IAG will be broken up. Not sure that it'll have anything to do with Brexit but each country will want to save their national carrier. I imagine that the British government will foresee a need to have a national carrier post "transition ".
I mean, how can they plan on trade with the far reaches of the commonwealth and the world without a practical Airline.

I think that we are rapidly going beyond the point of believing that IAG can survive in it's own right. Maybe some are still clinging to hope.

The danger is any assumption (if there is one ) that that carrier would have to be "rump" BA.

Given BA's popularity with the general public one vote winner might be Virgin for long Haul, some iteration of Easyjet to pick up Short Haul?

I get very uneasy with the rhetoric I'm hearing from some of my cabin crew friends that the government won't let BA go/BA fail. I hasten to add I don't think we are anywhere near that ATM but there's some dangerous talk doing the rounds.

I read a lot of fanciful guesswork but you have written nothing based on hard facts,

Hard fact: Company losing £31m per day
Hard Fact: Summer passenger numbers/Recovery less than hoped
Hard Fact: Distribution of a Vaccine will not be before the end of Q1 2021
Hard Fact: BA has 5 months worth of Cash
Hard Fact: If successful a rights issue will raise £2.8B giving an additional 3 months cash

What do you mean, there are insufficient hard facts? Guesswork? The writing is on the wall, the same as it was with Norwegian.

These aren’t hard facts.
BA have stated a cash-burn of £20m per day.
The rest is speculation.

Every time I see the daily loss figures they appear to go up by another million or so?

kungfu panda

Who knows?
How did British Leyland work out?

Jaguar Land Rover is a British company, wholly owned by an Indian company, Tata, since 2008 I think.
Looks like the 49% rule is being abused?

777JRM

No, within reason, what I said were clear facts. I understand the need to stick your head in the sand. We did at Norwegian. We could see what was going on from 2015. There was time to digest reality. With BA the situation has happened so fast, there's not been time to overcome the shock and become pragmatic.

Norwegian had an unsustainable growth model, low profit margins and extreme bad luck with airframes/engines. Hardly comparable.

Here’s a clear fact:

https://simpleflying.com/british-airways-newquay-pso/

Contradiction?

They were losing money at a mathematically unsustainable rate with a certain outcome. Totally comparable.

BA will undoubtedly require a bailout. The only question is will it be public, private or both. Personally my money is on the latter, followed by the former.

The politics are interesting. As others have said, does the government really want Brexit Britain to suffer the embarrassment of its national airline going bust within a couple of months of striking out on its own? Not to mention the practicalities of being an island trading nation with no connections to the outside world. Personally I don’t think the conservatives have the stomach to watch Lufthansa, Air France and others move in and take over at Heathrow, it’s just too much of an embarrassment too early in the project. The politics of providing a bailout are easier in some ways and harder in others. We’re a national disgrace on the one hand but we are (were) highly profitable unlike virgin and while we are owned by a Spanish company, we’re not owned by a billionaire tax exile. Fairly good odds that the taxpayers get their money back eventually too.

Personally I think IAG makes for a fairly enticing medium to long term investment opportunity. Profitability was high before Covid, anyone sensible knows that the demand will return and resume its previous expansion over coming years but we will have slashed the cost base in the meantime. Some fairly chunky returns to be had somewhere down the line potentially. The only question I have as a private investor in the meantime is, how much am I going to be diluted?

The current drastic restructuring of the business has all been done with one eye on these realities. Who do you think the shiny brochures about a different future are designed for? It’s not us! When they eventually go cap in hand to shareholders / HMG they will be able to say, “look, we sacked as many as we reasonably could, we retired the old planes, we gave everyone pay cuts, rewrote contracts, we even closed the headquarters down and sold the artwork for gods sake!”

You forgot shipping.
Maritime presence helped create the world’s largest empire.

And it still goes on: have you seen the size of some of these ports, especially in China?!

But I agree: maybe a rights issue, Qatar join in to lower their average price (they say they are in for the long-term), maybe the UK govt too if they spy a profit for the taxpayer.

IAG Cargo appears to be doing well, increasing their prices during Covid, and their LHR facility is as big as T5!
With a monopoly of slots at LHR, I wouldn’t write them off just yet.

An example of IAG benefitting from the demise of another carrier:

https://simpleflying.com/aer-lingus-...-city/?redir=1


Regarding Brexit fears and shares in different trading regimes, UK companies like Astrazeneca are listed on both the London and New York stock exchanges, so it can be done.

Yes it is common for companies to trade on different exchanges, but IAG will be a company with two different trading cultures after Brexit. Please explain how revenues could be pooled. I believe the EU and the U.K. will be at loggerheads over this. Which legal jurisdiction will decide, this goes to the heart of the current talks

I would expect that if IAG pays tax to both the UK and the EU27, then they will work it out.

IAG lost 4bn EUR in the first half of 2020. It was obvious there are clear financial problems, but still you look at that and have you jaw on the floor. Still close to 1m EUR per HOUR.

https://www.ft.com/content/55a792e3-...b-c22bebd9e1df

As a result, they are seeking to recover a lot of this in a rights issue.

• Passenger capacity operated in Q2 down 95.3% on 2019 and for the six months down 56.2% on 2019
• Second quarter operating loss €1,365 million before exceptional items (2019 operating profit: €960 million)
• Operating loss before exceptional items for the half year €1,900 million (2019 operating profit: €1,095 million)
• Exceptional charge in the half year of €2,137million on derecognition of fuel and foreign exchange hedges for 2020 and impairment of fleet
• Loss after tax before exceptional items for the half year €1,965million, and 2020 statutory loss after tax and exceptional items: €3,806million (2019 profit: €806 million)
• Cash of €6,016 million at June 30, 2020 down €667 million on December 31, 2019. Committed and undrawn general and aircraft facilities were €2.1 billion, bringing total liquidity to €8.1 billion, meaning at the current burn rate, they have actual cash for another 9 months, with absolute financing available for another year.

https://www.iairgroup.com/~/media/Fi...030%202020.pdf

And it would be nice if the Unions comment on this given that they have been so vocal on BA’s restructuring proposals so far. They are also threatening industrial action to impact the few flights BA are operating.

- Significant losses in revenue and profit
- Restructuring across the entire business with some T&C changes to enable flexibility to get through similar challenges in the future (I.e unpaid leave)
- Mothballing Waterside
- Selling paintwork from lounges for goodness sake

Any other ideas what BA can do to realistically make savings now and importantly sustain those for the next 3 years?