Iberia - Ba: Marriage Of Equals

摘要

Despite Spain being one of the worst performing European economies in this current downturn, Iberia, of all the European airlines may be in one of the best positions, and worthy of an equal share in a merger with British Airways.rnThe transformation in the operations of the company has been remarkable over the past decade. Formerly heavily dependent on short haul and domestic traffic, with very little in the way of valuable long-haul operations and a disparate and aged multi-type fleet structure, it now generates more than half of its revenues from a lucrative niche long-haul operation on the South Atlantic. It links efficiently into the Hispanic markets in South America with a leading market position. The fleet now consists of only two aircraft types - the A330/340 and the A320 families. It has withdrawn from the highly competitive market to and within Spain that avoids its home base at Madrid (or at least passed those routes on to its affiliate LCC Clickair/Vueling), and helped by the new runways and terminal has been able to create a true network hub at its base in Barajas.rnThrough all this it has maintained an unusually cash oriented financial strategy -rnwith the majority of aircraft off-balance sheet through leases or synthetic leases -and enters this downturn with cash balances of €2.3bn (excluding its stake in BA), equivalent to over 40% of revenues, and an enviable on-balance sheet net cash of €1.5bn.rnMany airlines come up with imaginative names for their usual medium-term restructuring plans as if they glitzily need to sell them to their stakeholders. Iberia more staidly refers to its target plans as the "Director Plan". The last one was created for the period 2006-2008 and could be termed a success.