Where/how these two organisations save cash?
Staffing - Airlines are not banks/retailers/manufacturers who all have successful track records in consolidating. You still need X people physically on-site to provide service. Out stations maybe consolidated but the %age saving isn't going to be radical. So not alot of scope to consolidate there then.
Procurement - Aeroplanes. BA is a hybrid of Airbus/Boeing. Iberia are Airbus customers. Neither company has a standard equipment fit. BA has recently placed orders that will more than meet its needs for the next 10 years. So not alot of scope to consolidate there then either.
Back Office - Operations, Pay-roll, HR etc. EU law applies across both legal entities albeit with sufficient subtle differences to mean that local presence of some sort will still be required. So not alot of scope to consolidate there then either.
Route Network - For UK-Spanish flights BA and Iberia have been working in partnership with revenue sharing agreements for years. However growth on this route has come from LoCos operating seasonal and leisure flights from regional airports, not BAIb hubs. Expansion at MAD, you don't need to merge to do this. If there was a market for it, why hadn't it happened already? Expansion at MAD and BCN is again largely from LoCos in shorthaul not longhaul.
Management - There will still be two brands operating in essentially the same way. Each brand will have its own standards and still require a senior management team of a somewhat emasculated CEO et al. Plus 'TopCo' will require a management team, board, shareholder management apparatus etc. So, there will be one new management team and two mini management teams, none of which will be exactly 'carbon neutral' in the modern parlance. So not alot of scope to consolidate there then either.
Customer Choice - As a silver card holder. If I wanted to fly to Caracus, I could have already done a OneWorld LHR-MAD-CCS trip already. So not alot of opportunity for me to get a benefit there?
Summary: Not alot of scope to consolidate and save cash.
Am I missing something? Is the Emporer wearing any clothes?
Last edited by demomonkey; 13th Nov 2009 at 09:11.