Airline Post » iberia airlines

British Airways and Iberia merge

Abbey — Mon, 16 Nov 2009 08:34:37 +0000

The world’s third largest airline by revenue was created by British Airways and Iberia. The creation of a new airline means the merger of two airline companies. It is expected that the amalgamation will be completed in late 2010. The new airline will have 419 aircrafts together with 205 destinations to fly.

Such merger led to a negative reaction of Virgin Atlantic noting that it would give a possibility for British Airways and Iberia to augment BA’s prevalence at Heathrow with 44% of take-off and landing slots this winter.

Last year British Airways and Iberia transported 62 million passengers, moreover, if combine their revenues then the figure will be about €15 billion.

The airlines consider the joint cooperation will help to get about €400 million that will be beneficial for companies’ shareholders, customers and even employees. Due to such merger a potent European airline will be created that will be able to rival with other airline companies.

According to Willie Walsh, BA chief executive, both airline companies would keep their own brands, nevertheless they will cooperate as a combined force.

It was estimated that about one third of savings will be received from joint selling, network and revenue management benefits. The companies chose the group CEO Walsh and a management team that will control the combined business.

First of all the aim of the group is to unite the two airlines that have the leading position in the UK and Spain and heighten their presence in the international long haul markets and at the same time to keep their own brands and current operations of each airline.

BA will have a possibility to receive up to 59 routes among which 13 will be in Latin America. As for Iberia, it will have up to 98 new destinations across the UK airline’s network

The companies will also provide better scheduling and connections, reasonable prices, more VIP lounges and improve flyer benefits.

New Plan of Iberia to Cut Costs

Abbey — Tue, 27 Oct 2009 07:54:49 +0000

Iberia decided to approve a strategy, called Plan 2012, the aim of the plan is to increase operating profile by €450 million. To fulfill the plan the company decided to cut costs and make efficient improvements. Rafael Sanchez-Lozano said that as the airline industry underwent a dramatic situation, it was decided to modify Iberia into a viable project. In the first half Iberia Group stated a consolidated dead loss of €165.4 million that could lead to a full-year deficit for the first time in 14 years.

It is decided that a new short- and medium-haul airline will operate as an independent network carrier which will have a service like IB has that will be able to feed the profitable long-haul network through its Madrid hub.

According to a spokesperson of ATWOnline, despite the fact that Iberia was considered to be the leader of the Europe-to-Latin America routes, still it had a structural problem in its domestic and European operations. For that reason it was decided to settle a new model that would lower operation costs and there would be no ‘legacy’ work practices due to which it would be possible for Iberia to rival with other carriers.

In spite of the fact that there are opponents of this new model, one should say that it will help to secure jobs. Another thing that happened to Iberia Airline Company was a two day strike that led to the cancellation of 404 flights. The strike was held in order to support salary demands.

Initiators of the strike were 4,300 staff from labor unions that wanted to stop a four-year pay freeze. It is also expected that stoppages will be on November 10 and 11. Such situation can lead to the fact that Iberia will have to compensate losses or buy tickets on other days to its passengers.

EU regulators object to airline tie-up plans

Dave — Sat, 03 Oct 2009 12:11:59 +0000

European Union regulators warned British Airways, American Airlines and Iberia Airlines that their plans to share their lucrative trans-Atlantic rules may break antitrust rules. According to the EU, a formal charge was sent to each of the airlines, saying their cooperation may go against the rule that forbids companies engaging in partnerships that shut out rivals.

The airlines said they are planning to apply for antitrust approval from the United States Department of Transportation and that they would also notify the European Union commission. The first effort toward the tie-up was made 12 years ago, when American and British Airways joined their operations.

BA started negotiations with Iberia Airlines, the Spanish carrier, but nothing has been finalized. AA and BA are also considering including Finnair and Royal Jordanian in this partnership.

If they receive the approval, the alliance would service 443 destinations in 106 countries with around 6,300 daily departures. If the deal will get rejected by the EU, the companies may get fined 10% of global annual turnover for forming an illegal cartel.

The EU is also running parallel investigations on other airlines. The Star Alliance (Lufthansa, Continental, United and Air Canada) and SkyTeam (Air France/KLM and Delta/Northwest) are also under its watchful eye. Only airlines alliances that fly trans-Atlantic are currently analyzed.

Even with the alliance of BA, AA and Iberia, these airlines would still be the second-largest airline with 18% of seats, following Delta-Northwest-Air France that own 25%. On Sunday, Virgin announced a $5.6 million marketing campaign against the alliance, including painting 34 of their aircrafts with the message “No Way, AA/BA.” (via Yahoo)