[transtraxman]

IAG has to be looked at as an international holding company not BA in disguise.

That said it could operate anywhere in the world though its properties are in Europe, so that might limit its vision.

Flybe, Stobart and Air Nostrum are feeder airlines with the first having a 15% shareholding by IAG. Maybe investing in all its feeders is a good defensive measure even up to a, larger figure e.g. 33% to look after especially now that Flybe´s associate, Loganair, has just merged with BMI Regional..

Sun Air(Scandanavia) is 15% owned by IAG but grows at a snail´s pace. It does not seem to have a clear connection to either London and Madrid nor Helsinki. That could be a vehicle for focus.

In Europe consolidation is still necessary. Finnair is a strong possibility while two others spring to mind. LOT has a decent area to cover. Meridiana in Italy, does not seem to know its way nor its markets, it also has Vueling battling in that country to gain a substantial presence.

Open Skies (badly named – I much prefered “L´Avion” ) should try to make itself felt -expand from Brussels, Geneva, Nice? It tried to do it before from Amsterdam and could do so again. Thus it could concentrate on French and Dutch/Flemish markets, in which case a name change is certainly necessary.

Outside Europe eveything would be dictated by any limitation on shareholdings. Where the limit is 25% there is no possibility of meaningful control, where the limit is 49% the meaningful control is possible. Are any other markets where a majority shareholding is possible?

Areas lacking in representation are obviously Africa. Here Comair, from Joburg, (15% shareholding) is an obvious vehicle, at least for southern Africa (and St.Helena). Even Nigeria might be a possibility as the N. Government looks to build up a national airline, yet again.

One area of LATAM calling out for a strong presence is Mexico (113 million population). But the airline LATAM might cover that.

With its strong north-south tourist traffic the Caribbean is surely open to explotation. Are there still not enough dependent states/colonies of EU countries to make such an airline attractive? Vehicles for such use could be LIAT, Cayman and/or Caribbean.

Possibilites exist you just need to pick and choose.

[wastedlife]

LATAM haven’t got as far as Mexico – there is former LAN Colombia and that’s as far north as it gets. Both LAN and TAM obviously fly to MEX from their various hubs, but it’s 7/8 hours from Santiago and 9/10 from Sao Paulo.

The financial ratios wouldn’t stop an IAG acquisition/merger of EZY – EZY’s market cap is £6.7bn and IAG’s is £11bn as of today – it could always be structured as a merger in whatever ratio you’d need to get EZY’s shareholders to accept. But I agree the competition authorities would have a field day (and take a long time to make a decision) and I’m not convinced there would be a huge synergy case. Quite aside from which, integrating EZY would be a challenge far exceeding BMI, Vueling or Aer Lingus.

[DavidGordon10]

Not SAS please – I had enough trouble getting my Star Alliance gold card back last time IAG took over a Star member (BMI).

Air Astana? A very central hub for all points East and South.

[DJ_jay_smith]

SAS is a bad idea, they still have a burden from pensions and highly paid staff so that there costs are high.

And of course when looking at airlines outside the EU then a lot of governments like to impose restrictions on investment and/or ownership and often like to interfere with such airlines. So expansion in many places is difficult.

I think that more alignment of existing brands to create consistency within the IAG group and a focus on working with partners to ease transfers and open up new transfer options would be in the best interest.

I haven’t understood why the didn’t push Iberia more into the UK regions, to get more transfer passengers from the regions. Most people from the regions take the view that if they have to transfer then it is often better to avoid London Heathrow, hence why many now opt for the ME3 (as well as price), so why not take advantage and get some transferring with Iberia in Madrid.

[AndrewinHK]

Iberia operating into the UK regions would unlikely stop passengers choosing the ME3. Iberia do not fly further East than Tel Aviv, although a new route to Doha, Tokyo or Hong Kong in 2016/17 is likely. IAG planners know the demographics, Iberia pulling UK region traffic only makes sense if these people are connecting to South America, limited historical links between the UK and South America limit passenger numbers especially outside of London. Perhaps if Iberia expand further into Africa, some further UK region flights might be warranted, but until that time I think it is unlikely Iberia will operate any daily UK region flights.

[MrMichael]

LesMcLaren, NorthEast will give you that. All of Scandinavia (with SAS bases) is East of Britain, it is not all North of us. Check an Atlas.

DavidGordon10, it is your very reasons why SAS would be a good buy. Like him or not, Willie Walsh will make significant inroads to the problems you describe as he did at IB.

I wonder……and thinking big here, if Willie won’t think big too along the lines of of AF/KLM or even……LH. I bet the Germans would love for Willie to sort things out for them. I agree EasyJet would hit regulatory approval, problems but hostile takeovers of company’s larger than the purchaser have occurred before…leveraged buyout with a banks backing is perfectly possible. Would LH hit regulatory issues?

[DJ_jay_smith]

I understand that Iberia into the regions would not compete directly with the ME3 due to the destinations served to the east, but I meant that the same concept applies. That people think that if they have to change anyway then avoiding Heathrow is better.

Of course, I assume that they will try this with Aer Lingus routing through Dublin for some US routes. But of course they don’t have the network that BA does.

[TheLion]

IAG should get involved with the Nigerian or Ghanaian governments in setting up their new national airlines. Ditto Rwandair. Currently it looks like Ethiopian are gonna clean up.

AF, LH, SN have all been involved in setting up new airlines in Africa in recent years. Whither IAG?

In Europe LOT would appear to be ideal with their location and significant O&D which as Poland develops, would only increase. SAS would present a challenge but are an option. TAROM and Ukraine Int’l (once the country has stabilised) might also be good choices given their location on the periphery of Europe.

In the Middle East, El Al, Iraqi Airways or an Iranian airline would be great given their locations. But geopolitics and internal issues need to be resolved first before any research process could begin.

Lastly a new pan-Caribbean airline would be a good idea but to work it would need one or two hubs at most. Barbados (for Europe/Africa traffic), Port of Spain (for South America/Southern Africa traffic) and/or/ Nassau (for US/Canada/Europe traffic) would make the most sense.

[transtraxman]

My point about the Caribbean is that there are still dependencies and colonies of European countries which form part of the tourist trade for the whole region. The question is if any EU carrier has the right to fly to/from any dependent territory to anywhere else in the region. With French and Dutch territories as well as British territories there, can one fly to any of these indistinctly?
The North-South traffic (US & Canada) is tremendous. Why leave it in the hands of the US and Canada airlines?
The route maps of the airlines I mentioned in a previous post make for stimulating speculation. The shareholders are also interesting.

[JohnHarper]

LOT have always guarded their independence carefully and although they use Miles & More as their FFP their integration into the LH group stops there and they are certainly in no way LH owned.

I did read just a couple of weeks ago though that they have entered into extensive deals with TK which include far more code shares and a lot of backroom stuff and engineering so as LOT are viable independently in any event and they are now with TK I doubt they have the slightest interest in IAG.

Interesting that we have two European legacy carriers aligned on the eastern edge of Europe who are both in *A but who are both failing to toe the LH line.

LOT are declining to route people through the LH hubs and TK are definitely on the naughty step for picking up too much premium traffic in Germany to a point where if you fly TK and use M&M LH have significantly reduced your earning potential. Both might move and the TK offering is formidable.

[Bath_VIP]

Another left field candidate is Icelandair. Admittedly they are US focused but they have increased their UK services recently.

[openfly]

TAP…Air Portugal.

[SimonS1]

Bit late on TAP. They agreed a sale last month. I would imagine the competition authorities would get involved as well.

Personally I think the most likely outcome is nothing will happen for a couple of years now – digesting Aer Lingus will take up some resource.

[AnthonyDunn]

@ SimonS1 – 28/08/2015 17:33 BST

+1 Inclined to agree.

One other point that needs also to be borne in mind is that, with 10% of IAG’s issued shares, QR is the largest single shareholder. Presumably the Qataris might also have an opinion on IAG’s future expansion/purchasing plans.

[AndrewinHK]

I agree with @simon1. IAG will focus for the next few years on Aer Lingus integration and Iberia returning to previous markets and expanding Eastwards. All of the suggestions about rwandair and Air Astana are a bit bizarre. I think IAG needs to look East but it is hard to see where they will look, Cathay is owned by Swire and there really is no chance IAG will be able to get hold of CX. Perhaps Finnair, they could expand into the UK regions more and take traffic to Asia.

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