IAG chairman Vazquez says group open to M&A opportunities, but not at any price

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Combined British Airways and Iberia entity International Airlines Group is open to merger and acquisition opportunities beyond its current target of British Midland International, but only if they are a "good fit", according to its chairman Antonio Vazquez.

"Some acquisitions are an opportunity to enlarge your amount of problems," he told an Aviation Club luncheon in London on 7 December, when asked about potential takeovers among Europe's clutch of financially-embattled small airlines. "It is not about a good price or a bad price. From the operational side and the financial side, it has to be a real fit."

The former Iberia chief executive also set out a three-point strategy for IAG: reinforcing the group's "leadership across the Atlantic"; "strengthening the hubs" at London Heathrow and Madrid, and particularly expanding in the Spanish capital which "has a lot of opportunities to grow"; and increasing routes to Asia and Africa.

He said IAG - which is marking its first birthday - had the potential to grow much bigger. "I believe we have created a unique model which will allow us to become one of the greatest drivers of consolidation," he told attendees.

However, he suggested pressure for mergers and acquisitions over the next few years would strain alliances as carriers sought marriages outside their partner airlines, such as oneworld carrier LAN Chile's union with Brazil's Star Alliance airline TAM. "It is not an easy time for alliances," he said. "The integrity of alliances has to be working well."

Vazquez said Iberia was pressing ahead with plans to launch low-cost arm Iberia Express as a feeder service to its long-haul routes out of Madrid, despite opposition and a strike threat from pilots' unions over proposed new employment contracts. "I am convinced one year from now I will be able to say that Iberia Express has been a success," he said.