[Str8Talking]

I wonder if IAG can get involved in the resurrection of Malev! I always thought that they offered a good network around central/eastern Europe and much of the Middle East. They could potentially expend it to return in the longhaul market too. Or have the LCCs out of BUD killed any such possibility, with or without IAG’s support?

[Tallinnman]

Agree with those saying digest Aer Lingus first and then I think the Finnair option could become interesting if their management and staff can improve their financials.

[MrMichael]

I am not so sure IAG will be in Aer Lingus too much before looking for another target. Whatever and whenever IAG do so it must be an airline that is under performing but with considerable turnaround and growth potential. I am increasingly swaying towards LH or AF/KLM. Although KLM is doing ok, it’s bigger brother AF is a shambles that Willie would be good at sorting out. LH and AF have the very problems IAG have a record of sorting out.

[WillieWelsh]

The competition authorities would never let IAG have anything to do with either the LH group or AF/KLM.

In addition, employment laws in Germany and France are far stricter in both Germany and France than they are in the UK and in neither place is the government in the least bit enthusiastic about changing that. Both enjoy significantly better terms and conditions than the average UK worker with more time off and better benefits often for more money.

Bully boy tactics which is the only strength Walsh has would not wash and very quickly he would be out on his ear. In addition neither AF nor LH has ever appointed a CEO of anything other than their own nationality and I’ll put my pension pot on Walsh not being the first one.

[AndrewinHK]

@mrmichael Aer Ligus isn’t necessarily underperforming, it has a nice set of LHR slots and good potential for further growth on transatlantic, IAG’s only real turnaround story is Iberia, BA was already well into it restructuring when IAG was formed. My concern is IAG becoming too saturated and reliant on the U.S. It needs some diversification in the future, more slots at LHR will be available by reducing BA frequencies to Dublin and Belfast, will they be used for Asia? So far it seems again US is the focus, San Jose, Seattle and Las Vegas increases. Are IAG serious about Asian expansion, is it actually necessary for them? Chengdu is underperforming, KL has been very successful, Seoul is doing ok, but has seen seat reduction from 777 to 787, Vietnam, Indonesia next, but can’t Qatar do that? Lastly for now, what will Qatar Airways provide, is it purely an equity investment for a solid return or is it something that will be used for deeper integration and an on paper joint venture?

[transtraxman]

IAG has no chance with any of the AF/KLM and LH groups.

If you think about AF/KLM what can you do to prise away Transavia and/or HOP? – I doubt it.
In the LH group Brussels Airlines is the only airline not fully integrated into LH. Swiss was a possibility some years ago but LH will not give it up now.

Therefore, you have to look at the rest of of the European market.
Air Berlin (with Niki and Balair) is attractive but has a large shareholding in the hands of Etihad.
Finnair is in oneworld and is an appealing morsel.
SAS has been mentioned but is a member of Star Alliance – that is not insuperable but complicated with three governments involved.
LOT has already been mentioned which has just signed commercial agreements with Turkish. It could still be incorporated into IAG despite that, and despite being a member of Star Alliance.

The alternatives are the small players such as Adria and Air Baltic etc. These are not really that appealing. On the other hand there are LCCs which could well be appealing.

Ryanar and Easyjet are by now too big to be acceptable to the competition authorities. Wizzair and Norwegian might just be big enough to avoid hostile takeovers. JET2 and Monarch might not be interesting as being too narrowly focused on leisure routes.

Volotea on the other hand might well be of an interesting size to tempt Vueling.That would depend on the founders wishing to sell – remember the founders of Volotea are the same who founded Vueling.The two airlines would be very complementary.

Possibilities exist in Europe but have to be examined carefully. Expansion for expansion´s sake is not really a viable policy.

[FDOS_UK]

“Ryanar and Easyjet are by now too big to be acceptable to the competition authorities”

I doubt IAG could afford easyJet, certainly not Ryanair, an airline that carriers more passengers than the entire IAG group stable.

[FDOS_UK]

“Ryanar and Easyjet are by now too big to be acceptable to the competition authorities”

I doubt IAG could afford easyJet, certainly not Ryanair, an airline that carriers more passengers than the entire IAG group stable.

[AMcWhirter]

In any case, Ryanair has said it wishes to become a feeder airline for IAG.

Of course, it wouldn’t be possible at LHR so more likely at DUB.

http://www.independent.ie/business/ryanair-in-talks-with-iag-on-being-a-feeder-for-longhaul-flights-31442380.html

[AnthonyDunn]

@ MrMichael – 31/08/2015 12:15 BST

Hmm, not entirely sure that I go along with your suggestion.

It is one thing taking on first the Irish, then the British and latterly the Spanish trades unions, but France is in another league when it comes to truculence, chauvinism and sheer bloody mindedness. Were it to come to a showdown between WW and the organs of the Fifth French Republic, then my money would be on the latter. If the French government is unprepared to face down their own trades unions on their own account, then there is no chance whatsoever of their doing so on behalf what they would see as an “Anglo-Saxon/neo-liberal” corporate interest. Have you seen what’s been going on around the port of Calais recently – with the self-same Compagnie Républicaine de Securité riot police (that has no qualms about clubbing students) standing around like lambs in the face of striking ferry workers burning tyres and blockading the port.

WW taking on the French trades unions would provide marvellous entertainment value from the margins but I would see only one conceivable outcome: Confederation Generale de Travail 1 – 0 Willy Walsh/IAG. And because he’s nobody’s fool, it’s not a fight that WW would dream of taking on.

[MrMichael]

AnhonyDunn, I think your probably right. However, maybe, just maybe, because the government will not take on the unions does not mean that a business cannot do it. I imagine if he did other business and the government of France would (quietly) back him. Everybody thought Murdoch would lose with the print unions when he moved lock stock and barrel to Wapping, but he won in the end. However I accept it is a high risk strategy and would be too much for IAG stock holders, me included. Looks like LH then!

[AisleSeatTraveller]

The EU would intervene in any transaction between IAG and either LH or AF/KLM (particularly AF)

IAG needs to look east, and the only real candidate is CX (if Swire wants to sell)

[AndrewinHK]

Knowing CX as I do, if Willie Walsh thinks he can break down the unions in Hong Kong he would be a braver man than I. CX has seen falling standards because it simply cannot break the union into making any savings from current crew. A recent example, they created a Crew Menu at the Sofitel in Melbourne to lower the price of meals and subsequently lower the allowance paid to crew. Allowance is based on breakfast, lunch and dinner costs at whichever hotel crew are staying, the union noticed, fought and threatened to strike. CX backed down, and back paid any crew who had been affected by the change. The allowance has since returned to the previous level.

[CXDiamond]

As someone with many years of flying CX behind me and more recently SQ, I would be horrified at the idea of them being part of IAG.

On all levels quality costs and that is reflected in the crew pay and allowances as much as anything else.

Do remember that Walsh, a disgusting little man who I’ve met several times, earns more a day than a new member of cabin crew at BA earns a year. That is simply immoral and anyone who allows it to happen is quite simply corrupt. While he remains there is no place for IAG expansion in the quality end of the market. Better he gets his mate O’Liary to introduce FR as a feeder airline to BA, people probably won’t notice the difference given how far and low BA have sunk.

[Flightlevel]

AF/KLM &LH are not possible for regulatory reasons, & while an improvement at Aer Lingus will be another good example, small airlines are more in need of IAG. CX is partly owned by mainland Chinese so I think very unlikely, & they continue to be profitable. Aegean in Europe, after Finnair, not full LCC’s. If Malaysian doesn’t turn around in a few years they might ask IAG, & South African needs constructive help now. In the days before democracy in South Africa, SAA & BA were close so they understand each other!

[Author]

Posts