IB oneworld days numbered?
Apr 15, 2007 | 10:02 pm
#17
Original Member
Join Date: May 1998
Location: Portland OR Double Emerald (QF and AA), DL PM/MM, Starwood Plat
Posts: 19,593
Yes, they are involved in lots of takeovers now -- QF, IB, AZ and a couple of others too. With a long history of making tons of money at the edges of the system, going back 15 years. They now have over USD 30 billion under management, so can afford to have lots of deals going on at once.
Apr 20, 2007 | 4:03 pm
#23
Suspended
Join Date: Apr 2007
Posts: 1
Hello
I have decided to post to clarify some questions regarding the Iberia selling process .
First: the most credible source of information is Sepla , Iberia's pilots union , www.sepla.es , http://www.seplanews.com/ .
2 months ago the pilots said that IB managment informed them that several bids were made to IB shareholders and because of that the negociations regarding salary , productivity improvements and the new long-haul plane decision will be postponed until later this year , once the new shareholders take control of IB .
IB managament informed them that the spanish core-shareholders Caja Madrid , BBVA , El Corte Ingles , and others wanted to sell . They were initially financial investors that expected to sell in 2-3 years after privatization in April 2001 , but 9/11 came and they have been forced to wait until now .
This financial investor offered multiple times it's stake to BA , but no agreement was reached regarding price .
The actual process started in May 2006 when BA CEO said ..." a IB merger is not on BA's agenda ..." after a meeting in Madrid with IB managment.
Since them the Spanish banks have been looking for buyers , and have found several ....
Sepla revealed that a pre-agreement had been reached with Lufthansa at 4 Euros/Share for around 30% of IB's capital on hands of Spanish Banks .
"Lufthansa tiene apalabrada con Iberia una oferta a 4 euros por ttulo"(in english , Lufthansa has a pre-agreement for Iberia at 4 euros per share )
http://www.sepla.es/news/archives/009099.php
Source: SEPLA-EFE . Sepla is the Iberia pilots union .
You must remember IB shareholder structure:
40% Core Shareholders
60% Free floated in the market
Core Shareholders
BA and AA 9.95%
Caja Madrid 9.63%
BBVA 7.03%
Logista 6.45%
El Corte Ingls 2.89%
Other Spanish banks
Market
IB shares has raisen more than 100% , from below 2 Euros/Share to 4 Euros/Share in 9 months.
It's mandatory to report to the market authority the accumulation of more than a 5% of IB shares.
Last month State Street Bank reported surpassed the 5% limit on behalf of a 3rd party.
Last week, Apax Partners announced that have surpassed a 5% of IB shares .
Daily trading of IB shares raised from a 2% of IB's capital daily to more than 5% daily. Huge movements of IB shares in the last months.
In the meanwhile Texas Pacific Group , http://www.tpg.com/ , aproached IB . Everybody here believes that Texas Pacific came along with BA , so a succesfull TPG offer would mean IB stay at Oneworld , associated with BA .
However in the last week the Spanish govement warned that they don't want a Hedge Fund adquiring Iberia . The right opposition party shared the concern via it's economy speaker . This prompted that last thurday , IB managment asked TPG for the name of the necesary Spanish partner and if the offer came linked with an airline ( unofficialy , BA ) .
Sepla has said that they prefer an industrial partner over a Hedge Fund ... in other words , the extremly powerfull pilots unions favors the Lufthansa bid over the Texas Pacific Group bid ... .
Inside IB , the CEO Conthe favors BA while the CFO ,and chief strategist , Dupuy De Lome favors Lufthansa .
Both IB and LH CEO's denied the same morning ,that any "formal" meger talk were taking place between IB and LH , obviously the formal merger talks will be announced in the joint press conference that will de facto announce the merger.
LH CEO has been trying to cool IB shares with comments that IB shares were to expensive , etc ... last minute intentions to get a cheaper deal from minority shareholders ( unofficialy at 3.90 ).
In the next 2-3 weeks it's expected TPG to make a formal bid . When the first formal bid will be launched , in the next 30 days additional bids should be made , the Lufthansa bid plus perhaps some last minute surprise .
By the end of May , beginning of June the winner will be know , but few people here doubts that it will be Lufthansa plus a new Spanish Investor.
The Spanish investor is rumored to be ACS , the biggest european construction company that in the last week has adquired a 25% of Germany's #1 construction company Hochtief . ACS has 3 billions Euros at his disposal from a live credit line for adquisitions .
http://www.grupoacs.com/index.php/en/
ACS owns 20% of Clickair along with Iberia .
The other rumored Spanish partner for Iberia is Grupo Marsans, www.marsans.es , owner of Aerolineas Argentinas , Air Plus Comet .
Marsans CEO , Gonzalo Pascual , is the current Spanair president . Last thusday Marsans confirmed press reports that Gonzalo Pascual was in Germany ... without giving further explanations.
Numbers also favors the LH option for IB .
66% of Iberia passenger on intra-european routes out of MAD are transit passengers most of them to the long-haul south american routes . Only 33% of IB passengers out of MAD airport arrive or depart from Madrid .
European country of origin of LatAm routes:
1) Germany
2) Italy
3) France
4) UK
LH control #1 feeder market of IB long-haul routes , and has a deep foot on the #2 Italy . In contrast , BA only controls the #4 market.
There are significant german comunities in Argentina , Brasil , Chile , plus an increasing mutual comercial interest .
BA show lack of commitment for the Oneworld alliance . BA flights to Spain wouldn't move to new T5 at LHR , plus multiple others examples .
IB and LH fleets are similar . LH is #1 A-340 operator , IB is #2 . Both companies have large , rather modern fleets . In contrast BA has an old 747 fleet with some planes reaching the 20 years . Few weeks ago 5 BA 747 went technical simoultaneously , causing havoc on BA's long haul schedule ... we must remember this .
Given the deep links of IB with LAN , its reasonable to think that LAN would follow IB steps into Star Alliance .
Spanair shouldn't been any kind of a problem . SAS has put the "FOR SALE" on Spanair for years , without anybody interested ... . Hundred of millions of Euros of losses at Spanair . When Iberia launched Clickair , the chief Spanair pilot recruiter leave Spanair to lead Clickair pilots . Senior pilots and FA are leaving the Spanair boat and aproaching Iberia . By the way Spanair no longer operates long haul routes . The few they operated , the last ones to China , were a complete disaster .
While reading on this forum I have read from multiple posters that "Iberia don't deserve to be on the Oneworld Alliance" , ".. i book on iberia.com only to fly on BA metal on the codeshare ...." , "..avoid Iberia like the plague .. " , etc ,etc ... well , the desire of lots on this site will be fullfilled ... by June LH will take control of IB .
Obviously IB will swith to Star Alliance , http://www.staralliance.com , as soon as possible .
Anybody know what is the minimun warning period for an airline to leave oneworld ?
The combined LH-IB will be the biggest airline in the world based on revenues of more than 20 billion euros . More than 80 Millions passengers per year .
The combined fleet is awesome .
LH-IB Hub network
FRA... LH
MUC... LH
MAD... IB
BCN... XG
VLC... YW
ZRH... LX
LH CEO said last week that they expect 1 Billion Euros of operating results for 2007 . IB expected 250 Millions for 2007 , before the additional 100 Millions of extraordinaries coming from the Amadeus , www.amadeus.net , re-financing operation . By the way both IB and LH uses Amadeus , as both of them along with AF created the system .
It makes much more sense for IB an alliance with LH than with BA .
I have decided to post to clarify some questions regarding the Iberia selling process .
First: the most credible source of information is Sepla , Iberia's pilots union , www.sepla.es , http://www.seplanews.com/ .
2 months ago the pilots said that IB managment informed them that several bids were made to IB shareholders and because of that the negociations regarding salary , productivity improvements and the new long-haul plane decision will be postponed until later this year , once the new shareholders take control of IB .
IB managament informed them that the spanish core-shareholders Caja Madrid , BBVA , El Corte Ingles , and others wanted to sell . They were initially financial investors that expected to sell in 2-3 years after privatization in April 2001 , but 9/11 came and they have been forced to wait until now .
This financial investor offered multiple times it's stake to BA , but no agreement was reached regarding price .
The actual process started in May 2006 when BA CEO said ..." a IB merger is not on BA's agenda ..." after a meeting in Madrid with IB managment.
Since them the Spanish banks have been looking for buyers , and have found several ....
Sepla revealed that a pre-agreement had been reached with Lufthansa at 4 Euros/Share for around 30% of IB's capital on hands of Spanish Banks .
"Lufthansa tiene apalabrada con Iberia una oferta a 4 euros por ttulo"(in english , Lufthansa has a pre-agreement for Iberia at 4 euros per share )
http://www.sepla.es/news/archives/009099.php
Source: SEPLA-EFE . Sepla is the Iberia pilots union .
You must remember IB shareholder structure:
40% Core Shareholders
60% Free floated in the market
Core Shareholders
BA and AA 9.95%
Caja Madrid 9.63%
BBVA 7.03%
Logista 6.45%
El Corte Ingls 2.89%
Other Spanish banks
Market
IB shares has raisen more than 100% , from below 2 Euros/Share to 4 Euros/Share in 9 months.
It's mandatory to report to the market authority the accumulation of more than a 5% of IB shares.
Last month State Street Bank reported surpassed the 5% limit on behalf of a 3rd party.
Last week, Apax Partners announced that have surpassed a 5% of IB shares .
Daily trading of IB shares raised from a 2% of IB's capital daily to more than 5% daily. Huge movements of IB shares in the last months.
In the meanwhile Texas Pacific Group , http://www.tpg.com/ , aproached IB . Everybody here believes that Texas Pacific came along with BA , so a succesfull TPG offer would mean IB stay at Oneworld , associated with BA .
However in the last week the Spanish govement warned that they don't want a Hedge Fund adquiring Iberia . The right opposition party shared the concern via it's economy speaker . This prompted that last thurday , IB managment asked TPG for the name of the necesary Spanish partner and if the offer came linked with an airline ( unofficialy , BA ) .
Sepla has said that they prefer an industrial partner over a Hedge Fund ... in other words , the extremly powerfull pilots unions favors the Lufthansa bid over the Texas Pacific Group bid ... .
Inside IB , the CEO Conthe favors BA while the CFO ,and chief strategist , Dupuy De Lome favors Lufthansa .
Both IB and LH CEO's denied the same morning ,that any "formal" meger talk were taking place between IB and LH , obviously the formal merger talks will be announced in the joint press conference that will de facto announce the merger.
LH CEO has been trying to cool IB shares with comments that IB shares were to expensive , etc ... last minute intentions to get a cheaper deal from minority shareholders ( unofficialy at 3.90 ).
In the next 2-3 weeks it's expected TPG to make a formal bid . When the first formal bid will be launched , in the next 30 days additional bids should be made , the Lufthansa bid plus perhaps some last minute surprise .
By the end of May , beginning of June the winner will be know , but few people here doubts that it will be Lufthansa plus a new Spanish Investor.
The Spanish investor is rumored to be ACS , the biggest european construction company that in the last week has adquired a 25% of Germany's #1 construction company Hochtief . ACS has 3 billions Euros at his disposal from a live credit line for adquisitions .
http://www.grupoacs.com/index.php/en/
ACS owns 20% of Clickair along with Iberia .
The other rumored Spanish partner for Iberia is Grupo Marsans, www.marsans.es , owner of Aerolineas Argentinas , Air Plus Comet .
Marsans CEO , Gonzalo Pascual , is the current Spanair president . Last thusday Marsans confirmed press reports that Gonzalo Pascual was in Germany ... without giving further explanations.
Numbers also favors the LH option for IB .
66% of Iberia passenger on intra-european routes out of MAD are transit passengers most of them to the long-haul south american routes . Only 33% of IB passengers out of MAD airport arrive or depart from Madrid .
European country of origin of LatAm routes:
1) Germany
2) Italy
3) France
4) UK
LH control #1 feeder market of IB long-haul routes , and has a deep foot on the #2 Italy . In contrast , BA only controls the #4 market.
There are significant german comunities in Argentina , Brasil , Chile , plus an increasing mutual comercial interest .
BA show lack of commitment for the Oneworld alliance . BA flights to Spain wouldn't move to new T5 at LHR , plus multiple others examples .
IB and LH fleets are similar . LH is #1 A-340 operator , IB is #2 . Both companies have large , rather modern fleets . In contrast BA has an old 747 fleet with some planes reaching the 20 years . Few weeks ago 5 BA 747 went technical simoultaneously , causing havoc on BA's long haul schedule ... we must remember this .
Given the deep links of IB with LAN , its reasonable to think that LAN would follow IB steps into Star Alliance .
Spanair shouldn't been any kind of a problem . SAS has put the "FOR SALE" on Spanair for years , without anybody interested ... . Hundred of millions of Euros of losses at Spanair . When Iberia launched Clickair , the chief Spanair pilot recruiter leave Spanair to lead Clickair pilots . Senior pilots and FA are leaving the Spanair boat and aproaching Iberia . By the way Spanair no longer operates long haul routes . The few they operated , the last ones to China , were a complete disaster .
While reading on this forum I have read from multiple posters that "Iberia don't deserve to be on the Oneworld Alliance" , ".. i book on iberia.com only to fly on BA metal on the codeshare ...." , "..avoid Iberia like the plague .. " , etc ,etc ... well , the desire of lots on this site will be fullfilled ... by June LH will take control of IB .
Obviously IB will swith to Star Alliance , http://www.staralliance.com , as soon as possible .
Anybody know what is the minimun warning period for an airline to leave oneworld ?
The combined LH-IB will be the biggest airline in the world based on revenues of more than 20 billion euros . More than 80 Millions passengers per year .
The combined fleet is awesome .
LH-IB Hub network
FRA... LH
MUC... LH
MAD... IB
BCN... XG
VLC... YW
ZRH... LX
LH CEO said last week that they expect 1 Billion Euros of operating results for 2007 . IB expected 250 Millions for 2007 , before the additional 100 Millions of extraordinaries coming from the Amadeus , www.amadeus.net , re-financing operation . By the way both IB and LH uses Amadeus , as both of them along with AF created the system .
It makes much more sense for IB an alliance with LH than with BA .
Apr 21, 2007 | 12:28 am
#25
Join Date: Jun 2005
Location: New Zealand
Programs: NZ , QF , MK
Posts: 1,386
Thanks al200 for your very interesting post
I found several points particularly fascinating - that country of origin information for transfer pax at MAD made interesting reading , would you have the actual numbers of transfer pax from those 4 countries as well as the ranking ?
I have added a couple of comments below with regards to parts of your post
Spanair shouldn't been any kind of a problem . SAS has put the "FOR SALE" on Spanair for years , without anybody interested ... . Hundred of millions of Euros of losses at Spanair . When Iberia launched Clickair , the chief Spanair pilot recruiter leave Spanair to lead Clickair pilots . Senior pilots and FA are leaving the Spanair boat and aproaching Iberia . By the way Spanair no longer operates long haul routes . The few they operated , the last ones to China , were a complete disaster .
I didn't realise that JK ever operated to China , I thought that was UX ?
Anybody know what is the minimun warning period for an airline to leave oneworld ?
Things moved very quickly when CP was taken over by AC - according to the Oneworld website the announcement was made 14 March 2000 that CP would withdraw effective 1 June 2000 , a timeframe of a little less than 3 months from the announcement to the termination of membership .
http://www.oneworld.com/ow/news/details?objectID=1558
I found several points particularly fascinating - that country of origin information for transfer pax at MAD made interesting reading , would you have the actual numbers of transfer pax from those 4 countries as well as the ranking ?
I have added a couple of comments below with regards to parts of your post
Spanair shouldn't been any kind of a problem . SAS has put the "FOR SALE" on Spanair for years , without anybody interested ... . Hundred of millions of Euros of losses at Spanair . When Iberia launched Clickair , the chief Spanair pilot recruiter leave Spanair to lead Clickair pilots . Senior pilots and FA are leaving the Spanair boat and aproaching Iberia . By the way Spanair no longer operates long haul routes . The few they operated , the last ones to China , were a complete disaster .
I didn't realise that JK ever operated to China , I thought that was UX ?
Anybody know what is the minimun warning period for an airline to leave oneworld ?
Things moved very quickly when CP was taken over by AC - according to the Oneworld website the announcement was made 14 March 2000 that CP would withdraw effective 1 June 2000 , a timeframe of a little less than 3 months from the announcement to the termination of membership .
http://www.oneworld.com/ow/news/details?objectID=1558
Apr 21, 2007 | 7:05 am
#26
Join Date: Jun 2002
Location: London, UK
Programs: BA Gold(OWE), QF LTG, MR Plat, IHG Spire, Hertz PC
Posts: 8,156
I'm not going to bother to critique all statements from our 'cultural differences' poster but he should be aware that AA left IB's share register last year. Seems there are quite a few other statements he posts as fact are also clearly fiction.
Apr 23, 2007 | 7:30 am
#27
Join Date: Apr 2005
Location: HKG/LHR/JFK
Programs: AA EXP, BAEC Bronze, DL Plat UA, HHonors Platinum, SPG Gold, Hyatt
Posts: 3,256
Apr 23, 2007 | 11:14 am
#28
Join Date: Jun 2002
Location: London, UK
Programs: BA Gold(OWE), QF LTG, MR Plat, IHG Spire, Hertz PC
Posts: 8,156
Personally I think most of us need to take a deep breath and wait to see what happens. The IB story has a lot of legs left in it and we really are still only at the beginning.
Apr 25, 2007 | 3:11 pm
#29
Join Date: Jan 2007
Location: DFW
Programs: AA Gold, BAEC
Posts: 295
I believe i read somewhere that if IB is taken over by an offshore company that they lose landing rights or something along those lines (can someone corroborate), if so, doesn't it mean that a 49% stake is the most that a consortium or companies can reach.
Also, if LH were to buy them, would there be somesort of rebranding move, or would the fleeting IB remain IB....
Also, if LH were to buy them, would there be somesort of rebranding move, or would the fleeting IB remain IB....
Apr 25, 2007 | 3:59 pm
#30
Join Date: Jan 2007
Location: ZRH
Programs: QF, UA, DL, AB
Posts: 401
I believe i read somewhere that if IB is taken over by an offshore company that they lose landing rights or something along those lines (can someone corroborate), if so, doesn't it mean that a 49% stake is the most that a consortium or companies can reach.
Also, if LH were to buy them, would there be somesort of rebranding move, or would the fleeting IB remain IB....
Also, if LH were to buy them, would there be somesort of rebranding move, or would the fleeting IB remain IB....
Let me make an example to clarify: if Spain and Country X have an agreement that regulates flights between the two countries and this agreement includes limitations based on nationality (i.e. only Spanish and Country X carriers can fly these routes), then the takeover could become a problem. If more than 50% of IB is taken-over by BA/LH and therefore IB becomes a British/German company, it might lose the flight rights that are sealed in this kind of agreements (since IB wouldn't fulfill the nationality requirement anymore). The Spanish government would in this case have to renegotiate a new agreement with Country X (and all other countries with similar agreements) to avoid the loss of such rights for IB. Technically, I think it's a question of introducing the so called 7th freedom in the bilateral agreement (i.e. the right to carry passengers between two foreign countries without continuing service to (or originating service in) the carrier's own country). Hope some of the experts can help on this last point.
This is exactly what is happening in Switzerland too. LX hasn't officially been taken over by LH yet (shares are being held in a trust), since the Swiss government is negotiating new bilateral agreements to prevent LX from losing these rights when it becomes a German company.