BA/AA/CO/IB Merger/cooperation (Merged)
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BA/AA/CO/IB Merger/cooperation (Merged)
from BA press website today
British Airways is exploring opportunities for co-operation with American Airlines and Continental Airlines.
Further details will be announced when appropriate.
ends
British Airways is exploring opportunities for co-operation with American Airlines and Continental Airlines.
Further details will be announced when appropriate.
ends
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http://www.reuters.com/article/busin...rpc=23&sp=true
With open skies taking affect worldwide, is this the possible future of "global mergers"?
With open skies taking affect worldwide, is this the possible future of "global mergers"?
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"British Airways is exploring opportunities for co-operation with American Airlines and Continental Airlines. Further details will be announced when appropriate"
I suppose the translation for this is that failing British Airways PLC is now being stalked by two of its larger foreign competitors who are waiting for the opportunity to launch hostile takeover bids now that the share price has crashed following the total shambles of the Terminal 5 launch and other regretable mishaps. BA CEO Willie Walsh will be asked to stay on following the acquisition to assist with disposal of the remaining assets, handle the negative PR following the anticipated large scale redundancies and assist with the orderly transfer of the former airlines routes to American ownership. Regretfully it is not anticipated that the new owners would wish to continue with the British Airways brand which will pass into history along with the similarly branded British Leyland, British Steel Corporation, British Shipbuilders, British Railways and of course British Caledonian. Open Skies will be offered to Michael O' Leary for a nominal fee of £1.
We look forward to your future custom on American Airways Europe
I suppose the translation for this is that failing British Airways PLC is now being stalked by two of its larger foreign competitors who are waiting for the opportunity to launch hostile takeover bids now that the share price has crashed following the total shambles of the Terminal 5 launch and other regretable mishaps. BA CEO Willie Walsh will be asked to stay on following the acquisition to assist with disposal of the remaining assets, handle the negative PR following the anticipated large scale redundancies and assist with the orderly transfer of the former airlines routes to American ownership. Regretfully it is not anticipated that the new owners would wish to continue with the British Airways brand which will pass into history along with the similarly branded British Leyland, British Steel Corporation, British Shipbuilders, British Railways and of course British Caledonian. Open Skies will be offered to Michael O' Leary for a nominal fee of £1.
We look forward to your future custom on American Airways Europe
Last edited by markrl; 30th Apr 2008 at 21:27.
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http://www.guardian.co.uk/business/2...irlineindustry
It would appear that this can only be about co-operation, as a takeover would require some major policy changes by governments on both sides of the Atlantic.
The line in the Guardian's report is, I think, the most prescient:
Spacey
It would appear that this can only be about co-operation, as a takeover would require some major policy changes by governments on both sides of the Atlantic.
The line in the Guardian's report is, I think, the most prescient:
The deal is unlikely to involve a full merger with either carrier, which would be blocked by US and EU foreign-ownership laws. But if the three carriers can secure limited immunity from US competition laws, they will be able to offer smoother connections by coordinating schedules and route planning.
Paxing All Over The World
The interesting part of this announcement is the word 'Continental'. For BA to be talking (again) with AA, it's long term partner and One World partner, is no surprise but CO???
One long held view is that the names of the major carriers that will be seen around the globe in the next decade are already known. They are:
One World
Star Alliance
Sky Team
etc.
The recession in the USA is already pushing people together (Delta + NorthWest) and so on. Anti-trust immunity follows in order to retain some kind of airline biz, even though they be international alliances. So, for CO (SkyTeam) to be talking to BA/AA (One World) is most interesting.,
One long held view is that the names of the major carriers that will be seen around the globe in the next decade are already known. They are:
One World
Star Alliance
Sky Team
etc.
The recession in the USA is already pushing people together (Delta + NorthWest) and so on. Anti-trust immunity follows in order to retain some kind of airline biz, even though they be international alliances. So, for CO (SkyTeam) to be talking to BA/AA (One World) is most interesting.,
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CO merging with AA ?
Heard a whisper yesterday from an LHR based captain that CO and AA were in preliminary / fact-finding talks about a possible merger... Anyone have anything further on this?
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http://startelegram.typepad.com/sky_...ental-exe.html
MAY 09, 2008
Continental execs spotted at AA HQ
We got a tip from some of our sources that top Continental Airlines executives were at American Airlines headquarters in Fort Worth today. It's definitely been an interesting couple of weeks over at Amon Carter Boulevard ... and should get even more interesting in the near future.
- Trebor Banstetter
Posted at 09:55 PM in American Airlines
MAY 09, 2008
Continental execs spotted at AA HQ
We got a tip from some of our sources that top Continental Airlines executives were at American Airlines headquarters in Fort Worth today. It's definitely been an interesting couple of weeks over at Amon Carter Boulevard ... and should get even more interesting in the near future.
- Trebor Banstetter
Posted at 09:55 PM in American Airlines
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BA has said that it is in discussions with AA and CO, that's all. The media and the stock market have got very excited about this - in my view, unnecessarily. CO is the junior partner in Skyteam (AF/KL/DL/NW have provisional antitrust immunity from the US DoJ to collaborate on fares, etc), so is looking at alternatives. It tried merger discussions with UA, but walked away when it got a better look at UA's finances (it lost over $0.5bn in the March quarter alone). It is entirely logical therefore that it looks at oneworld for a future. That is what these talks are about, in my view. Remember that transatlantic mergers are still completely impossible under the current bilateral system (Chicago Convention, 1944), so BA is not merging with either AA or CO. The Open Skies deal does not (and will not in future) permit transatlantic mergers. This is about CO potentially joining oneworld - no more.
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BA to seek clearance for AA and Iberia merger
British Airways is said to be close to seeking clearance from competition authorities for a three-way operational merger with American Airlines (AA) and Iberia.
The deal would allow the companies to combine nearly all aspects of their operations, including sales, purchasing and marketing, leading to lower costs and greater economies of scale. Legal sources in the United States said that a submission to the US Department of Transport was expected as soon as next week.
The operational partnership may also provide a foundation for a full merger of the carriers should foreign ownership rules in the United States and Spain change. BA said two months ago that it was in talks with AA and Continental, another American carrier, about creating an alliance, but Continental has since walked away.
BA and AA have continued their discussions and are believed to have invited Iberia - in which BA has a 13 per cent stake - to be the third member. BA said last night that its talks with AA were continuing but a decision had yet to be made.
If BA and AA do seek regulatory approval to merge their operations, it would be their third attempt, having been blocked by regulators in 1998 and 2001. The authorities in Britain and America were concerned that the
two carriers would have a dominant position on many North Atlantic routes and demanded that the airlines sell Heathrow slots to reduce their traffic.
However, sources familiar with BA's discussions said that the airline was more optimistic of gaining approval this time because of the liberalisation of air travel rules between Europe and the US. In addition, the dire state of the airline sector, which is striving to cope with high fuel prices, may force regulators to accept the deal.
AA lost $328 million (£164.7 million)and Iberia €28.3 million (£22.5 million) in the first quarter of this year. BA has given warning that it may struggle to stay profitable this year.
An analyst said: “There is a lot of pressure on BA and AA to do this deal and cut costs. It's inevitable.” Another added: “Including Iberia makes sense, as it would give the alliance a strong position across both the North and South Atlantic.”
Meanwhile, BA said yesterday that it had bought L'Avion, a French business-class only airline, for £54 million. L'Avion is the last of the survivors of the rush two years ago to launch all-business-class transatlantic services. Silverjet, MaxJet and Eos have all gone out of business.
L'Avion will be merged with BA's new OpenSkies service, which flies from Paris to New York. The purchase price includes L'Avion's £26million in cash and two Boeing 757 aircraft.
The deal would allow the companies to combine nearly all aspects of their operations, including sales, purchasing and marketing, leading to lower costs and greater economies of scale. Legal sources in the United States said that a submission to the US Department of Transport was expected as soon as next week.
The operational partnership may also provide a foundation for a full merger of the carriers should foreign ownership rules in the United States and Spain change. BA said two months ago that it was in talks with AA and Continental, another American carrier, about creating an alliance, but Continental has since walked away.
BA and AA have continued their discussions and are believed to have invited Iberia - in which BA has a 13 per cent stake - to be the third member. BA said last night that its talks with AA were continuing but a decision had yet to be made.
If BA and AA do seek regulatory approval to merge their operations, it would be their third attempt, having been blocked by regulators in 1998 and 2001. The authorities in Britain and America were concerned that the
two carriers would have a dominant position on many North Atlantic routes and demanded that the airlines sell Heathrow slots to reduce their traffic.
However, sources familiar with BA's discussions said that the airline was more optimistic of gaining approval this time because of the liberalisation of air travel rules between Europe and the US. In addition, the dire state of the airline sector, which is striving to cope with high fuel prices, may force regulators to accept the deal.
AA lost $328 million (£164.7 million)and Iberia €28.3 million (£22.5 million) in the first quarter of this year. BA has given warning that it may struggle to stay profitable this year.
An analyst said: “There is a lot of pressure on BA and AA to do this deal and cut costs. It's inevitable.” Another added: “Including Iberia makes sense, as it would give the alliance a strong position across both the North and South Atlantic.”
Meanwhile, BA said yesterday that it had bought L'Avion, a French business-class only airline, for £54 million. L'Avion is the last of the survivors of the rush two years ago to launch all-business-class transatlantic services. Silverjet, MaxJet and Eos have all gone out of business.
L'Avion will be merged with BA's new OpenSkies service, which flies from Paris to New York. The purchase price includes L'Avion's £26million in cash and two Boeing 757 aircraft.
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so long as 51% of the ownership of IB and BA remained in the EU there's no other ownership issue only the competition issue.....obviously the other side of the pond ownership is more restrictive than that, but BA could legally merge with IB anyway so long as the competition boys and girls and share holders approved it
so what you think, American would do all transatlantic with BA/IB not flying that way any more?
so what you think, American would do all transatlantic with BA/IB not flying that way any more?
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British Airways, Iberia in merger talks
RNS Number : 1030A
British Airways PLC
29 July 2008
IBERIA MERGER TALKS
British Airways and Iberia are holding talks with a view to an all-share merger
between the two companies. The negotiations are supported unanimously by the
boards of both companies.
The British Airways and Iberia brands would be retained as part of a combined
group.
Iberia's chairman and chief executive, Fernando Conte, said: "A merger would be
good news for our customers and enhance our existing relationship. We've worked
together for nearly 10 years and a tie-up would build on that success. It would
also strengthen the oneworld alliance and further develop Madrid's position as
the European gateway to Latin America".
British Airways' chief executive, Willie Walsh, said: "The aviation landscape is
changing and airline consolidation is long overdue. The combined balance sheet,
anticipated synergies and network fit between the airlines make a merger an
attractive proposition, particularly in the current economic environment. We've
had a successful relationship with Iberia for a decade and are confident that
both companies' shareholders would benefit from the proposed tie-up".
British Airways acquired a nine per cent shareholding in Iberia in 1999 and has
recently increased its shareholding to 13.15 per cent. Iberia has announced
today that it has recently acquired a 2.99 per cent direct shareholding in
British Airways and financial exposure to a further 6.99 per cent through
contracts for difference linked to British Airways' share price. The airlines'
shareholdings reinforce the mutual interest of both companies in each other.
It is expected that it will take several months to reach agreement on the terms
of the merger and to finalise a joint business and integration plan for the
combined group.
Both parties are confident of securing regulatory approval. The European Union
has already granted British Airways and Iberia approval to co-operate widely.
ends
July 29, 2008 094/LG/08
Notes to Editors
1. The principal shareholders in Iberia (other than British Airways)
include Caja Madrid at 22.99 per cent of Iberia shares and El Corte Ingles at
3.37 per cent.
2. It is expected that there will be a single holding company with a
unified management structure built upon representation from both companies.
3. The existing two companies would be responsible for the day to day
running of their operations.
4. The new holding company is expected to be a member of the FTSE100
and quoted on the Madrid stock exchange.
5. A contract for difference (CFD) is an agreement to exchange the difference in
a share's value between the time a contract is opened and the time it is closed.
Holders of CFDs are financially exposed to the share price but do not own the
shares and therefore have no voting rights. The contract has no fixed expiry
date.
6 It is envisaged that a new company would acquire both British Airways
and Iberia at the same time. Based on the current market capitalisations of
British Airways and Iberia, the UK Panel on Takeovers and Mergers has agreed
that the current intended transaction is not subject to the UK Takeover Code.
This information is provided by RNS
British Airways PLC
29 July 2008
IBERIA MERGER TALKS
British Airways and Iberia are holding talks with a view to an all-share merger
between the two companies. The negotiations are supported unanimously by the
boards of both companies.
The British Airways and Iberia brands would be retained as part of a combined
group.
Iberia's chairman and chief executive, Fernando Conte, said: "A merger would be
good news for our customers and enhance our existing relationship. We've worked
together for nearly 10 years and a tie-up would build on that success. It would
also strengthen the oneworld alliance and further develop Madrid's position as
the European gateway to Latin America".
British Airways' chief executive, Willie Walsh, said: "The aviation landscape is
changing and airline consolidation is long overdue. The combined balance sheet,
anticipated synergies and network fit between the airlines make a merger an
attractive proposition, particularly in the current economic environment. We've
had a successful relationship with Iberia for a decade and are confident that
both companies' shareholders would benefit from the proposed tie-up".
British Airways acquired a nine per cent shareholding in Iberia in 1999 and has
recently increased its shareholding to 13.15 per cent. Iberia has announced
today that it has recently acquired a 2.99 per cent direct shareholding in
British Airways and financial exposure to a further 6.99 per cent through
contracts for difference linked to British Airways' share price. The airlines'
shareholdings reinforce the mutual interest of both companies in each other.
It is expected that it will take several months to reach agreement on the terms
of the merger and to finalise a joint business and integration plan for the
combined group.
Both parties are confident of securing regulatory approval. The European Union
has already granted British Airways and Iberia approval to co-operate widely.
ends
July 29, 2008 094/LG/08
Notes to Editors
1. The principal shareholders in Iberia (other than British Airways)
include Caja Madrid at 22.99 per cent of Iberia shares and El Corte Ingles at
3.37 per cent.
2. It is expected that there will be a single holding company with a
unified management structure built upon representation from both companies.
3. The existing two companies would be responsible for the day to day
running of their operations.
4. The new holding company is expected to be a member of the FTSE100
and quoted on the Madrid stock exchange.
5. A contract for difference (CFD) is an agreement to exchange the difference in
a share's value between the time a contract is opened and the time it is closed.
Holders of CFDs are financially exposed to the share price but do not own the
shares and therefore have no voting rights. The contract has no fixed expiry
date.
6 It is envisaged that a new company would acquire both British Airways
and Iberia at the same time. Based on the current market capitalisations of
British Airways and Iberia, the UK Panel on Takeovers and Mergers has agreed
that the current intended transaction is not subject to the UK Takeover Code.
This information is provided by RNS
An intriguing part of the press release is the remark that Iberia has
"financial exposure to a further 6.99 per cent" (of BA)
"through contracts for difference linked to British Airways' share price."
First time I've ever heard of a carrier (especially a cash-strapped one) using shareholders' funds for gambling on another's share price. Given the 8pc jump in BA's share price on this announcement, one assumes the bet was laid before the negotiations began (otherwise the CFD provider might be a little upset!)
Perhaps a financial whizz could explain?
Well, I guess the Spanish already have the BAA and an ever increasing proportion of the UK banking sector, so why not BA too!
"financial exposure to a further 6.99 per cent" (of BA)
"through contracts for difference linked to British Airways' share price."
First time I've ever heard of a carrier (especially a cash-strapped one) using shareholders' funds for gambling on another's share price. Given the 8pc jump in BA's share price on this announcement, one assumes the bet was laid before the negotiations began (otherwise the CFD provider might be a little upset!)
Perhaps a financial whizz could explain?
Well, I guess the Spanish already have the BAA and an ever increasing proportion of the UK banking sector, so why not BA too!
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Don´t see the logic of it unless the forthcoming retirements of 747-400´s from BA go to IB and they maintain a two tier service level... The IB product has been reduced to that of a LO-co due to its present monopoly on many routes...
IB has sold off just about everything in recent years to make it an attractive proposition to capital venture firms. At the same time its put off fleet renewal plans, stripped out any customer service and erroded brand loyalty.
Suprising that IB is of interest to BA considering;
a) long haul and short haul fleet renewal overdue,
b) MAD-BCN under threat from the AVE high speed train (latest figures show 42% of pax now use this),
c) Spanish government plans to put high speed trains to most of the Iberian peninsula by 2015,
d) Highly unionised and militant Spanish pilots,
e) Spain having the 2nd highest number of low cost flights in Europe
f) Spanish eceonomy heading for meltdown
Theres a whole lot more that I can see thats wrong with the situation and lets be honest. Most travellers from South America only choose Iberia as the alternative is horrendous (IB´s most profitable routes behind MAD-BCN). As soon as the ME carriers expand to SA in force people won´t hub through MAD any more....
Not sure how it is with BA at the moment but IB is not an airline to want to merge with unless you´re going low cost.... Air Lingus MK2???
IB has sold off just about everything in recent years to make it an attractive proposition to capital venture firms. At the same time its put off fleet renewal plans, stripped out any customer service and erroded brand loyalty.
Suprising that IB is of interest to BA considering;
a) long haul and short haul fleet renewal overdue,
b) MAD-BCN under threat from the AVE high speed train (latest figures show 42% of pax now use this),
c) Spanish government plans to put high speed trains to most of the Iberian peninsula by 2015,
d) Highly unionised and militant Spanish pilots,
e) Spain having the 2nd highest number of low cost flights in Europe
f) Spanish eceonomy heading for meltdown
Theres a whole lot more that I can see thats wrong with the situation and lets be honest. Most travellers from South America only choose Iberia as the alternative is horrendous (IB´s most profitable routes behind MAD-BCN). As soon as the ME carriers expand to SA in force people won´t hub through MAD any more....
Not sure how it is with BA at the moment but IB is not an airline to want to merge with unless you´re going low cost.... Air Lingus MK2???
Couldonlyaffordafiver
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... or unless you want to strengthen your hold over another continent (South America) whilst at the same time reducing costs with economies of scale. Interesting times.
AA next?
AA next?
