World Economy

Jul 30, 2008

The marriage between British Airways and Iberia will create the No. 3 in Europe

The marriage between British Airways and Iberia will create the No. 3 in Europe

Already partners in the OneWorld alliance, the British airline British Airways and Iberia of Spain announced Tuesday, July 29, have begun negotiations in order to achieve a merger by exchange of shares. These negotiations, "supported unanimously by the boards of directors" of the two companies should result in a few months.
Find the full "World" in HTML.
Subscribe to Monde.fr: € 6 per month + 30 days available
ON THE SAME TOPIC
British Airways and Iberia have already started their rapprochement.
The facts British Airways and Iberia, the future No. 3 in Europe?
Edition subscribers Archive: The global air transport through a major crisis
ON THE SAME TOPIC
Four of the principal negotiators at the WTO: EU Commissioner Peter Mandelson, the American Susan Schwab, Indian Minister Kamal Nath and the head of the Brazilian diplomacy Celso Amorim.
The facts breakthrough in WTO negotiations
Bands of the CGT.
The balance social model s'assouplit but does not break
Reactions Case UIMM: CGT and Medef react
Chronicle breakingviews We must not underestimate the strengths of Vietnam
Chronicle breakingviews Germany must change its legislation on takeover bids

The new entity would become the third European company, with 59.9 million passengers boarded behind Lufthansa-Swiss (66.2 million passengers) and far behind the tandem formed by Air France and KLM (73.7 million passengers).

The news was greeted with no real surprise in air transport. Not only because there are approximately fifteen months, British Airways, coupled with funds, had already assembled a dossier of takeover of Iberia, but mainly because, in a context of economic slowdown and oil prices, consolidations and consolidations are generally a response to constraints of increasingly severe.

A search of a simple equation: air transport is an activity where margins are low and it is magnifying that companies can finally achieve real economies of scale.

THE TWO MARKS SUBSISTERAIENT

This new phase of consolidation and is consistent with the scenario, long anticipated by scholars of air transport, that it would remain, ultimately, that three very large traditional operators and two low-cost airlines in Europe.

On the mode of structure chosen, it seems that there are similarities with the type of governance adopted by Air France after his marriage with KLM. The two groups plan to gather under a single holding company with a unified management structure following the directions today. The two brands, British Airways and Iberia, would continue to exist in parallel.

British Airways already owns 13.15% of Iberia, which has, for its part, directly and through options, 10% of British Airways.

by erectusplus at 8:48 AM |