Share price volatility and BAs future

Old Mar 10, 20, 6:14 am
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Share price volatility and BAs future

Interested to hear some of your wise views on this?

The share price has taken a very heavy hit in the last 2 weeks but is there a medium term opportunity to bounce back where other carriers will fall?

What is BAs exposure relative to overall revenue?

How well are they cutting back now to avoid empty seats and waste?

Will we see multiple mergers this year?
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Old Mar 10, 20, 6:32 am
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IAG very likely to be target of VC buy out from west coast. IMHO.
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Old Mar 10, 20, 6:38 am
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Far too mature a business for VC to be interested surely.
PE money has generally gone towards the financing/leasing end of the market when it comes to aviation.
Doesn't Qatar have a large stake in IAG? I'm guessing that their strategic position is quite price insensitive, so a large premium would need to be paid. A 10bn+ PE deal in the UK. Would raise a lot of eyebrows especially if it was foreign money - I can hear the headlines demanding nationalisation (from the same papers that were against Labour's planned nationalisations).
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Old Mar 10, 20, 6:42 am
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Originally Posted by wanderingjock View Post
IAG very likely to be target of VC buy out from west coast. IMHO.
I'm guessing that is Venture Capital and not Voyageur Airways.

I thought there was some EU rule that stated 50% +1 had to be EU (domicile) owned?
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Old Mar 10, 20, 6:42 am
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Yep, that makes sense, but huge amount of tech $ sloshing around now looking for bargains and with NYC lawyers in board positions. Some of the whales in distressed industries are there for the hooking.
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Old Mar 10, 20, 6:43 am
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Originally Posted by JohnnyCarmello View Post
Doesn't Qatar have a large stake in IAG?
25.1%

See: https://www.google.com/amp/s/amp.ft....d-25e377c0ee1f


Qatar Airways has raised its holdings in British Airways owner IAG to 25.1 per cent as the Middle Eastern carrier ramps up its strategy of investing in other airlines.
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Old Mar 10, 20, 6:44 am
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Originally Posted by JohnnyCarmello View Post
Far too mature a business for VC to be interested surely.
PE money has generally gone towards the financing/leasing end of the market when it comes to aviation.
Doesn't Qatar have a large stake in IAG? I'm guessing that their strategic position is quite price insensitive, so a large premium would need to be paid. A 10bn+ PE deal in the UK. Would raise a lot of eyebrows especially if it was foreign money - I can hear the headlines demanding nationalisation (from the same papers that were against Labour's planned nationalisations).
Se the post below yours. NOT a uk company. Spanish/ EU.
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Old Mar 10, 20, 6:45 am
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I can't see vc money getting into this. It's a far too mature business. And I'm sceptical of pe interest as well. Not sure there is much more cost cutting or streamlining that can be done.
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Old Mar 10, 20, 6:51 am
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Originally Posted by LondonElite View Post
I can't see vc money getting into this. It's a far too mature business. And I'm sceptical of pe interest as well. Not sure there is much more cost cutting or streamlining that can be done.
Discount to NAV can be tempting for some of the Santa Clara firms I'm aware of.
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Old Mar 10, 20, 6:58 am
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It's more likely IAG and RYR who are the strongest European airline groups from a balance sheet and cash reserves perspective will be hovering looking to pick up the remnants of any airlines that fail.

MOL's prediction of years ago that consolidation would lead to only the big 5 (IAG, RYR, LH Group, AF/KLM Group, EZY) remaining might actually bear fruit if this continues well into the summer.

Share prices will rebound over time.
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Old Mar 10, 20, 7:09 am
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Originally Posted by McG View Post
It's more likely IAG and RYR who are the strongest European airline groups from a balance sheet and cash reserves perspective will be hovering looking to pick up the remnants of any airlines that fail.

MOL's prediction of years ago that consolidation would lead to only the big 5 (IAG, RYR, LH Group, AF/KLM Group, EZY) remaining might actually bear fruit if this continues well into the summer.

Share prices will rebound over time.
I'm not sure I agree 100%. Some governments will not allow their flag carrier airlines to fail unless EU rules force it. Can you imagine LOT or Czech or Alitalia or TAP folding?
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Old Mar 10, 20, 7:13 am
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Originally Posted by USA_flyer View Post
I'm not sure I agree 100%. Some governments will not allow their flag carrier airlines to fail unless EU rules force it. Can you imagine LOT or Czech or Alitalia or TAP folding?
Yes. Just like Swissair and Sabena did a few years back.
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Old Mar 10, 20, 7:17 am
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Originally Posted by DYKWIA View Post
Yes. Just like Swissair and Sabena did a few years back.
I am quite prepared to be wrong.
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Old Mar 10, 20, 7:19 am
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Originally Posted by wanderingjock View Post
IAG very likely to be target of VC buy out from west coast. IMHO.
bit extreme just to get a Newquay service?
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Old Mar 10, 20, 7:26 am
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With a 5-member oligopoly, European airline fares would end up like the USA, where the oligopoly and barriers to entry for new airlines are so entrenched that fares are much higher than in Europe. I think MOL's prediction is at least somewhat likely, but I don't anticipate it with any pleasure.
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