BA wants more deals after Iberia merger
08.07.10
BA is looking to do a deal with another airline within a year completing the its merger with Iberia, the airline's chief executive Willie Walsh said yesterday. BA and the Spanish flag carrier are to merge under the control of an umbrella company called International Airlines (IACG) later this year. The holding company has been structured to allow for further acquisitions, and Mr Walsh said that these deals could happen quickly, with TAP, of Portugal, LOT, of Poland, Finnair and TAM, the Brazilian carrier, all suggested as potential targets.
Mr Walsh told the Aviation Club in London: ‘We have created an entity capable of being scaled up. Our ambition is to be truly global. We will work on synergies with Iberia, but our aims go much further beyond that and we want to be in a position to avail ourselves of opportunities if they present themselves in the first year. IACG is not about putting BA and Iberia together, it is about creating a platform to create a carrier of global scale.’
Mr Walsh said that BA had to expand beyond Britain to survive. He said: ‘We can compete effectively for the next ten years. But in twenty years the UK is going to be in a difficult position because we do not have the necessary infrastructure to compete. We are not going to stand still, so we will look to participate at other hubs.’
One of the motivations for the deal with Iberia is that it will give BA greater growth opportunities out of Madrid. Barajas airport has four runways and significant unused capacity, unlike BA's base at Heathrow. Mr Walsh said: ‘There are many routings from Southern Europe and Africa to North America that are shorter via Madrid than via Heathrow, and we will seek to exploit them.'
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