24-Jan-2011 1:27 PM

IAG expects more merger activity in 2011

IAG CEO Willie Walsh stated that he expects an increase in international airline consolidation due to rising oil prices (UK-Airport-News, 22-Jan-2011). Mr Walsh mentioned Asia as a likely location of consolidation, as it has seen less consolidation in comparison with North America, South America and Europe. On the topic of the trans-Atlantic JVs, Mr Walsh stated that competition between the three alliances on the North Atlantic “most definitely a better position than between two alliances with a third unable to join in”. He dismissed the anti-competitive concerns voiced by rival Virgin Atlantic over the BA-Iberia-American Airlines JV.

IAG: “2011 will be a year of significant consolidation. It may accelerate a little as a result of the current high oil prices. 2010 was a busy year for mergers but 2011 will be busier. Our industry needs to consolidate. It is part of the solution to its structural financial problems, although it is not the only answer.” Willie Walsh, CEO. Source: UK-Airport-News, 22-Jan-2011.

IAG: “In all, there are 40 airlines operating between Europe and North America, and we have seen no reduction in capacity. In fact, we have seen it grow. The only way the alliances will succeed is if they do compete on both price and service.” Willie Walsh, CEO. Source: UK-Airport-News, 22-Jan-2011.

IAG: “Virgin raised the white flag on its independence many years ago because it is 49% owned by Singapore Airlines, which some people have conveniently forgotten. There are also other airlines in the Virgin Group which participate in codeshares. It highlights the hypocrisy of Virgin that it is jumping up and down about this. What Virgin does not like is that there will be more competition, not less. Their arguments are without any basis.” Willie Walsh, CEO. Source: UK-Airport-News, 22-Jan-2011.

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