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British Airways must move beyond Iberia merger to survive: CEO

12-Jul-2010 12:02 PM

British Airways is interested in an agreement with another carrier within a year of its merger with Iberia, which is expected to merge under a holding company to be called International Airlines (IACG) by the end of 2010 (The Times/The Australian, 09-Jul-2010). The holding company has reportedly been structured to allow for further acquisitions, and CEO Willie Walsh has stated that such acquisitions could happen quickly. Airline’s that the holding company could target TAP Portugal, LOT Polish Airlines, or oneworld partner Finnair. TAM is thought to hold promise for the South American region. BA is awaiting full approval for a strategic alliance with oneworld partner American Airlines, which it hopes will give it a dominant position on the transatlantic market, in addition to its future dominance on EU-South America service after its tie-up with Iberia. Speculation is mounting that Walsh will soon turn his focus on the rapidly expanding Asian market, with oneworld partner Cathay Pacific a likely target.

British Airways: "We have created an entity capable of being scaled up. Our ambition is truly global. We are looking to work on synergies with Iberia, but our focus goes much beyond that and we want to be in a position to avail ourselves of opportunities if they present themselves in the first year…IACG is not about putting BA and Iberia together. It is about creating a platform to create a carrier of global scale." Willie Walsh, CEO. Source: The Australian, 09-Jul-2010.

Walsh stated that BA must expand outside of the UK if it is to survive and prosper, and separately expressed dissatisfaction at the aviation industry’s inclusion in the EU Emissions Trading Scheme from 2012.

British Airways: "We can compete effectively for the next ten years...But in 20 years the UK is going to be in a difficult position because we do not have the necessary infrastructure to compete. We are not going to stand still, so we will look to participate at other hubs." Willie Walsh, CEO. Source: The Australian, 09-Jul-2010.