Following the collapse of merger negotiations in 2008 between British Airways and Australian carrier Qantas, International Airlines Group chief executive, Willie Walsh, has ruled out the possibility that they will be reopened. He said that, at the time, the synergies between the two flag carriers were ideal, but that leaks about the negotiations had scuppered the process.
At the end of last year, Mr Walsh said IAG would be looking to expand through tie-ups with other international carriers or through takeovers. He added that a list of 12 potential candidates had been drawn up, without releasing further details. Many industry insiders said at the time that Qantas was likely to be high on that list. Other possibilities included American Airlines, Cathay Pacific, Finnair, Japan Airlines and Chilean airline LAN.
Recently, Portugal’s TAP has been mooted as a possible acquisition. Although Mr Walsh denied having any discussions with the Portuguese government about the flag carrier, it is believed that the airline will be put up for sale as the country continues to battle its financial problems.
Mr Walsh predicts that as the price of oil remains high many airlines will be forced to seek partnerships in order to survive. He said that low-cost carriers were most at risk because jet fuel accounted for such a large percentage of their operating costs.
He pointed out that budget airlines were also unable to take advantage of the recovery of the cargo industry and the return of passengers willing to pay for premium class seats.