International Airlines Group

International Consolidated Airlines Group, S.A.
Sociedad Anónima
Traded as LSE: IAG
BMAD: IAG
Founded 21 January 2011[1]
Founder British Airways and Iberia
Headquarters
Area served
 Worldwide
Key people
Services
  • Passenger air transport services
  • Air freight services
Revenue €20,170 million (2014)[2]
€1,390 million (2014)[2]
Profit €1,003 million (2014)[2]
Number of employees
 59,484 (2014)[2]
Subsidiaries
Website www.iairgroup.com

International Consolidated Airlines Group, S.A., often shortened to IAG, is a Spanish-British multinational airline holding company based in London, England, UK and with its registered office in Madrid, Spain. It was formed in January 2011 by the merger of British Airways and Iberia, the flag carrier airlines of the United Kingdom and Spain respectively.[3][4] It is the sixth-largest airline company in the world and third-largest based in Europe measured by 2010 revenues.[5]

History

British Airways and Iberia signed a preliminary merger agreement in November 2009.[6][7][8] 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.[9][10] The merger between British Airways and Iberia was completed on 21 January 2011, and shares in IAG began trading in London and Madrid on 24 January.[11][12][13]

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.[14] 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.[15][16] Iberia Express began operations on 25 March 2012.[17][18]

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%.[19][20] On 22 December 2011, IAG agreed a binding deal with Lufthansa to acquire BMI for £172.5 million.[21] 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.[22]

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 €7 per ordinary share of Vueling with the total cost of acquiring the shares anticipated to be €113m. It was funded from internal IAG resources. The reported total assets of Vueling as of 30 September 2012 were €805m and in the nine months to 30 September 2012 it generated profits before tax of €59m. An increased offer of €9.25 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.[23][24] In December 2012, IAG completed the merger of the cargo operations of British Airways, BMI and Iberia into a single business unit, IAG Cargo.[25][26]

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.[27][28] The aircraft are planned to replace some of British Airway's fleet of Boeing 747s between 2017 and 2021.[27] On 16 October 2013, Iberia unveiled a new livery used from the end of November 2013.[29]

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.[30]

In Jan 2015, IAG made an bid of £1 bn. for Aer Lingus. This was expected to be accepted, after the rejection of two prior bids.[31] In May 2015, the Irish government agreed to sell its stake in Aer Lingus to IAG,[32] as did the Aer Lingus board in late January 2015.[33] The takeover became irreversible on the 18th of August. [34]

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).[35] In November, 2015 Alex Cruz was named Executive Chairman of British Airways. Steve Gunning was appointed chief financial officer of British Airways.[36]

Corporate affairs

Overview

IAG is incorporated in Spain as a Sociedad Anónima, its board meetings are held in Madrid and its tax domicile is in Spain.[37][38][39][40] IAG has a primary listing on the London Stock Exchange and has been a FTSE 100 constituent since 24 January 2011.[41] It has secondary listings on the Madrid, Barcelona, Bilbao and Valencia stock exchanges.[42] IAG has its operational headquarters, which controls the management of both its Spanish and British subsidiaries, at 2 World Business Centre on the property of London Heathrow Airport in the London Borough of Hillingdon.[43][44]

IAG has a primary listing on the London Stock Exchange and has been a FTSE 100 constituent since 24 January 2011.[41][45] It has secondary listings on the Madrid, Barcelona, Bilbao and Valencia stock exchanges,[42][46] and has been a constituent of the IBEX 35 index since 1 April 2011.[47]

Divisions, subsidiaries and franchises

Aer Lingus Airbus A330-200
British Airways Boeing 787-8
Iberia Airbus A321-200
Vueling Airbus A320-200

The structure of the main operating companies is:

Previous shareholdings

Major shareholders

Shareholder Holding[53]
Qatar Airways[54] 9.99%
Standard Life Investments Ltd 6.008%
Europacific Growth Fund 5.261%
Capital Research and Management Company 5.049%
BlackRock 3.565%
Legal and General Group plc 3.236%
Lansdowne Partners International Limited 2.191%
Invesco Ltd 1.082%
Lansdowne Developed Markets Master Fund Ltd 1.014%

Financial results

Year Ended Passengers Flown Turnover (€m) Profit/Loss Before Tax (€m) Net Profit/Loss (€m) Basic EPS (€ cents)
31 December 2011 51,687,000 16,339 527 485 31.1
31 December 2012 54,600,000 18,117 (997) (923) (51.0)
31 December 2013 67,224,000 18,675 227 147 6.6
31 December 2014 77,334,000 20,170 828 1,003 48.2

Operations

British Airways, Iberia, Vueling and Aer Lingus operate under their separate brand names.[55] As of 17 January 2014, IAG had a total of 464 aircraft with 150 aircraft on order and in excess of 110 options. The most popular type operated is the Airbus A320 series, with a combined fleet of 226 aircraft.[56] For details of the current aircraft operated by the group, see the fleet details for each of the main operating subsidiaries - British Airways, Iberia, Aer Lingus, and Vueling. The entire and serves around 200 destinations.[55][56] For a list of destinations, refer to the respective lists of destinations of different IAG subsidiaries.

Loyalty programme

IAG operates the Avios loyalty programme, which was renamed from Air Miles on 16 November 2011.[57] Avios points are the frequent flyer currency of British Airways, Iberia 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, British Airways Executive Club and Iberia Plus, came into ownership of Avios Group Ltd.[58]

References

  1. ↑ "IAG Profile". International Airlines Group. Retrieved 1 August 2011.
  2. 1 2 3 4 "IAG Full Year Results 2014" (PDF). International Consolidated Airlines Group. Retrieved 15 March 2015.
  3. ↑ "International Airlines Group formed as BA signs merger with Iberia". IBTimes. 8 April 2010. Retrieved 11 April 2010.
  4. ↑ Vamburkar, Meenal (8 April 2010). "British Airways and Iberia agree on merger". New Statesman. UK. Retrieved 11 April 2010.
  5. ↑ "World Airline Rankings: Regional picture". Flight Global. 22 July 2011. Retrieved 31 July 2011.
  6. ↑ "British Airways, Iberia agree to £4 billion merger". Reuters. 12 November 2009. Retrieved 7 November 2011.
  7. ↑ Osborne, Alistair (13 November 2009). "BA-Iberia £4.4bn merger creates Europe's third-largest airline". London: The Telegraph. Retrieved 7 November 2011.
  8. ↑ "BA and Iberia agree merger deal". BBC News. 12 November 2009. Retrieved 7 November 2011.
  9. ↑ Plummer, Robert (8 April 2010). "BA's Iberia tie-up nears lift-off". BBC News. Retrieved 7 November 2011.
  10. ↑ Osborne, Alistair (9 April 2010). "BA and Iberia sign €5.8bn merger deal". London: The Telegraph. Retrieved 7 November 2011.
  11. ↑ "BA-Iberia Overtakes Air France by Value as IAG Debuts". Bloomberg Businessweek. 24 January 2011. Retrieved 7 November 2011.
  12. ↑ "Deals and strikes loom for IAG after BA-Iberia merger". Reuters. 24 January 2011. Retrieved 7 November 2011.
  13. ↑ "British Airways, Iberia merge effective". The Independent. 22 January 2011. Retrieved 7 November 2011.
  14. ↑ "IAG purchases Airbus planes for Iberia fleet". Bloomberg Businessweek. 7 March 2011. Retrieved 1 August 2011.
  15. ↑ Jones, Rhys (6 October 2011). "IAG sets up short-haul carrier Iberia Express". Reuters. Retrieved 4 November 2011.
  16. ↑ "Iberia to launch low-cost airline". Retrieved 8 October 2011.
  17. ↑ BBC News – Spanish new low-cost airline Iberia Express launched. Bbc.co.uk (2012-03-25). Retrieved on 2012-07-07.
  18. ↑ Iberia Express to launch on Sunday. Business Traveller (2012-03-23). Retrieved on 2012-07-07.
  19. ↑ Jones, Rhys (4 November 2011). "British Airways owner IAG to buy UK's bmi". Reuters. Retrieved 4 November 2011.
  20. ↑ "BMI sold by Lufthansa to British Airways owner IAG". BBC News. 4 November 2011. Retrieved 4 November 2011.
  21. ↑ "British Airways owner IAG buys BMI from Lufthansa". BBC News. 22 December 2011. Retrieved 22 December 2011.
  22. ↑ International Airlines Group completes bmi acquisition. Guardian (2012-04-20). Retrieved on 2012-07-07.
  23. ↑ Julien Toyer (9 April 2013). "Spain's Vueling accepts takeover bid from IAG". Reuters. Retrieved 12 April 2013.
  24. ↑ "IAG ups bid for budget airline Vueling by one third". Reuters. 22 April 2013. Retrieved 23 April 2013.
  25. ↑ "IAG Cargo launched as cargo brand for BA and Iberia". Logistics Manager. 3 December 2012. Retrieved 12 October 2013.
  26. ↑ "IAG Cargo launches brand". Air Cargo News. 5 December 2012. Retrieved 12 October 2013.
  27. 1 2 "IAG and Boeing agree $4bn Dreamliner deal". The Guardian. 3 April 2013. Retrieved 12 October 2013.
  28. ↑ "IAG orders 18 Dreamliner jets from Boeing despite safety tests". The Independent. 4 April 2013. Retrieved 12 October 2013.
  29. ↑ "Iberia unveils new colour scheme". 15 October 2013. Retrieved 10 March 2014.
  30. ↑ "Airbus @ Farnborough airshow 2014". airbus.com. Retrieved 15 March 2015.
  31. ↑ Wall, Robert (January 26, 2015). "British Airways Parent IAG Moves a Step Closer to Buying Aer Lingus". The Wall Street Journal. Retrieved 26 January 2015.
  32. ↑ "Ireland to sell Aer Lingus stake to IAG". BBC News. 2015-05-26. Retrieved 2015-05-27.
  33. ↑ Molloy, Antonia (2015-01-27). "Aer Lingus board backs takeover offer from BA owner IAG". The Independent. Retrieved 2015-05-27.
  34. ↑ "Aer Lingus joins IAG as shareholders approve deal". The Irish Times. 2015-08-18. Retrieved 2015-08-23.
  35. ↑ https://intranet.aerlingus.com:8450/web/Portal/My%20Aer%20Lingus/Our%20Airline/Our%20Directors
  36. ↑ Musah, Razak. "IAG raises financial targets, changes management". Market Watch. Retrieved 6 November 2015.
  37. ↑ Arnott, Sarah (9 April 2010). "BA and Iberia Sign Merger Deal, at Last". BusinessWeek. Retrieved 11 April 2010.
  38. ↑ Noakes, Gary (8 April 2010). "BA eyes Madrid expansion". Air & Business Travel News. Retrieved 11 April 2010.
  39. ↑ Wardell, Jane (8 April 2010). "British Airways and Iberia sign merger deal to create one of world's biggest airline groups". Yahoo! Finance. Retrieved 11 April 2010.
  40. ↑ Otero, Lara (9 April 2010). "Iberia y British firman su fusión como primer paso para nuevas uniones" (in Spanish). elpais.com. Retrieved 11 April 2010.
  41. 1 2 British Airways name will disappear from FTSE if Iberia merger goes ahead | Business. The Guardian (2010-04-08). Retrieved on 2012-07-07.
  42. 1 2 "IAG shares begin trading, replacing BA and Iberia". BBC News. 24 January 2011. Retrieved 24 January 2011.
  43. ↑ "Contact." International Airlines Group. Retrieved on 29 January 2011. "Postal address International Airlines Group 2 World Business Centre Heathrow, Newall Road, London Heathrow Airport, HOUNSLOW, TW6 2SF"
  44. ↑ "About Us." International Airlines Group. Retrieved on 29 January 2011. "The corporate head office for IAG is in London, UK."
  45. ↑ "BA Iberia merger gets approval from shareholders". BBC News. 29 November 2010.
  46. ↑ "British Airways stands firm over crew dispute". Reuters. 13 July 2010. Retrieved 18 August 2010.
  47. ↑ "Results of the quarterly follow up meeting of the Technical Advisory Committee of the IBEX® Indices" (PDF). Sociedad de Bolsas. 8 March 2011. Retrieved 7 May 2011.
  48. ↑ Newenham, Pamela (2 September 2015). "IAG formally takes control of Aer Lingus". The Irish Times. Retrieved 4 September 2015.
  49. ↑ "IAG - International Airlines Group - News Release". iagshares.com. Retrieved 15 March 2015.
  50. ↑ "Shareholders Major AMADF Amadeus IT Holding SA including Fund and Institutional". morningstar.com.
  51. ↑ "UPDATE 1-Iberia sells Amadeus stake to Nomura for 578 million euros". Reuters.
  52. ↑ Robert Wall (20 June 2014). "British Airways Parent IAG Sells Flybe Stake". WSJ.
  53. ↑ "Significant shareholdings". IAG Group. Retrieved 2014-01-23.
  54. ↑ "Qatar Airways buys 10% stake in BA-owner IAG". Financial Times. Retrieved 15 March 2015.
  55. 1 2 "British Airways and Iberia sign merger agreement". BBC News. 8 April 2010. Retrieved 8 April 2010.
  56. 1 2 "Fleet/Product". International Airlines Group. 30 June 2012. Retrieved 17 Jan 2014.
  57. ↑ Patrick Burgoyne (2 September 2011). "AirMiles says adios, returns as Avios". Creative Review.
  58. ↑ "Helping Avios analyse huge data sets to boost transparency and growth". PwC. Retrieved 2015-12-09.

External links

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