British Airways Parent on the Hunt for Next Dealby and
CEO Walsh says IAG has `ambitions beyond Aer Lingus'
Further consolidation opportunities under evaluation
British Airways-parent IAG SA is examining “potential opportunities” for its next acquisition after adding Ireland’s Aer Lingus Group Plc to its stable of airline brands, Chief Executive Officer Willie Walsh said.
IAG has “ambitions beyond Aer Lingus” and a holding-company structure “that can facilitate future consolidation,” though isn’t yet engaged in active discussions, Walsh told reporters in Dublin Wednesday.
IAG won Irish government backing for the 1.4 billion-euro ($1.6 billion) Aer Lingus deal in May, giving it a total of four brands after British Airways merged with Madrid-based Iberia and later added discount specialist Vueling. Walsh, who also bought British Midland to boost BA at London Heathrow, has improved Iberia’s margins with a network revamp and thousands of job cuts.
“We can dedicate resources within IAG and allow airlines operating within the group to focus on challenges without distracting them from the day-to-day,” the CEO said. “We’re currently evaluating potential opportunities but not active in any particular area at this time.”
Walsh, an Irishman who began his career at Aer Lingus, managed to steer through the deal after it was initially rejected in Ireland by highlighting the potential to create jobs and use Dublin as gateway on trans-Atlantic routes as a crowded Heathrow suffers from a lack of free takeoff and landing slots.
IAG, as International Consolidated Airlines Group SA is known, is continuing to hedge on fuel even as crude trades below $50 a barrel, Walsh said, adding that while current prices provide “a little bit of a tailwind” for most airlines, the positive impact is partially offset by the strength of the U.S. dollar.
Group earnings rose 40 percent to 530 million euros in the second quarter, and IAG shares have gained 22 percent this year, giving a market value of 12 billion pounds ($19 billion). The London-based company reports third-quarter results on Oct. 30.