B.A. / IBERIA EXPANTION PLANS

At a press conference in India this week Willie Walsh indicated that with immediate affect the group will start to develope in size and in world coverage. He said that they had a list of twelve airlines all of whom they have spoken with and a number are ready to move now to become part of this large consortium.

He indicated that there would be LCC's within this group and there would also be front line National carriers. When pressed for names he would not commit but said announcements would be made soon.

Could this be an alliance within an alliance or is it something greater.

Watch this space. I think TP could be on their list as of their routes to Latin Amercica. IB also have a good Latin American routes. So maybe this could be an option.

captain bill:
Yes, I hv read about it earlier this wk. It's incredible that the original draft <wish list> consists of 40candidates<U can start a whole new global alliance with so many airlines...>:
http://www.flightglobal.com/articles/2010/09/06/347012/ba-iberia-group-draws-up-wish-list-of-12-other-members.html

Though due to foreign ownership limit regulation around the world/outside EU, I expect ICAG<Int'l Consolidated Airlines Group> @ most can only hv partial ownership<Typically just below 50% or less> in each prospective non-EU foreign member airline. That kinda ownership structure will be very interesting fm a Corp control authority perspective, e.g., CEO of ICAG/BA+IB can't over-ride individual airline's strategy/op mgmt decisions. This is unlike the mega-mergers happening elsewhere.

speedbird9468:
Interesting speculation there re TP joining ICAG founded by BA+IB and therefore most likely OneWorld too by extension....that will be a huge wild card+big change as TP has been a full member of Star since 05 and BA+IB hv always been OneWorld:
http://www.staralliance.com/en/about/airlines/tap-portugal/

Your right FLX. And, if I'm not mistaken TP are still GOVT owned. It was something that went through my brain as their Brazilian routes are very extensive. Almost flying to every major city in Brazil with what I understand with good load factors. Everytime I fly to REC via LHR-LIS and return the A330 is at least 90% full.

South and Central America and parts of Africa have never attracted the full attention of British companies, compared to our traditional world markets, based on common language, colonial connections and the ease with which business can be done. I hope that the BA Alliance with IB will already have encouraged more UK companies to seek business along Iberia's considerable route system in developing regions of the world.

The addition of TP to the alliance would be a further stage in coaxing UK businesses to expand their activities in unfamiliar territories, away, at least in part, from existing world markets, many of which are economically flat.

Clearly there is already good trade between the UK and Brazil, for example, but I am sure there is considerable untapped potential to be exploited (sorry - can't think of a better word) if our business agents would learn to speak Spanish or Portuguese and get out there and make some friends and maybe some money as well.

What other competitors are there aside fm TAP on the EU-REC route? I suspect not that many<I could be wrong>....a classic mkt competitive scenario where load factor and perhaps even yield just can't be low. On a per flight basis, I won't be surprised if LIS-REC returns better profit margin<%-wise> than any single flight of the biggest intercon mkt in the world: JFK/EWR-LHR.

If TP has been achieving 90% avg load factor with 330s on LIS-REC consistently during, say, the last 2-3yrs in the midst of a major global air travel downturn, that effectively means TAP has been losing potential Rev$ during peaks. It's definitely time for TAP to consider to do BOTH of the followings:
Short-term: More frequency via leasing more 330s<Relatively expensive lease rate but possible to put in place in a yr or less>
Long-term: A modest up-gauging to @ least 77W or 346. If 77W, forget about leasing<None will be available in mkt for yrs> and order the type immediately so 1st delivery can occur in 2.5-3yrs. If 346, leasing or buying used is easily available in the mkt today and either way, it'll be relatively much cheaper than 77W. 346 op cost will be significantly higher than 77W but that's probably ok if yield+load factor on that route remain high.

FLX:

As TP is wholly owned by the Government of Portugal and the economic state of the nation is not good, to coin a phrase, the chances of your recommendations being taken up are amost nil. Good suggestion but the wrong time perhaps.

I was working on the line that IB have extensive latin Amercan connections. and it could have worked in BA's/IB's favour to have maybe a better one.

FLX. As for competition on the route Lets not forget TP also fly into Natal about a 3.5 hour drive from REC. A long way here in the EU yes. But there its the neighbour. As for other airlines going to REC there are year round charters by Livingstone A330, a scandanavian company using an A321. Condor 767-300 (LH sister) and the TUI group fly there. You can book these as a flight only and may not get the same service as TP. And if its price then its the much cheaper. JJ go to Paris. In addition these flights are weekly. TP is everyday and from contacts i have there the loads are at least 90%.

Many of the PAX got to LIS to be connected to other destinations througout Europe. and, when I left there last year IB was pushing for trade.

This was only an example.

Lest not forget at the moment although we are all having a downturn. Brazil is certainly doing very well. Oil being found new refinaries popping up etc etc. And what with the olympics and world cup soon certainly to draw tourists before and after.

http://www.reuters.com/article/idUSTRE6871NB20100908

interesting

Interesting article