Ba Iberia Merger

[Fly380]

It has just been announced on BBC that BA and IBERIA have signed the merger agreement.:ok:

http://news.sky.com/skynews/Home/Business/British-Airways-And-Iberia-Sign-Merger-Deal-To-Create-Europes-Second-Largest-Airline-Group/Article/201004215597110?lpos=Business_Carousel_Region_0&lid=ARTICLE_15597110_British_Airways_And_Iberia_Sign_Merger_ Deal_To_Create_Europes_Second_Largest_Airline_Group

[Capetonian]

I have yet to decide to which of these two airlines this agreement will be more detrimental. Opinion around the breakfast table was that whereas Iberia can't get much worse, BA has still not hit rock bottom but may be about to do so.

[DarkStar]

A chance for BA to highlight their Spanish practices to those who know best. Manana. :ugh: Personally, I cannot see any benefits for the staff, it'll be another round of 'synergies' and 'streamlining' leading to job cuts. Pretty grim in my view :(

[HZ123]

Here at BA headquaters we do not have time to sit around the breakfast table. It is most exciting and watch out some of the competition when we get into full swing a few years from now?

BA will benefit very well from this as the finances will be based in Spain as Ecu's, where corporate taxation is weighted toward company profits and the taxation is about 8% less than the UK.

Granted there are a few minor issues to reolve but you must agree that a move to Spain can only be better, as the UK is up the creek without paddle or a canoe

[Microburst2002]

I know little about this kind of operations. Or nothing.
Only that sinergies are never good for employees.

What is the point of view of Air France and KLM people?
How was their experience?

Although totally different airlines, I think there are many things to learn from that fusion.

[LeadSled]

Folks,
Off hand, I can't think of two more culturally incompatible organizations in the airline world.
May we live in interesting times.
Tootle pip!!

[Freddie-M]

Renaming as "International Airways" (although BA and Iberia will stay on the side of the aircraft).
From HZ123 - "BA will benefit very well from this as the finances will be based in Spain...where corporate taxation is weighted toward company profits and the taxation is about 8% less than the UK."
Still Britain's flag carrier?

[maxred]

"BA will benefit very well from this as the finances will be based in Spain...where corporate taxation is weighted toward company profits and the taxation is about 8% less than the UK."
Sorry, but utterly delusional and the UK, in conjunction with BA, further up **** creek.
I suggest 'here at BA HQ' you take a quick trip to Spains largest financial institution, and view its managerial and corporate practices.
Let us know how you get on:eek::eek:

[HZ123]

I guess that is Ferrovial valued @ 10.55 ecu billions or Bank Santander with 170,000 employees and a book value of $1.5 billion? Can not see much wrong with their commercial operation? Some of you need to be a little less parochial and join the rest of us in the EU? N'est par?

[WHBM]

You can have an economy where the emphasis is on supporting national interests and organisations ("what's in it for our national interest"). You can also have an economy based on fully-free trading and short-term gains ("what's in it for our next quarterly statement"). Both these approaches have their own upsides and downsides.

The problem comes when two large organisations merge, one from the first cultural style of economy and the other from the second. because in the medium term the one from the free-market world will be steadily walked over by the one from the national interest background. There are sufficient examples from around the world to demonstrate this. Any established Anglo-French organisation (Alstom, Airbus, Peugeot in Coventry, etc, etc) will show this only too well.

[Stop Stop Stop]

What is the point of view of Air France and KLM people?
How was their experience?


As a KLM pilot I can only speak from experience of the operational side, but as far as we are concerned, very little has changed. We now use joint KLM/Air France Approach booklets instead of KLM designed ones- these are now used exclusively through the group. Purchasing of aircraft is easier due to the group purchasing power and discounts and benefits of being one of the largest airlines in the world. For example, recently, KLM have purchased 17 Embraer 190's for KLM Cityhopper and Air France have purchased a substantial amount of E170/190's for Regional, their shorthaul carrier. Obviously good discounts were had and the potential order is up to 80 aircraft.

Synergies have been made in the support side of things- catering is one area that has been significantly rationalised with joint purchasing of glasses, wines and condiments etc, marketing is another large joint area.

In all, for the day to day operational staff, I suspect there will be little change. Office based staff in purchasing or marketing might want to consider their positions as I am sure there will be some cuts as synergies are made between Madrid and London. Obviously at the management level there will be much change. Maybe it will be for the better if BA is to survive the current strikes forced by a union that seems determined to bring BA down at a time when the company is fighting for its survival.

[Chris Scott]

Quote from HZ123:
BA will benefit very well from this as the finances will be based in Spain as Ecu's, where corporate taxation is weighted toward company profits and the taxation is about 8% less than the UK.

Does that suggest that BA has become effectively "non-dom"?

Don't know what part of Waterside you occupy (if any), but would be astonished your view that "the UK is up the creek without paddle or a canoe", is any where near that of the BA board.

And if you claim to be a Europhile, rather than merely pro-Spanish, I suggest your spelling of common phrases (not to mention syntax) could be due for some improvement, n'est-ce pas ?

[Groundloop]

Still Britain's flag carrier?

BA hasn't been a "flag carrier" since it was privatised in 1987.

[Economics101]

HZ123: In two messages you refer to "Ecu's" (sic). Do you mean Euros (or even €)? There once was an ECU, but it has long been consigned to the history books.

[Capetonian]

I wondered about that, but I believe the ECU still exists purely for accounting purposes, it is of course equal to one Euro.

[compton3bravo]

I notice HZ123 that you have not mentioned the BA Pension deficit which is still your achilles heel and still has not been completely sorted out and probably never will be. Living here in Spain, where incidentally a lot of retired BA people reside and ´visiting´ a number of airports around the country I still think you will have many problems with so-called Spanish practices to sort out. The Spanish are a very proud and lovely people and in my opinion they will not take too kindly to a ´Willie Walsh´ type trying to throw there weight around. Good luck with the so-called merger because I think you will need it!

[tornadoken]

LS #6: I can't think of two more culturally incompatible organizations in the airline world. NWA and anybody? AF and anybody? When, soon, SkyTeam set about closer relations between DL/NW and AF/KL, that's when "incompatible" will be the word. 13 years to consummate IB+BA will seem to have been quick, painless.

Mergers, like any other marriage, can work if parties' objectives are compatible: ME must be suppressed, WE enhanced, if THEY are to be defeated. IB's strength was dominance of S.America: now local carriers, like TAM, are fit, and daily more so; BA's strength was schedule reliability: others now match them. Freight and pax now buy price, not some vague mystique. So: solve issues like seniority and pensions: change or die. This is a long-overdue step to turning marketing alliances into conglomerate Service Providers. IB/BA job losses will be in overlapping back-office functions: front-line jobs will match the global expansion of air transport, but Final Base may not be First Base. Progression and relocation may interlink, like with such as Shell, which is now neither Dutch nor British, but is a discrete identity...like a good marriage.

Patrimony: soon after 1985/87 flotations of BAe., RR and BA, it was reported that a minority of shareholdings was registered to UK addresses. That works both ways.

[jdcg]

"as the UK is up the creek without paddle or a canoe"

What - and Spain isn't???

[FlyingTinCans]

Took the words right out my mouth jdcg

If HZ123 thinks the UK is worse effected by the recession than Spain you clearly havnt done your homework!

And a loss of a load of corporation tax for UK plc is exactly what we all need right now :ugh: