International Consolidated Airlines Group, S.A., often shortened to IAG, is an Anglo-Spanish multinational airline holding company with its registered office in Madrid, Spain and its operational headquarters in London, England. It was formed in January 2011 after a merger agreement between British Airways and Iberia, the flag carrier airlines of the United Kingdom and Spain respectively. As British Airways was the larger company, those holding shares in British Airways at the time of the merger were given 55% of the shares in the new, merged company. British Airways and Iberia ceased to be independent companies and instead became 100% owned subsidiaries of IAG. It is the sixth-largest airline company in the world, producing EUR22.972 billion revenue in 2017. The company is listed on the London Stock Exchange and the Madrid Stock Exchange. It is a constituent of the FTSE 100 Index and IBEX 35 Index.
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History
British Airways and Iberia signed a preliminary merger agreement in November 2009. In April 2010, British Airways and Iberia signed a full merger agreement, with an intended completion date of late 2010, subject to securing the necessary regulatory approvals. The merger between British Airways and Iberia was completed on 21 January 2011, and shares in the new holding company IAG and began trading in London and Madrid on 24 January.
In March 2011, IAG agreed to purchase eight Airbus A330-300 aircraft and to take options on eight more, to be used for Iberia's longhaul fleet. On 6 October 2011, IAG created Iberia Express, a new low-cost airline to operate short- and medium-haul routes from IAG's Madrid hub and provide transfer feed onto Iberia's longhaul network. Iberia Express began operations on 25 March 2012.
On 4 November 2011, IAG agreed in principle to acquire British Midland International (BMI) from Lufthansa for an undisclosed sum, in a deal which would increase IAG's share of slots at Heathrow airport from 45% to 54%. On 22 December 2011, IAG agreed a binding deal with Lufthansa to acquire BMI for £172.5 million. On 30 March 2012, the purchase of BMI was approved, subject to the condition that the combined group divest itself of 12 daily slots and lease two daily slots at Heathrow airport. The acquisition was completed on 20 April 2012, and the BMI fleet and routes were integrated into the British Airways schedule throughout 2012.
On 8 November 2012 International Consolidated Airlines Group (IAG) made a cash tender offer to buy Vueling, the Spanish low-cost airline based in Barcelona. The offer, was EUR7 per ordinary share of Vueling with the total cost of acquiring the shares anticipated to be EUR113m. It was funded from internal IAG resources. The reported total assets of Vueling as of 30 September 2012 were EUR805m and in the nine months to 30 September 2012 it generated profits before tax of EUR59m. An increased offer of EUR9.25 was accepted by the Vueling board on 9 April 2013 and received majority shareholder approval on 23 April 2013. IAG took control of Vueling on 26 April 2013. In December 2012, IAG completed the merger of the cargo operations of British Airways, BMI and Iberia into a single business unit, IAG Cargo.
In April 2013, IAG confirmed the conversion of options to acquire 18 Boeing 787 Dreamliners into firm orders, in a deal worth around US$4.5 billion. The aircraft are planned to replace some of the British Airways fleet of Boeing 747s between 2017 and 2021. On 16 October 2013, Iberia unveiled a new livery used from the end of November 2013.
At the Farnborough Airshow 2014, IAG converted the options for 20 Airbus A320neo aircraft into firm orders which are currently intended to replace 21 shorthaul British Airways aircraft.
In January 2015, IAG made a bid of £1 billion for Aer Lingus. This was expected to be accepted, after the rejection of two prior bids. In May 2015, the Irish government agreed to sell its stake in Aer Lingus to IAG, as did the Aer Lingus board in late January 2015. The takeover became irreversible on the 18 August 2015.
On 1 March 2015 Stephen Kavanagh was appointed Chief Executive Officer of Aer Lingus, and executive director of the Aer Lingus Board. In October 2015 Rachel Izzard was appointed chief financial officer of Aer Lingus, and also appointed to the Aer Lingus Board of Directors (prior to joining Aer Lingus, Rachel Izzard was Chief Financial Officer at IAG Cargo). In November, 2015 Alex Cruz was named Executive Chairman of British Airways. Steve Gunning was appointed chief financial officer of British Airways.
In April 2016, it was announced that Qatar Airways increased its shareholding of IAG from 9.99% to close to 12%. In May 2016, Qatar Airways increased its shareholding to 15.01%.
In March 2017 it was announced that a new low cost longhaul airline named LEVEL was to start operating from Barcelona in June 2017.
On 29 December 2017, it was announced that IAG bought major parts of defunct Austrian leisure airline Niki including 15 Airbus A321 aircraft and traffic rights in Düsseldorf, Munich, Vienna, Zürich and Palma de Mallorca. It is planned to establish a new Austrian subsidiary of Vueling as a replacement for Niki.
In April 2018, it was reported that IAG was considering a takeover of Norwegian, a low-budget competitor to the group. IAG confirmed the rumor, after having taken a 4.6% stake in Norwegian.
Maps International Airlines Group
Corporate affairs
Overview
IAG's operational headquarters, which controls the management of both its British and Spanish subsidiaries, are at the Waterside building in Harmondsworth, London. IAG is incorporated in Spain as a Sociedad Anónima, where the company board meetings are held, and is domiciled in Spain for tax purposes. IAG has a primary listing on the London Stock Exchange and has been a FTSE 100 constituent since 24 January 2011. It has secondary listings on the Madrid, Barcelona, Bilbao and Valencia stock exchanges, and has been a constituent of the IBEX 35 index since 1 April 2011.
Qatar Airways is a minority shareholder, and held 20.01% of the shares on 29 July 2016.
Divisions, subsidiaries and franchises
The structure of the main operating companies is:
- Aer Lingus
- Aer Lingus Regional (franchise)
- British Airways
- BA CityFlyer
- OpenSkies
- Comair (18% stake)
- SUN-AIR (franchise)
- IAG Cargo (merger between Iberia Cargo and British Airways World Cargo)
- Iberia
- Air Nostrum (franchise, trading as Iberia Regional)
- Iberia Express
- Level
- Vueling
- Avios Group (operates the IAG frequent-flyer programme)
Financial results
Financial results have been as follows:
By 2012 it was reported that British Airways profits had been wiped out by Iberia losses, placing the Spanish airline in a fight for its survival. IAG workers in Madrid reported they believed Iberia to be the 'junior partner' in IAG citing deep concern for the airline.
By 2013 Iberia had lost a billion euros leaving IAG chief executive, Willie Walsh to defend the British Airways-Iberia merger. In May of the same year, Iberia had suffered further losses and IAG's balance sheet was now in deep deficit as Iberia fought low-cost competition and a deep recession. Willie Walsh admitted that perhaps British Airways should have postponed the IAG merger, saying, "If I'd known the Spanish economy was going to deteriorate to the scale that it did, we may have delayed the decision but ultimately I believe the merger is the right thing".
Operations
British Airways, Iberia, Aer Lingus, Vueling and LEVEL operate under their separate brand names. As of 31 December 2016, IAG had a total of 548 aircraft with 172 aircraft on order and in excess of 230 options. The most popular type operated is the Airbus A320 series, with a combined fleet of 227 aircraft. For details of the current aircraft operated by the group, see the fleet details for each of the main operating subsidiaries - Iberia, British Airways, Aer Lingus, and Vueling. The entire company serves around 200 destinations.
Loyalty programme
IAG operates the Avios frequent-flyer programme, which was created from the merger of the Air Miles, BA Miles and Iberia Plus Points schemes on 16 November 2011. Avios points are the frequent flyer currency of Iberia, British Airways, Aer Lingus, LEVEL, Air Italy, and Flybe, and can also be used for travel within the Oneworld alliance. A restructure in 2015 meant that all of IAG's affiliated loyalty programmes which use Avios, including Avios Travel Reward Programme, Iberia Plus and British Airways Executive Club were transferred to Avios Group, an IAG subsidiary.
References
External links
- Official website
Source of the article : Wikipedia