Hola mach, cuánto tiempo sin verte!
Apparently a ex- Director of Flight Operations or chief at Spanair was telephoned and offered the position of the new merged Vueling ( with Clickair )
I was not aware, but it's possible. Lars Nygaard (ex-CEO of Spanair) was hired by Vueling too a year ago. I think that this is pretty normal.
I dont think for the moment Clickair or Vueling will hardly even be mentioned at the merger discussions of Iberia and BA. They have much more important issues to discuus and resolve.
The merger of Clickair and Vueling is going on. Clickair is linked to Iberia and it has some goals and constraints set by Iberia, but it is self-managed and independent to a certain extent. I know that some of my PPRUNEmates disagree, but I still think that Alex Cruz was free to manage the company as he wanted, always under certain constraints set in the contract of constitution of Clickair (Do not enter MAD, contract the maintenance and the handling to Iberia, put the Iberia code on your flights...) and always thinking in some goals (profitability for Iberia as a shareholder, maintenance of a network out of BCN on behalf of Iberia, helping Iberia to fight against Vueling, Easyjet, and Spanair), etc.
Of course, most of these constraints are benefits for Clickair, as contrating many services to Iberia allows them to get discounted fares, or having the IB code on their flights is a way to sell a lot of tickets through travel agents. So, the unique constraint was "keep out of MAD", basically. Everything else was decided internally by Clickair, in my opinion.
What I'm trying to say is that Clickair has its own agenda. Now BA and IB are in talks to merge, and yes, it's true that there is a lot of things to discuss. But the Clickair-Vueling merger is being designed from Barcelona, not from Madrid. So, Clickair is not affected by what happens to Iberia. Maybe the ownership of the new Clickair-Vueling will be affected (imagine that the new holding thinks that the new Vueling has to be sold, for example), but not the decisions of Clickair itself.
Clickair is merging in order to become profitable, and because it needs it, no matter the merger of Iberia. Then, of course, if Clickair decides to merge, Iberia will try to maximize the weight of Clickair (... which is the same as saying the weight of Iberia) in order to maximize its own interest.
To sum up, Iberia is participating in the merger of Clickair, and this is being done simultaneously to the merger with Vueling.
So it looks like for some of the new management positions they may be going external. This would make sense as this is a merger and not a takeoover niether side could complain too much.
Well, I don't know if a majority of positions will be external, but some will. The others will be a mix of Clickair and Vueling executives.
Are the new managers of Vueling going to go for efficiency or political appointments ?
Efficientcy, as always. Both Clickair and Vueling took always the decisions motivated on profitability. If a route needs to be cancelled, they cancel it. Actually, Clickair already cancelled / reduced many routes from BCN, said "no" to the politicians when they asked the company to offer connections out of BCN, etc. Vueling too: they moved to Madrid when Barcelona was a difficult airport because of Clickair even if the Catalan government was not very happy, they are firing employees, etc.
El Gobierno piensa en Iberia para rescatar a Spanair
I don't have more information than intuition, but I hardly can imagine the government having plans for Spanair in any case. The company belongs to SAS, and it will be SAS who will decide what to do.
Of course, the government is scared because of the precedents of Air Madrid, who shut down unilaterally in ten minutes and said "good bye", leaving the employees and the clients alone. Of course, this cannot happen anymore. A company can cease the activity, but it has to reallocate the passengers in other airlines, take the employees back to home, etc. etc. They cannot just send an e-mail to Civil Aviation with the list of the passengers and tell the minister to do whatever she wants with them.
Spain is a country where the airlines play an important role in the domestic sector. It's true that the high speed train is reducing the impact, but it's still very important for the economy and the comunications. At its turn, Spanair is one of the most important domestic companies. It's not a small carrier like Lagun Air or Fly Sur, it's a company that transports 10M passengers per year (+ cargo), who has a 25% market share in the BCN-MAD route, etc. If Spanair ever ceased the activities, it would be a big gap in the market. Of course, the government needs to anticipate some solutions just in case this happened, since many flights would be cancelled, all the staff fired, thousands of passengers affected, some terminals of the airports would be emptied, etc. (Spanair is one of the key carriers of Madrid's-T2, and in BCN the new terminal could have been granted only to Spanair and Star Alliance, so imagine the big gap in the airports.)
If Spanair exited the market, the other carriers (including the AVE) would need to increase their capacity. It's true that Spanair have a load factor which is not close to 100%, and this means that in this case, with much less than 60 aircrafts, the existing airlines could substitute Spanair, but anyway, it would be a lot of seats.
Out of BCN, Clickair-Vueling would automatically substitute Spanair. Basically, they could do this by eliminating their overlap without avoiding the forecasted fleet reductions. The aircrafts are large enough to hold more passengers from Spanair if they do not cut the fleet. Now, Clickair = 26 aircrafts and Vueling = 19. Fair enough to cover most of the capacity if they operate with 100% load factors. Then, Air Europa and EasyJet would for sure increase the capacity inmediately. Air Europa would be the natural substitute: an alternative carrier to Iberia/Clickair-Vueling, with a point to point operation and a base in Barcelona, business class, an alternative alliane, etc. EasyJet also could open a base. They wanted to do it, but the arrival of Clickair "broke" the market and pushed the profitability of the domestic operations really down. That's why they decided not to open it. But if a carrier as Spanair, important in BCN, ceased the operations, I'm sure that EasyJet would set the base and start domestic flights from there.
In MAD, again Iberia, Air Europa, Easyjet, and Ryanair too, would "eat" the cake of Spanair. Do not forget that Vueling also has a base there, so I wonder if Iberia would add more aircrafts or if they would add more Clickair-Vueling aircrafts, since most of the passengers of Spanair were point to point, and Clickair-Vueling could replicate the needs of these passengers without depending on labor agreements and high costs.
Spanair would be a problem in the short run for the government and the country, but then, some months before, I "promise" that many other carriers would take its production. And Iberia will be a candidate, but... I'm sure that the government will not be for more market share of Iberia, having other airlines that could replace Spanair, as EasyJet, Ryanair, Air Europa.... or who knows if Air Comet (Marsans wanted to buy Spanair, so... why wouldn't they start short haul operations through their subsidiary Air Comet?) or other existing companies such as Iberworld, etc. The government will not benefit Iberia because they told them that they would not say "OK" to the Iberia-Spanair deal, maybe even if they sold Clickair it could be rejected.
So the conclusion is that I don't see the government "killing" Spanair and promoting Iberia as the firm who has to inherit the company. Maybe the government is making sure that Iberia could help them to reallocate the passengers, and maybe the government is also contacting some airlines to see if there could be a "big pockets" investor who could save Spanair in case of SAS leaving the company. But this would be "just in case" only. And if it happened, I doubt that the government would support a vertical integration of Spanair in Iberia, unless they sold the new Vueling. What is more, I'd like to see if Lara would merge with Clickair in this case. The lost of Spanair would imply a lot of opportunities for Vueling in BCN and MAD. Maybe (I don't know) in that case they could decide to keep being two firms --Vueling and Clickair--, as the end of the excess of supply (which is a bloody bath for both) would stop, and who knows if their losses too. Maybe without Spanair there is space for both Clickair and Vueling.
In any case, let's hope it doesn't happen. Spain needs Spanair (as a SAS company or under a new ownership different than Iberia, who cares). As the guys said in "para el gato volador" thread, in Spain we are a bit worried about the evolution of the market, with many many many losses: Spanair in troubles, Air Comet not that much but still having losses and problems, Futura ceasing the activity, AeBal with an uncertain future (let's see if AeBal becomes the "new Futura" or not), Plaza Servicios Aéreos leaving the market after the Expo of Zaragoza, LagunAir reducing capacity and looking for help because they feel in not a very good shape, Clickair-Vueling trying to survive with a new merged structure and a new business plan, etc. etc. At this speed, Spain will become a low-competitve market (from the current status which is being one of the most competitive in the EU). The positive thing is that still some companies (Iberia, Air Nostrum, and AirEuropa, basically) show quite normal figures, and of course we have the competition of the AVE, EasyJet, Ryanair, and Air Berlin. Even if the number of competitors drop, Spain still has an imortant number of airlines operating "fiercely".
One advantage that Vueling has is its independance from Iberia. Iberia can use this to its advantage.
Sure. As I said before, I do believe that Iberia sets some conditions as a shareholder (well... any shareholder in any industry influences the decisions, that's for sure), but then leaves the managers decide without interferences. I think that Iberia's first aim (profitability aside) is making clear the separation of Iberia and Clickair-Vueling to avoid any kind of mix.
Something different is that IB could maybe remove some conditions. For instance, maybe now they decide to remove the "keep away from MAD" rule (although it's not still clear), and of course this would affect Vueling. But I don't see Iberia dictating what to do. Iberia is confident that Alex Cruz will be able to achieve profitability, and they have "blind faith" on him. That's why I consider that Iberia doesn't care too much (or nothing at all) about the non very stategic decisions of Clickair-Vueling.
There could be questions from the Officina of competencia.
The National Comission of Fair Trade will evaluate the impact of the Clickair-Vueling merger. I wouldn't expect too much decisions that could make the shareholders angry. Everybody understands that unless there is more reductions (see Spanair), any of the two carriers will be able to survive. So merging is a good idea. And as they overlap, I'd say that a great part of the merged fleet (and slots) will be cancelled. That's why I always say that in my opinion, this merger is just the project of Clickair but with the brand of Vueling: because at the end I see both companies merging but not adding assets but rather adding clients and then cutting capacity down to the level of Clickair and a bit more. When 1+1 = 1,2 or 1,3, I don't really see two much competition problems, even more considering that neither Vueling nor Clickair have a true dominant market share. They are still quite small compared to Spanair, for instance.
What plan does Iberia have for the new Vueling-Clickair ?
Nice question: I wonder the same. Right now, the new (merged) business plan is being prepared and soon announced (this fall), so we (even they?) still don't have a clear idea of their plans. Three magic questions come to my mind:
- Will Iberia keep supplying maintenance and handling to the new company? I assume that the answer will be positive because the new group could earn money by contracting it to Iberia, and also Iberia contracted with Clickair under a "pay less than average today and more than average once you have gains", and if they resigned themselves to loose the contract with the new Vueling, they would have lost money, and this is a no-no.
- Will the new company be authorised to enter MAD? And if yes, will they keep their current status (operating only some few dense routes) or will they speed up there now that Iberia agrees? Stop! This is fundamental. I don't think it's too probable (maybe 3-5%), but I wouldn't discard the scenario in which Vueling could pull out of MAD. (Of course, the company will never accept it, but they could invent some excuses like "we need to focus on BCN after the reduction of Spananair", bla, bla...) A second scenario could be a coexistance of Vueling and Iberia, keeping Vueling a relatively small operator in MAD without too much growth plans. In this case, nice for Iberia. Third situation: I can see Vueling becoming aggressive out of MAD (I mean not very friendly both with EasyJet/Ryanair/Spanair, but with SEPLA too, using Vueling as a tool to "eliminate" Iberia short-haul --100% or less than 100%--).
- And finally, will Alex Cruz be free to decide everything concerning MAD (nor or in the future), or could Iberia stop his intentions if the shareholder considers that Vueling could put Iberia in danger? I sincerely don't know. Maybe if Iberia promoted the coexistance of Vueling and Iberia out of MAD, even letting them compete, the outcome for them would be good. Maybe Vueling could catch a passenger that Iberia is unable to gather without decreasing (too much) the traffic of Iberia. Maybe even if Iberia lost passenger, the overall effect would be positive because Iberia would get dividends from the new Vueling a higher margins because of the lower costs. I really don't know. As a passenger, I'd like to see Vueling out of MAD, but as an investor I don't know how good each of these scenarios could be for Iberia.