Merged British Airways/Iberia shares begin trading
Monday, January 24, 2011
LONDON (AP) — Shares in the new company controlling British Airways and Iberia began trading Monday in Europe, and the leaders of Europe’s third-largest airline were already talking about expansion.
Stock in the new holding company, International Consolidated Airline Group SA (IAG), was admitted to exchanges in London, Madrid, Barcelona, Bilbao and Valencia. The shares opened at 282 pence ($4.50) in London and were up at 284.8 pence at 0901 GMT.
“British Airways and Iberia are the first two airlines in IAG but they won’t be the last,” IAG’s chief executive, Willie Walsh, said at the London exchange.
“Our goal is for more airlines but, importantly, the right airlines to join the group. Today is the first step towards creating a multinational multi-brand airline group,” said Walsh, who had been British Airways’ chief executive.
British Airways and Iberia will continue flying under those names. Their merger is intended to achieve cost savings while expanding the reach of both brands.
The new group has a fleet of 406 aircraft, serving more than 250 destinations and carrying around 57 million passengers a year. Annual revenue is estimated at around 12 billion pounds ($19 billion), ranking behind Germany’s Lufthansa AG and Air-France KLM.
A key benefit for BA is Iberia’s greater access to South American routes, while Iberia will gain from BA’s more extensive North American operations.
BA shareholders got a 56 percent stake in the new company.
Last year, BA abandoned merger talks with Australia’s Qantas Airways, but Walsh said in September that he had a target list of around a dozen carriers.
The pair also plan to expand their oneworld alliance with American Airlines. U.S. antitrust laws bar a full-scale merger with the U.S. airline, but the trio still plan to set prices together and share seat capacity on trans-Atlantic flights.
International Airlines Group is registered in Madrid, but its financial and operational headquarters is in London.
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