to support your statement …
acquisition of Iberia was essential in delivering future growth, and without that acquisition BA could not have purchased bmi.

Thank you

[BeckyBoop]

If you want to get a better idea of who WW his strategy have a look at some of the interviews below…

Willie Walsh, CEO of International Airlines Group, interview at UWE

http://www.youtube.com/watch?v=G9iMCO5TqZI

Willie Walsh talks Leadership

http://www.youtube.com/watch?v=0MFfb7ddDdc

I wonder if he will ever do a TED video?

[Bucksnet]

Indeed CMI. I myself have asked VK questions which have still not been answered, namely: –

How on earth can you state that BA could not of purchased BMI without merging with Iberia first?

What is this unrivalled South American network you say IB has?

Some simple straight answers would be nice, backed up if possible by evidence.

[Bruce98]

I would not hold your breath.

This poster tends towards bluster, rather than facts.

[transtraxman]

“… BA could not have purchased BMI…”
An unfortunate recurring mistake amongst some posters.

[Author]

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