BA boss eyes fresh round of merger deals

BRITISH AIRWAYS chief executive Willie Walsh has drawn up a hit list of a dozen companies he wants to buy after he has sealed his merger with Iberia and American Airlines in a bid to become the biggest airline group in the world.

Walsh said: “The mergers with Iberia and American were never meant to be an end in themselves. I have sat down with Iberia and we initially looked at 40 like-minded airlines who believe that the future of the industry lies in consolidation. We have since narrowed this down to 12. Becoming the biggest airline group in the world is not a bad ambition to have.”

Currently BA is dwarfed by Germany’s Lufthansa and Anglo-Dutch outfit Air France-KLM, and is threatened by fast-growing Middle Eastern rivals like Emirates and Etihad.

The BA chief, who was speaking in Mumbai after having launched an improved 777-300ER long-haul service to the Indian capital, would not be drawn on who was on the list. But sources close to the airline say possible targets include Qantas, Cathay Pacific, Air Berlin and Gulf Air.

Walsh, 48, said: “This is a long-term plan and some of this won’t be completed until after I retire. But the larger group will be set up with the intention of pursuing consolidation.”

Walsh will start looking at cutting his next airline deal in 18 months to two years time and his first job is to pursue €400m (£333.9m) a year worth of cost savings in the larger group within the next five years.

In the summer BA, American Airlines and Iberia received approval from the EC and the US Department of Transportation to merge their operations.

The merger is expected to happen by the end of the year, when BA and Iberia – who are pursuing a full-blown merger – will form International Airlines Group (IAG) which will sit above both airlines.

Walsh will move from his current post to become chief executive of IAG while Antonio Vasquez will move from chairman of Iberia to become chairman of IAG. BA finance director Keith Williams will become the new chief executive of BA.