Originally Posted by
FD1971
Iberia's profits never came from South America and BA is also not benefitting from massive restrictions...so BA took over Iberia because of their brilliant European Network and their killer routes from Asia to Madrid etc.
My friend, understanding aviation is more than a set of results from one year...
What you see taking a look at BA and IB is the result of regulation working out almost perfectly for both airlines, so exactly the difference Clark is praising and demanding at the beginning of the interview...
The fans reading the interview do not realize the crap he is coming up with, but for an educated reader the interview is a beautiful summary of fairy tales that fit him when he needs them.
Of course, there's no denying that IB's profit center is the South American market and that was a major rationale for the merger - bigger rival (BA), sees lucrative route access in new markets available on the cheap due to IBs losses in 2008/2009 and general weakness in the Spanish economy, its attractive cash on balance sheet that it could potentially use to plug its pension deficit and the bar to higher profits in IB being structurally high costs, which Willie Walsh is quite skilled at cutting.
It's taken him 5 years, but I think that strategy is bearing fruit.
But it's still inaccurate to state now that IB and South America provides (and has ever provided) the bulk of IAGs profits. BA is still the profitable airline that has had to support IB during cost cutting and turnaround, wouldn't you say - given the last 5 year results, not just 1 year.
Of course in future, I would expect to see profits coming out of IBs operations as the long-term strategy starts to work.