US offers UK inferior open skies deal - FT

[SWBKCB]

There's no rush, though - we've got over a year...

[ATNotts]

Unless someone can come up with a way of an airline being 102% owned by both UK and EU entities (I've tried several times, even my terrible maths can't make it work), I'm guessing the simplest solution is to split BA (or IAG?) into two airlines: British Airways (UK) and British Airways (EU).

I don't see how splitting BA and Iberia into two separate companies achieves anything, as IAG (a company with less than 51% UK shareholding) would still own BA.

It's a bit like BT and Open Reach, they are now ostensibly two companies, but with the same ownership. It's nothing but a paper exercise, really an "independence brought about through expediency". Such an arrangement would be laughed out by the USA.

To truly sort out the ownership issues, and satisfy what will surely be one of the USA's primary "red lines" a UK government may have to spend a deal of UK taxpayers cash and buy back BA for the nation - nationalisation heaven forbid. And even then, the USA would probably cry foul at the idea of the state controlling BA, screaming "unfair competition".

Virgin will have the same problem I'm guessing, since I believe Branson's group holds less than 50% of the equity in the airline now. Am I wrong?

It would have been so much easier had the UK been negotiating with a US regime under Obama or Mrs. Clinton, than the protectionist Donald Trump. If the latter doesn't like a proposed agreement out will come the pad of "executive order forms" and it would be brushed aside.

[PDXCWL45]

If the UK government is forced to buy BA then surely they'd also have ti buy Thomas Cook and TUI UK and Virgin as well so they all qualify.
And I'm not so sure having Clinton or Obama in charge would've helped as there would've been no guarantee they'd be UK friendly and i doubt they'd change anything for the UK.

[Dannyboy39]

As I said in the other thread, why not open up a new LH airline and call it IAG Americas?

[ATNotts]

Originally Posted by Dannyboy39

As I said in the other thread, why not open up a new LH airline and call it IAG Americas?

If it were under the same ownership, and just another "group company" that wouldn't help one iota. The company isn't the issue, as I understand it, it's who owns it, and presently they are majority non UK interests, which as we are in the EU isn't a problem, but will be from 30.3.19 - unless transition kick the can down the road for another 20 - 24 months, which I guess is what carriers are banking on.

Same issues blight TUI, Thomas cook and Virgin, not to mention Norwegian and Primera.

[SWBKCB]

Originally Posted by ATNotts

If it were under the same ownership, and just another "group company" that wouldn't help one iota. The company isn't the issue, as I understand it, it's who owns it, and presently they are majority non UK interests, which as we are in the EU isn't a problem, but will be from 30.3.19 - unless transition kick the can down the road for another 20 - 24 months, which I guess is what carriers are banking on.

Same issues blight TUI, Thomas cook and Virgin, not to mention Norwegian and Primera.

It's control as well as ownership

[ATNotts]

Originally Posted by SWBKCB

It's control as well as ownership

Generally, he who owns, also controls.

Looking closer to home, what is there to say that in the worst case scenario the EU decides that to operate within the EU Open Skies carriers must be owned in the EU / EEA. Where would that leave Easyjet? Up a creak with the proverbial paddle one fears.

I've not heard any suggestion that this might happen, just thinking aloud.

[SWBKCB]

Agreed, but the Americans will want to see control being exercised.

Re EZY, isn't that what the Austrian operation is all about? Unless the UK is given a dispensation, you'll need to be an EU airline (with all that entails) to operate intra-EU27 flights

[GLAEDI]

Originally Posted by ATNotts

Generally, he who owns, also controls.

Looking closer to home, what is there to say that in the worst case scenario the EU decides that to operate within the EU Open Skies carriers must be owned in the EU / EEA. Where would that leave Easyjet? Up a creak with the proverbial paddle one fears.

I've not heard any suggestion that this might happen, just thinking aloud.

Stelios and his family will switch nationalities depending upon circs. They’re actually in a good position with Stelios being both Greek & British. That’s 34.6% of shares that can be managed to give the nationality the company needs. I don’t see them going long haul to the US so whatever EU/UK agree. Given IAG & Norwegian I don’t think the UK is going to stipulate a 51% UK holding.

[SWBKCB]

Given IAG & Norwegian I don’t think the UK is going to stipulate a 51% UK holding.

The UK might not, but the other nations involved in any agreement might - otherwise where would you draw the line? Which takes us back to the Americans position...

[pholling]

Originally Posted by GLAEDI

Stelios and his family will switch nationalities depending upon circs. They’re actually in a good position with Stelios being both Greek & British. That’s 34.6% of shares that can be managed to give the nationality the company needs. I don’t see them going long haul to the US so whatever EU/UK agree. Given IAG & Norwegian I don’t think the UK is going to stipulate a 51% UK holding.

The US and EU won't allow Stelios to pick an choose depending on circumstances. There will be one declaration that will apply to all. Not that it will matter for EZY as they are unlikely to go TA anytime soon. Again the issue isn't ownership, but control. In US speak that is anything ≥25% voting shares owned by a single shareholder that isn't US or UK. If they created a Virgin Atlantic USA Inc, that was 51% owned and voting by Delta then Branson or AF/KL could probably squeeze 25%, because it would be obvious DL had control, but without that bulk of a shareholding it would be hard to do. Remember the Virgin America issues around Branson's <50% proposed shareholding. In the end he could only have 24% of the voting shares, and ultimately had no control over the sale to Alaska.