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Merger of Iberia and British Airlines

Iberia and British Airways sign merger agreement

Iberia and British Airways have signed the agreement which will lead to the merger of the two airlines according to the National Stock Market Commission.

According to the National Stock Market Commission the merger which is expected to be completed by the end of 2010 will benefit share holders, clients and employees of both airlines and will create one of the world’s biggest airlines with a fleet of 408 planes and 200 destinations.

Together Iberia and British Airways currently carry over 58 million passengers a year.

Iberia withdraws from British Airways deal

Iberia to concentrate on its clientele and delay negotiations over the fusion with British Airways until the autumn

Fernando Conte, the President of Iberia, has withdrawn from negotiations over the possible fusion with British Airways. Future plans with regards to this have been put on hold until later this year. He said that the British Airways’ pension fund which currently has a deficit of 1.2 million (1,290 million euros) would need to be revised in September.

Conte also said that improving its service to its clientele was of now of utmost importance to Iberia. He recognised that improvements could be made especially during the present climate in which all airlines were fighting to win over more passengers. He announced that Economy class facilities would be renewed and ways of improving Business class would also be studied.

Conte warned that if the ‘dramatic crisis’ continued more cuts would have to be made in capacity and in its workforce and that more redundancias would have to be made. Iberia is currently in negotiations over temporary redundancies covering 10% of its workforce.

Commenting on the government’s plans to freeze airport taxes in Conte said that airport taxes were reasonable but that navigation taxes were unacceptable.

Fusion of Clickair with Vueling

Clickair approves fusion with Vueling to create the first Spanish low cost airline

Yesterday the board of directors of Clickair gave the go ahead to the fusion of their company with Vueling whose board of directors also approved the project last week. The new company is forecast to begin operating in June this year with 39 routes 23 of which will be to international destinations. The current chairman of Vueling, Josep Piqué, will continue in his position and the chairman of Clickair, Alex Cruz, will be the new company’s first chief executive.

Iberia has confirmed that it will hold onto its 20% ownership of Clickair and that this could rise to 45%. Nefinsa will also retain its interests in the new Vueling although only as a minority shareholder. Iberia said that some of the handling and maintenance for the new company will be carried out by Iberia or its associates.

Following approval of the fusion by the shareholders of both Vueling and Clickair the operation to absorb Clickair into Vueling will begin and Vueling will acquire all the rights and obligations previously held by Clickair.

The type of exchange proposed for the fusion is 2.98 shares of a euro for Vueling for every share of 10 euros for Clickair something which needs to be approved by both companies board of directors.

Acquisition of Spanair by Catalan consortium

Catalan businessmen, the Catalan regional government and the town hall of Barcelona to buy Spanair

A group of Catalan businessmen and women together with the Catalan regional government and the town hall of Barcelona have acquired 80.1% of Spanair, the second largest Spanish airline.

The group of business men and women and institutions which form the la sociedad Iniciatives Empresarials Aeronàutiques reached an agreement with the current owners of Spanair the Scandinavian company SAS before the deadline of 31st January expired.

SAS will continue to own 19.9% of Spanair and will be responsible for Spanair's debts of 500 million euros according to the Catalan association which has confirmed that in the next few weeks a definitive deal will be signed. SAS will also keep control of the operative management of Spanair.

The Aeronautical Association of Business Initiatives includes the following Catalan groups - la sociedad de capital riesgo Catalana d'Iniciatives, Consorci Turisme de Barcelona – which belongs to the town hall, Volcat 2009, Fira de Barcelona, the Catalan regional government, a group of business men and women from the Catalan tourist sector together with business representatives from other parts of Spain.

According to information on its web page Catalana d'Iniciatives consists of a group of buisnesses including La Caixa, Santander, Gas Natural, Telefónica, Repsol YPF, Ferrovial, CAM, Endesa and the town hall of Barcelona.

The acquisition of Spanair implies expanding the group's capital by 100 million euros which will be taken on by new partners.

The business plan behind the acquisition of Spanair is based on promoting Barcelona as a platform for future growth, taking advantage of the new T1 terminal, the cancellation of non profitable routes and a reduction of costs by improving operations and supply.

According to the new owners of Spaniar the airline will strengthen routes where there is strong demand from business passengers on weekdays and routes where there is strong demand from passengers who travel for leisure at the weekend and during the holiday season.

It also hopes that the routes between Barcelona-Madrid-Palma de Mallorca are strengthened as well as routes to the Canary Islands.

Over recent months Spanair has made 775 of its workers redundant as a means of reducing its operative base.

Ryanair routes to Alicante

Ryanair has announced four new routes from Alicante

Ryanair has announced that it will be operating four new routes from El Altet airport in Alicante starting in the summer. The new routes from Alicante will be to Bristol (UK), Derry and Knock (Ireland) and Breslavia (Poland). The Irish lowcost airline also announced the incorporation of a new plane in its base in the airport which will continue with a total of three Boeing 737-800NG.

The flights to Bristol will operate on a daily basis and there will be two flights to Derry Knock and Breslavia every week.

Luis Fernández-Mellado, who is in charge of Marketing and Sales for Ryanair in Spain said that figures for passengers travelling to and from El Altet airport in Alicante had increased considerably thanks to Ryanair. With this new announcement Ryanair will operate a total of 32 routes from Alicante. He said that the new routes together with current routes to London Gatwick, Palma de Mallorca and Madrid show the commitment that Ryanair has to El Altet airport and mean that it will carry around 200,000 passengers to and from Alicante annually.

According to Fernández-Mellado, Ryanair intends to improve passenger figures for 2008 and continue increasing its routes to Alicante offering the lowest fares. He also said that the addition of another aircraft to the company’s base in Alicante would mean that the number of its permanent staff in Alicante would go up.
Fernández-Mellado said that Ryanair’s commitment to Alicante was very positive for the whole region and would help promote it as a top tourist destination.

Ryanair has decided to celebrate the opening of new routes by offering 1 million tickets for just 1 euro each. Tickets can be reserved until midnight on 19th January 2009 and are for travel between 27th January and 12th March. Tickets cannot be bought for travel between 12th and 23rd February to or from the UK or Ireland. Tickets must also be bought at least 14 days in advance and are subject to availability.

Ministry of Transport to investigate Iberia's treatment of passangers

Ministry of Transport to take action against Iberia for its treatment of passengers
The Ministry of Transport has announced that it intends to carry out an investigation into how far Iberia had fulfilled its commitments under the law to passengers. After three days of chaos with thousands of passengers affected, cancellations and delays to flights operated by Iberia look set to continue.

The Minister for Transport, Magdalena Álvarez, announced the measure yesterday during a press conference in Madrid-Barajas airport. She said that Iberia’s behaviour towards it passengers had been inexcusable referring to three flights to Buenos Aires, Lima and Montevideo. On these flights passengers had already boarded the plane when they were informed by the pilot that he had gone over the permitted time for flying and were forced to get off again.

Yesterday the company cancelled 56 flights and the rest of its flights were subject to delays.

A spokesperson for Iberia said that the company would provide all the information required and insisted that it had kept the Ministry of Transport fully informed at all times.

When action is taken against a company the first step is to ask for information on the situation followed by justification of its actions. The next step is to decide on sanctions if it is found to have acted incorrectly. According to the law on air safety the fine for a serious breach of the law is between 450,000 and 4.5 million euros.