BA looks beyond Iberia for new deals - American Airlines could be candidate

BA looks beyond Iberia for new deals - American Airlines could be candidate
By Pilita Clark, Aerospace Correspondent
Copyright The Financial Times Limited 2009
Published: November 13 2009 21:32 | Last updated: November 13 2009 21:34
http://www.ft.com/cms/s/0/6289475a-d099-11de-af9c-00144feabdc0.html


British Airways is already eyeing further deals with other airlines after clinching its long-awaited merger with Spain’s Iberia to create Europe’s third-largest carrier.

American Airlines, which already has links with BA through the OneWorld alliance, would be one potential candidate, said Keith Williams, BA’s chief financial officer. He said that BA hoped the structure of the Iberia deal, one of the biggest in the global aviation industry, could prove a template for other tie-ups, including carriers in Asia-Pacific and India.

A new holding company, called TopCo, will own both airlines and be tax-resident in Spain, where it will be registered as a company.

Both airlines will maintain separate corporate structures partly to preserve international traffic rights.

“We’ve always been saying that Iberia is a step to BA being a global airline and that we see scalability as being important, which is why in a sense we’ve left the name TopCo in place because what we see is a company that can own several brands,” Mr Williams told the Financial Times.

The US, like many other countries, forbids the foreign ownership of airlines, “but that might change”, Mr Williams said, as the second stage of so-called open skies liberalisation negotiations progress between the US and Europe.

“We’ve always had a desire to have something that had scalability over time, that might be American [Airlines],” he said. “The other parts of the world which clearly are developing are the Far East and India so you know there are other areas of the world that we would be interested in.”

The comments of Mr Williams, who will become chief executive of the BA operating company under TopCo, came as the first signs of potential obstacles to the Iberia merger appeared.

The Unite union, which is already threatening BA with strike action in the run-up to Christmas, is seeking assurances that core UK-based jobs in areas such as customer service, maintenance and cabin crew will be protected. BA shares rose 0.93 per cent to 217p. Iberia fell 3.15 per cent to €2.15.