A British Airways-Iberia merger: what does it change?

The fact that Iberia and British Airways are planning to merge isn't news by now. The deal's going to mean that the combined airlines become the third-largest airline group (behind Air France-KLM and Lufthansa), and there's the usual talk of synergies and cost savings, etc. We are laying the foundations of what will be one of the most important airlines in the world, a real global airline, said Iberia CEO Antonio Vázquez. I believe that, thanks to this transaction, which is the most important in the European airline industry in recent years, we are more prepared than ever to face future challenges. Meanwhile, British Airways CEO Willie Walsh has said that the merger will create a strong European airline well able to compete in the 21st century. Both airlines will retain their brands and heritage while achieving significant synergies as a combined force.

Sound familiar? Check out what the CEOs of Northwest and Delta had to say back in 2008. And I'm sure it's been said many times before. But besides giving graphic artists the chance to create some hybrid BA-Iberia tails, what does the deal really do? What do these types of mergers do nowadays, anyway? Sure, the deal will help both airlines stave off the other two big airline groups in Europe, but will it effectively deal with BA's oft-publicized woes? Or, as one comment on the BBC's website asked:
Will the cost of jet fuel be any cheaper if they merge? Will the service be better? Will things go back to the golden days of air travel when you could take just about all the luggage you wanted for free, and the onboard meals where for free as well as the soft drinks? Will there be more legroom in economy class? Will we be treated slightly better than cattle? Will they ban cell phone chatter and lap top tickering on planes - finally, thankfully? Will there be Peace and Quiet? No? Why merge?
Granted, no one's expecting the glory days of air travel to come back; nor does the merger have much to do with cell phone use or legroom, of course. But it did make me think about how airline CEOs sometimes talk about mergers as silver bullets - even if they don't really change much, as the BA-Iberia linkup will probably do.

7 comments:

Rory said...

Walsh hinted a few months ago that the first change would come on short-haul services... many of the routes don't make money and BA are torn between downgrading the service (no free booze, buy-on-board food etc...) and confusing consumers - a big part of their advertising is that these extras make up for the, often slim, price premium over EasyJet.

Walsh has suggested that, post-merger, some routes, particularly those from LGW, will be Iberia branded, offering the lower-cost product that they already have. Given Iberia's recent announcements about further downgrading the service on short-haul flights, I think we might see this project accelerate.

Andrew Thomas said...
This comment has been removed by a blog administrator.
Francisco de Montejo y León said...

This merger will still charge over priced tickets, except to Stag night resorts instead of high-brow locations.

http://en.wikipedia.org/wiki/File:Sanzio_01_Plato_Aristotle.jpg

Auto Shippers said...

Sounds like a pretty big deal to me!

Airline Complaints said...

this is a very big deal no doubt, but how long will integration take? how seamless will the transition be? customer experience is key - northwest delta is still suffering from it in my opinion. i was a platinum, now i am a silver - and the services are much poorer

Ashok Saraf said...

British Airways treats Gold Card Members badly! My recent experience with BA has been bad. Delayed Flight, Onward Flight not connected. Nobody to attend. Stranded at London Airport for the night without a Hotel & Bags.
Ashok M Saraf,
http://goo.gl/Df2rhD

Ashok Saraf said...

British Airways treats Gold Card Members badly! My recent experience with BA has been bad. Delayed Flight, Onward Flight not connected. Nobody to attend. Stranded at London Airport for the night without a Hotel & Bags.
Ashok M Saraf,
http://goo.gl/Df2rhD