International Airlines Group (“IAG”), the parent company of British Airways, Aer Lingus, Iberia and Vueling, has announced the names of four tech start-ups that will work with the group to develop new technology solutions for airlines and passengers.
This is all part of IAG’s tech accelerator Hangar 51 which it has developed with L Marks.
International Airlines Group’s takeover of Aer Lingus moved another step closer today, 14 July 2015, after the European Commission gave formal approval of the deal.
It is subject to some conditions, known as “commitments” in order to assuage competition concerns of the European Commission.
1. IAG must forfeit up to five slot pairs at London Gatwick airport for use on routes between London and Dublin and London and Belfast. One slot pair must be used for London – Belfast, two slot pairs must be used for London – Dublin and the remaining two can be used for either route.
2. IAG must offer rival airlines special prorate deals for passengers connecting from Aer Lingus short-haul flights to long-haul flights operated by rival airlines at London Heathrow, London Gatwick, Manchester, Amsterdam, Shannon and Dublin airports. This is so rival airlines such as KLM and Virgin Atlantic can still offer passengers connections from Aer Lingus short-haul flights. Continue reading “The European Commission approves IAG’s takeover of Aer Lingus”
Following the news that the Irish Government has given its support for International Airlines Group’s bid for Aer Lingus and that Ryanair (which holds 30% of the shares in the airline) has also agreed to sell its stake, this means that, barring any last minute complications, it is now a near certainty that the bid will go ahead.
Full details of the bid can be viewed in the offer document. A more easily digestable summary of IAG’s bid for Aer Lingus can be viewed in this IAG presentation.
The news has been welcomed enthusiastically by IAG CEO Willie Walsh, citing the fact that Qatar Airways has recently joined the Oneworld alliance and British Airways has recently started co-operating with BA on areas such as codesharing on Qatar routes from Doha to Asia.
Willie Walsh also cites the opportunity for further commercial co-operation between Qatar Airways and IAG mber airlines.
There is certainly scope for greater collaboration. For example, BA still serves Doha via a stop in Bahrain and the two airlines could explore a revenue sharing joint-venture on routes to and beyond Doha, as BA has with other Oneworld alliance partners such as American Airlines and Japan Airlines.
At the moment there are no changes to the board structure of IAG. Should Qatar Airways wish to increase its stake in IAG, under EU ownership rules, it would be capped at 49%.
Qatar Airways is not the first Middle Eastern airline to invest in European aviation as Etihad Airways has taken equity stakes in a portfolio of airlines such as Air Berlin, Aer Lingus, Alitalia and Air Serbia. Etihad also has a codeshare relationship with Air France KLM. Emirates has so far eschewed taking equity stakes in other airlines.
Finally, it is also noteworthy that Qatar Airways has invested in IAG at a time when it’s share price is at an all time high, above 550p. IAG’s share price has previously hit lows of around 110p.
Aer Lingus say the bid remains conditional on, amongst other things, confirmatory due diligence, the recommendation of the Board of Aer Lingus and the receipt of irrevocable commitments from Ryanair and the Minister for Finance of Ireland to accept the offer.
The key stumbling block to IAG acquiring Aer Lingus will be the Irish Government which holds a 25.1% stake in the airline. The Irish Government will need to be satisfied that links between London Heathrow and Ireland will be maintained and Aer Lingus will not loose its Heathrow slot-holdings.
Here are some thoughts we gathered before Christmas on what may happen of IAG is successful in acquiring Aer Lingus.
Aer Lingus has issued a statement on Tuesday recommending the bid. International Airlines Group has also statement confirming that if the acquisition goes ahead Aer Lingus will maintain its own brand and join the Oneworld alliance and transatlantic joint-venture with BA and American Airlines. IAG will also seek to assuage concerns about the maintenance of links between London Heathrow and Cork and Shannon by entering into discussions with the Irish Government.
This post is perhaps for students of aviation rather than the travelling public at large, but it is something worth noting in any event.
We have written much in recent years about British Airways’ International Airlines Group (“IAG”) sibling Iberia, and the wildly divergent financial performance of the two airlines since the formation of IAG four years ago in 2011.
Since Iberia started to report very heavy losses in 2012, IAG has taken a number of steps to improve the performance of Iberia.
This has included a complete overhaul of its senior management by a new CEO and (after bitter and unedifying industrial action with some rather unpleasant anti-British sentiment) reaching new collective agreements with its pilots and other staff working groups.
When International Airlines Group (“IAG”) was formed a little under four years ago from the merger of British Airways and Iberia, it stated an ambition to acquire up to 12 additional airlines.
So far it has acquired two. These are bmi and Vueling. bmi has been integrated into British Airways (bmibaby was closed and bmi regional was sold). Vueling continues to operate on a standalone basis.
Today we learned of an approach by IAG to Aer Lingus. IAG confirmed in a statement to the Stock Exchange that it submitted a proposal to make an offer for Aer Lingus, which has been rejected by the Board of Aer Lingus.
Aer Lingus also formally acknowledged the approach, stating that the initial approach was preliminary, highly conditional and non-binding. Furthermore, in their view it under-valued the company.
Here are some small items of news we’ve gleaned so far, principally concerning London Heathrow
As expected, BA will move out of Terminal 1 in 2015 and consolidate its operations in Terminals 3 and 5.
Work will also be underway to improve the experience for connecting passengers at Terminal 3.
All departures from Terminal 3 are now from boarding gates with coaching from remote stands eliminated.
Automatic check-in is to be introduced for domestic flights (this was trialled on some short haul routes some time ago).
Self baggage tagging at check-in and automated boarding gates are also to be introduced.
There is likely to be limited growth in BA’s long-haul network in 2015, beyond what new routes have bed announced, namely Kuala Lumpur.
The Boeing 767 is to be retired from BA’s long-haul fleet by 2016, to be replaced by the Boeing 787. A small number of Boeing 767s will operate in a short-haul configuration until 2018. This will then leave all short haul flights operated with Airbus A319/320/321 aircraft.
BA referred to its Oneworld alliance partner Qatar Airways and a potential codeshare partner in China providing growth opportunities. However, it has to be said these have been mooted for some time.
The presentation also included a section on Avios which is the currency used by the British Airways Executive Club and Iberia Plus frequent flyer programme. It is also the name of a travel regards programme in its own right, formerly known as Airmiles. This is likely to be a growth area in the coming years with more potential airlines joining the programme, in addition to Meridiana Fly and FlyBe.
We’ll update this page further with any more points of interest from the presentations and Q&A session.