PPRuNe Forums - View Single Post - IAG: BA restructuring may cost 12,000 jobs
Old 29th Jul 2020, 16:54
  #1419 (permalink)  
Northern Monkey
 
Join Date: Feb 2013
Location: London
Posts: 145
Likes: 0
Received 0 Likes on 0 Posts
BA will undoubtedly require a bailout. The only question is will it be public, private or both. Personally my money is on the latter, followed by the former.

The politics are interesting. As others have said, does the government really want Brexit Britain to suffer the embarrassment of its national airline going bust within a couple of months of striking out on its own? Not to mention the practicalities of being an island trading nation with no connections to the outside world. Personally I don’t think the conservatives have the stomach to watch Lufthansa, Air France and others move in and take over at Heathrow, it’s just too much of an embarrassment too early in the project. The politics of providing a bailout are easier in some ways and harder in others. We’re a national disgrace on the one hand but we are (were) highly profitable unlike virgin and while we are owned by a Spanish company, we’re not owned by a billionaire tax exile. Fairly good odds that the taxpayers get their money back eventually too.

Personally I think IAG makes for a fairly enticing medium to long term investment opportunity. Profitability was high before Covid, anyone sensible knows that the demand will return and resume its previous expansion over coming years but we will have slashed the cost base in the meantime. Some fairly chunky returns to be had somewhere down the line potentially. The only question I have as a private investor in the meantime is, how much am I going to be diluted?

The current drastic restructuring of the business has all been done with one eye on these realities. Who do you think the shiny brochures about a different future are designed for? It’s not us! When they eventually go cap in hand to shareholders / HMG they will be able to say, “look, we sacked as many as we reasonably could, we retired the old planes, we gave everyone pay cuts, rewrote contracts, we even closed the headquarters down and sold the artwork for gods sake!”
Northern Monkey is offline