London – British Airways PLC and Spain’s Iberia Lineas Aereas de Espana S.A, which are in the process of completing a merger, have identified 12 potential airlines that could be brought into the merged company, the company’s Chief Executive-designate, Willie Walsh said this weekend.
International Airline Group, or IAG, as the combined airline will be called after the deal closes, has already identified airlines that could be brought into its structure, Walsh told reporters at a media briefing in Mumbai, India.
Walsh was speaking after announcing a codesharing agreement with India’s Kingfisher Airlines Ltd for India, Sri Lanka, the UK and continental Europe from Sept. 15. His remarks indicate that IAG plans to take a lead in continued airline consolidation.
“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,” Walsh, previously CEO of British Airways, said in reported remarks verified by a U.K.-based spokeswoman. “We are creating IAG in a way to ensure that it is scaleable and attractive to other airlines that might want to join us.”
The two companies’ management teams initially had a list of 40 airlines which it has since whittled down to 12, Walsh said.
“This is just to give us a focus. We have not had any discussions with any airlines. There is nothing going on at the moment,” he said, adding “we would not pursue all 12.”
Walsh didn’t specify how these other airlines could be brought into the IAG structure. IAG is a holding company that will have British Airways and Iberia as operating subsidiaries that will each still qualify as national carriers in their local countries after the merger.
A report in the U.K.’s Mail on Sunday newspaper said BA was focusing on acquiring a South American airline and said the “most obvious” partner would be Chile’s LAN airlines, which is merging with Brazil’s TAM.
The BA spokeswoman said Walsh hadn’t identified any specific airlines to the press. She wouldn’t comment on the accuracy of this report.
Under the proposed BA/Iberia merger, which would create Europe’s third-largest airline, BA would take 56% of the enlarged company, while Iberia shareholders will own 44%. Iberia has until the end of September to decide whether to accept the deal or walk away from it at the cost of a break fee of EUR20 million.