Iberia’s Conte on consolidation

Iberia CEO Fernando Conte was in London yesterday at an extremely opportune – and accidental – time. He was giving a long arranged speech that turned out to be just a day before its suitor British Airways announced it was eyeing a deal with Australia’s Qantas Airways.

BA and Iberia have been exploring a merger for some months.

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So when did Conte find out that BA was also talking to Qantas, asked my colleague Kevin Done from the FT? “I knew it one hour before it was published. BA CEO Willie Walsh called me and informed me of the discussions,” he told the audience at the Aviation Club.

Conte seemed relatively unruffled, but he was ready for the question. So, does it matter that BA is talking mergers with two carriers at once, albeit they are in different continents?

In some ways probably not, but the inference in the question is: can BA actually run two large mergers at once, and is it a question of either/or?

Conte himself has been courting and been courted for some time. “One year ago we were in discussions with many [potential] partners,” he told the press throng.

He knows the value of Iberia, describing it as “very attractive” because of its solid balance sheet and strong market position on the South and Latin American markets.

Conte has been looking for partners in the Latin region for some years, but as no deal has ever come forth he’s clearly not found the right one there.

Now his attention is focused on BA, and he must feel the Qantas news is a unwanted distraction.

His view on the sequencing of consolidation is clear, as I wrote in this story for our sister online news service Air Transport Intelligence:

Regional mergers will come first, says Iberia CEO Conte

 

While he believes that global consolidation will arrive eventually, Iberia chief executive Fernando Conte said that for the time being the more realistic possibility of mergers is within continents.

 

“The fact is that if you want to do something between two different continents today it is too complex,” he said. Conte was speaking at the UK‘s Aviation Club in London the day after merger talks between British Airway and Qantas Airways were announced. BA and Iberia are also several months into their own merger talks.

 

Consolidation in Europe has been successfully achieved, he said. “It has been done within the region and that has been proved – we haven’t proved anything besides that,” he said, referring to the prospect of global consolidation.

 

“We can say that the merger between BA and Iberia, if it takes place, will be one of the most important steps in the consolidation process of the European airline industry, and probably will set the scenario for a more global one,” he said.

 

He denied that for BA it was a case of “either/or” when it came to finalising a large merger deal with either Iberia or Qantas.

 

Read the Airline Business cover interview with Willie Walsh from earlier this year.

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