[Str8Talking]

I think this also echoes the situation in many other European airlines, where governments are still paying them heavy subsidies and as a result employees feel they don’t need to do much to earn their big salaries yet kick off at the slight suggestion that in order for the airline to survive, cuts need to be made. Cyprus Airways springs to mind!!!

[BigDog.]

Iberia ground staff and cabin crew to strike for 15 days – 3 periods Feb-March

http://www.telegraph.co.uk/travel/travelnews/9854685/Iberia-unions-announce-strike-dates.html

The pilots have yet to announce their strike following rejection of the IAG plans 6 days ago.

[BigDog.]

The first wave of strikes have started lasting for 5 days. BA flights to Spain also impacted.

http://www.bbc.co.uk/news/business-21499435

http://www.travelweekly.co.uk/Articles/2013/02/19/43193/fog+adds+to+iberia+strike+disruption.html

http://www.dailymail.co.uk/news/article-2280619/Airports-deserted-Iberia-strike-grounds-Spanish-planes-worldwide-British-Airways-jets-cancelled.html

[Henkel.Trocken]

It seems the impact of this action is wider than first thought as it is impacting on ground services for other airlines. No doubt there is massive pressure from others on Iberia to sort this out ASAP.

[BigDog.]

HT, this should have been mainly sorted before the final marriage, just as the BA Pension shortfall and BA cost base. BA shareholders were severely short-changed from Walsh’s desire to empire build at any cost.

The ironic thing is the strike has whipped up a great deal of anti-British sentiment…. could someone please tell the Iberia workers that this whole debacle was down to an Irishman.

[Henkel.Trocken]

BigDog, totally agree.

What I’m waiting for now is to be told that Walsh has sorted out the Spanish unions and smells even more of roses than before – is that possible?

As we all know, the formation of IAG was driven by BA’s desperation to form an alliance in a world where LH and AF had already formed strong ones. Sadly they were left with a choice at the time of two basket cases, IB and OA. It was never going to work and left them in the position of being number three where they will remain.

Walsh may have met his match.

[AnthonyDunn]

@ BigDog. – 19/02/2013 12:03 GMT

I am at a loss to understand just how IAG could or should have sorted this out before the final tie-up of the two companies. The tie-up deal was done because BA lacks the opportunity to expand from its home base and IB offered the opportunity to expand LATAM coverage from MAD.

If you had watched your own BBC news coverage, you would have read that IB has lost some $1.1 Billion in five years. Under these circumstances, it is very clearly a massive failure of IB management that they have done just about nothing to address the fact that their company is haemorrhaging cash. Your comments would carry far greater conviction and credibility if you were to stick the boot in where it ought to be: the pants of IB management and IB trades unions. Both appear to have been living in cloud cuckoo land whilst FR and others have undermined their business.

Which then makes the case very strongly for the so-called “bully boy” tactics of Willy Walsh. Also known as a cold, harsh dose of economic reality. As the BBC item noted, his tactic is first to attempt to negotiate and then, when this fails, to act unilaterally. As also stated, this is the management style displayed at EI and BA so it should come as no surprise to anyone.

As for the “anti-British sentiment…” Well, booo-hooo. Are you or anyone else losing any sleep over striking Spanish cabin and ground crew sticking a Union flag on the side of a model IB plane with “repel boarders” on the side. I am not.

Finally, before anyone dares suggest that I am a WW stooge, I have repeatedly stated my view that WW’s position and that of the IAG directocracy would have been immensely stronger should they have taken substantial pay cuts in line with that demanded of their work force. Instead, and in a classic display of Anglo-Saxon “one rule for us, another for the plebs” management by bad example, they trousered substantial additional wads of cash whilst everyone else took a bath. I utterly deplore this and find it contemptible.

[BigDog.]

Anthony,

Before a merger or acquisition of businesses, it is normal for a due diligence to occur. This is an opportunity to look beyond the balance sheet and get a fundamental understanding of the underlying business, its issues as well as opportunities within the entity.

As it was a merger, IB clearly did its due diligence on BA, forcing it to sort some significant pension and cost issues out prior to the wedding and terms being decided.

Although Walsh was not at the helm for the initial courtship, Walsh was at the helm at the engagement and subsequent Wedding. All the problems that we see now within IB should have been identified and begun to have been rectified BEFORE merger. Just as BA had to sort the pension and cost base.

Unlike IB who pushed for BA to get its act together, it appears Walsh failed to push IB to get its house in order. In hindsight it appears the merger was more for the self-aggrandizement of Walsh than for BA shareholder value.

A situation exacerbated further by promises made to IB pilots now being reneged upon.

[AnthonyDunn]

@ BigDog. – 19/02/2013 14:30 GMT

I recall, from my time at London Business School, that research showed over half of all M&As fail to deliver on the claimed objectives of the transaction. That was back in the 90s and my subsequent experience since (and that of Senior Management) has shown this by the bucket load.

Returning to WW/IAG, so if IB management had grown the cajones to do the necessary pre-deal, I wonder what would it have done to the respective valuations? There is an alternative interpretation (this is entirely speculative on my part BTW) that the IB inefficiency was factored into the pricing and respective %s of the company between the respective shareholders in the expectation that, post-deal, the axe would be wielded. Further, because this was being done by IAG rather than a pusillanimous IB management, it would actually go through rather than be neutered by yet another intervention by the Spanish government, fearful of further job losses on its watch.

There are any number of ways of skinning this particular cat. You may well be right that WW failed to do any reciprocal due diligence but I rather doubt it. Presumably BA have their house brokers (Deutsche Bank and Barclays Capital) to assist with such tasks?

A final question: what if WW’s strategy works, a post weight-loss IB flourishes and the IAG share price surges? Yes, entirely speculative, but what will your views be then?

[FormerlyDoS]

Anthony

Do you realise that the word cajones, in Spanish, means ‘drawers?’

Perhaps they could have got them at Ikea or are you thinking more M&S?

[AnthonyDunn]

@ FormerlyDoS – 19/02/2013 15:05 GMT

Would substituting an “h” for the “j” give the correct meaning – as in “testiculo”? Very clearly, I am not a Spanish speaker.

[FormerlyDoS]

‘fraid not.

But you could try cojones.

[AnthonyDunn]

@ FormerlyDoS – 19/02/2013 15:05 GMT

As in “guts”… according to my AppleMac translator.

[NameRemoved-18/12/14]

Exactly Anthony

guts = balls

[BeckyBoop]

Anthony, Willie Walsh has already said that he never expected Iberia to return acceptable profitability until 2015.

However with demand for flights to south America – with next years world cup and the Olympics on the horizon there after the demand for tickets should of increased.

[Author]

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