BA eyes a dozen airlines as its takeover targets
Published 06/09/2010 | 05:00
BRITISH Airways said yesterday it has identified about 12 airlines it would like to buy after it merges with Spanish airline Iberia.
International Airlines Group (IAG), the company being formed by BA and Iberia, has narrowed the list of potential targets from an initial pool of about 40. However, a spokeswoman for BA declined to identify the companies on the list when contacted by phone.
British Airways is led by former Aer Lingus chief executive Willie Walsh, who said last year that the Irish airline's future was not secure and that it should consider merging with one or more other airlines.
Mr Walsh was in India over the weekend to announce a code-share agreement with Kingfisher Airlines, India's second-biggest carrier, which the Irishman said was "clearly the best partner" in India for BA.
"With Iberia, we have had a number of meetings where we have looked at airlines around the world and identified those that would be attractive to us in joining IAG," Mr Walsh told Bloomberg News.
"We want to create a platform for like-minded airlines, those who believe that consolidation is part of the answer for the industry, to be able to join us. We have not had any discussions with any airlines."
Mr Walsh said in a speech in Limerick last October that Aer Lingus should seek a merger.
"I think things have changed since then and given what's happened to the economy here and given the way Aer Lingus has struggled in recent times I think you could now make an argument that its future as an independent carrier is not that secure and maybe Aer Lingus does need to look at a relationship with some other carrier or a number of other carriers," he said.
He added that consolidation among the world's 500 major airlines would help solve the aviation industry's problems.
"I don't think you need 500 competitors in order to have a competitive environment for consumers.
"I think the industry is overly fragmented and would benefit from some consolidation. There are some restrictions in place still around ownership and control and there's political influence that makes it difficult, but I think ultimately we will see a reshaping of the industry."
Mr Walsh said then that the current ownership of Aer Lingus would make it difficult to attract investors.
"You have got to look at the shareholding in the airline. With Ryanair a significant shareholder at 30pc, the Government with 25pc and the Employee Share Ownership Trust with 15pc, I struggle to see how anyone would invest or would want to invest with that sort of structure," he said.