IAG CEO Willie Walsh stated the group has no interest in Aer Lingus, with the EUR400 million pension deficit a major concern for IAG, according to reports in the Irish Independent and The Guardian. ”It's [Aer Lingus] got a lot of challenges; it's not helped by the fact that the Irish economy is in a weak position,” said Mr Walsh. “With Ryanair on 30% and the Government on 25%, nobody in their right mind would look to invest in Aer Lingus – that would require both the Irish Government and Ryanair to decide to sell,” said Mr Walsh. “I know a lot about pension deficits – there's one thing you don't want to do and that's go looking for one,” Mr Walsh stated. Mr Walsh said IAG has a greater interest in bmi and TAP Portugal.
IAG rules out Aer Lingus acquisition; bmi, TAP preferred
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Ryanair's 117million pax in 2016 tops European airline groups. The first time an LCC topped rankings
For the first time ever in Europe, in 2016 a low cost airline carried more passengers than any other airline or airline group, as Ryanair's 117 million passengers pushed Lufthansa Group's 110 million into second place. Ryanair had beaten Lufthansa itself, but not the whole Lufthansa Group. IAG's first full year of including Aer Lingus helped it to take third place from Air France-KLM. Europe's number two LCC, easyJet, was ranked fifth.
The big five can be expanded into a big seven to include Turkish Airlines and the Aeroflot Group, although these two had contrasting growth rates in 2016. A chasing pack of middle sized airline groups includes three LCCs (Norwegian, Pegasus and Wizz Air) and three legacy airlines with varying challenges to establishing sustainable profitability (SAS, Air Berlin Group and Alitalia).
Most of the faster growing airline groups in the top 20 are LCCs and the main growth drivers for Europe's big three legacy groups are their LCC subsidiaries. Just outside the top 20 are some fast growing legacy airlines in Eastern Europe, demonstrating the potential there. Nevertheless, unless there is a big merger or acquisition, Ryanair looks set to remain at number one for some time.
IAG plans long haul low cost from Barcelona and mulls a new dedicated brand
IAG has detailed plans to start long haul low cost airline flights from Barcelona to the US, Latin America and Asia in Jun-2017. The project involves two Airbus A330s and will create up to 250 new jobs. Tickets for the first destinations are expected to be on sale by Feb-2017 or Mar-2017.
One of the key outstanding issues is which IAG airline brand will operate the flights. In an interview published on 22-Dec-2016 by La Vanguardia, the widely read and respected Barcelona newspaper, CEO Willie Walsh said that IAG may create a new brand for the project. British Airways, Iberia or even Aer Lingus – which has the lowest unit cost among IAG's long haul airlines – are also possibilities. However, Vueling "will continue in its strategy of European flights".
Among Europe's big three legacy airline groups, IAG is the only one not to have announced long haul low cost plans previously, although its LCC strategy has been the most successful in short/medium haul. Plans by the LCC Norwegian to launch long haul routes from Barcelona in 2017 may have had a catalytic effect on IAG's thinking. In the past IAG has been proactive in creating new platforms, while this move appears a little more reactive.