BA and Iberia merger complete; IAG becomes six largest airline in the world
Iberia and British Airways merged (24-Jan-2011) on 24-Jan-2011 as shares in the new International Airlines Group (IAG) parent are listed for trading on the stock exchanges of London, Madrid, Barcelona, Bilbao and Valencia. Details include:
- Size of combined entity: The new airline group is Europe's third-largest and the sixth-largest in the world by revenues (more than EUR14,000 million), with a fleet of 406 aircraft and 55 million passengers in 2010. The merger will create a combined network of 204 destinations;
- Synergies: The airlines expect annual synergies worth around EUR400 million starting the fifth year following the merger. Some 60% of these synergies will arise from cost savings, and 40% from larger revenues;
- Network: For Iberia, the combination means more facilities for travel to Asia, where British Airways is well established, while British Airways customers will have more options for travel to Latin America, where Iberia is market leader operating from Madrid to 19 destinations. The carriers will also coordinate their services;
- Fares/FFP: It will be possible to combine fares of the two airlines. Passengers will also have access to more than 120 VIP lounges in airports while frequent flyers will also gain from the coordination between Iberia Plus and BA's Executive Club organisations. Benefits will be increased, though the two will remain separate;
- Headquarters: IAG is registered as a Spanish company with tax domicile in Madrid, where its board of directors and general shareholders meetings will be held. Its financial and operational headquarters will be in London. The IAG board, which has already been constituted, is made up of 14 members, seven from each airline. Three from each company will serve on the six-member group management team. [more]
IAG: “Today a major new player in international aviation has been born and British Airways and Iberia have achieved their ambition of playing a full role in industry consolidation. Together, Iberia and British Airways fly to over 200 destinations on more than 400 aircraft. They have joint revenues of more than EUR14 billion and last year carried 55 million passengers," Antonio Vázquez, Chairman of IAG and Iberia. Source: Company Statement, 24-Jan-2011.
IAG: “IAG has a great future ahead of it. The first two airlines in the group, British Airways and Iberia, will retain their strong brands and have complementary networks that operate from two of the biggest hubs in Europe. The merger will lead to annual synergies of EUR400 million from year five and benefit IAG shareholders and British Airways’ and Iberia’s customers and staff. British Airways and Iberia are the first two airlines in IAG but they won’t be the last. Our goal is for more airlines – but, importantly, the right airlines – to join the group. Today is the first step towards creating a multinational multi-brand airline group,” Willie Walsh, CEO. Source: Company Statement, 24-Jan-2011.