Analysis of IAG airlines (Iberia) current event
IAG, the subsidiary of Iberia with British Airways, had already agreed to purchase Spanish aircraft Air Europa to €1bn in such a deal it claims would strengthen Madrid’s role as more of a European Centre. This would be the third Spanish label throughout the airline community, under the flag carrier as well as minimal-cost Vueling.
In such a comment to either the stock market, IAG said that Air Europa, which performs flights on 66 planes to 69 destinations, will increase its position on the transcontinental South American industry as well as assist Madrid to start competing to Frankfurt, Prague, Paris Charles de Gaulle as well as London Heathrow (U.S. News & World Report, 2019). Several of Europe’s key hub terminals would want to be known as one of the most important linking the continents with Latin America; however, it was usually Madrid which reigned supreme.
The economic crisis of Spain, as well as its effects on Iberia, challenged that position a few years earlier once the airline cut off most of several longer-term operations westbound, offering up a window of opportunities towards competitors. The newly announced acquisition deal among Iberia (a component of IAG) as well as Air Europa (Globalia), expected to be completed at 2H2020, technically shifts the balance towards Madrid’s advantage. Although it remains not even clear what the Latin American area would be accommodated by the merged airline as the broader Iberia aims to become a ‘360° hub.’
Elaborating on both the purchase contract with Air Europa Lineas Aereas for almost EUR 1 billion, Iberia’s CEO Luis Gallego stated that the purchase would enable the Madrid hub better stay competitive with many other European hubs. He appended: “The Madrid Centre has wasted its place with many other European hubs,” adding that along with Air Europa’s long-term fleet Iberia would indeed be capable “to provide 63 long-haul planes, equivalent to that of the 65 Air France-KLM aircraft.” (U.S. News & World Report, 2019). Mr Gallego was optimistic that even though the buying process might end up taking 18 to 24 months, this will draw 2H2020 to complete. He maintains that Iberia already performed a route-by-route study, therefore is persuaded that the transaction would help users.
To IAG 2019 represents a landmark year. It represents British Airways’ anniversary, also Vueling’s fifteenth anniversary. The BA anniversary is far much accurately as much as the predecessor business Aircraft Transport as well as Travel Limited (than bland a brand as Global Consolidated Airline Group), one that introduced the globe’s first regular scheduled global service connecting London to Paris during August 1919. However, this year represents moreover 50 years after Concorde’s first aircraft from 2-Mar-2019 (Capa, 2019). IAG hits economic milestones, too. Its currently published financial outcomes from 2018 show its ongoing leadership regarding profit margins as well as return from asset value amongst European legacy airliner classes.
Nonetheless, for BA’s past glory achievements next year would be a reminder which despite it would be much enhanced financial results, since before the days as it was Skytrax World Airplane of the Year when comparatively lately as 2006 the name has lacked certain shine. That this integration landmark has been hit, that always has in the industry for two as well as a half years, IAG expects to keep pursuing the deal to extend the airline’s footprint (Capa, 2019). IAG CEO Willie Walsh remarked: “We aim to expand the alliance with more airlines-but, most significantly, the right carriers. Today would be the first phase into the formation of a global alliance of dual-brand airlines.
Reference
Capa. (2019, March 8). IAG SWOT: Europe’s leading legacy airline group hits milestones. Retrieved from https://centreforaviation.com/analysis/reports/iag-swot-europes-leading-legacy-airline-group-hits-milestones-462687
U.S. News & World Report L.P. (2019). European Airline Giant Buys Spanish Carrier Air Europa. Retrieved from https://www.usnews.com/news/business/articles/2019-11-04/european-airline-giant-buys-spanish-carrier-air-europa