BA-Iberia merger “first step” – Tams

The merger of BA and Iberia is the “first step to something much bigger”, Richard Tams, the UK carrier’s head of sales and marketing UK and Ireland, said today (May 7).

Tams, speaking at the Advantage Conference in Madrid, said the new International Airline Group, formed by the two carriers, was “creating a platform for greater consolidation.”

He said the airlines’ two networks complemented each other with the Spanish carrier being strong in South America and BA prominent on the North Atlantic route, Africa and Asia.

Angel Valdemoros Llorens, Iberia’s senior vp for international sales, said the merger was both what the customer wanted and what he needed.

“It is the perfect marriage born of convenience and of substance. We now have an extremely comprehensive network,” he said.

When asked when the two carriers were going to turnaround their losses, Tams said that there were risks but added: “If we produce something of value for our customers, for example on the North Atlantic and South American routes, we could add a lot of value.

“There are no true global airlines in the world, unlike the telecoms and pharmaceutical industries. The airline business is quite behind the times on that. But this is a long term goal. It is a piece of the jigsaw which will allow us into more markets and help our corporate clients whose businesses are globalised.”

Valdemoros said that Iberia had been profitable for 15 years before the recession and he expected synergies between the two airlines to produce savings of €400m in the next five years.

Both agreed that with the restrictions on expansion at London Heathrow Airport, Madrid’s Barajas Airport, with its new Terminal Four, could become more important to the two carriers.

“Madrid Airport is one of our biggest assets and we will take advantage of that,” Valdemoros said.

Tams hit out at the decision of the UK coalition government to scrap plans for a third runway at Heathrow.

He said airlines needed transfer passengers who passed through the UK but did not stop in the country because they enabled carriers to sustain frequency on routes.

He said to say they were not needed for the economy because they did not stop and spend was a “simplistic approach.”

“The coalition government may think again on Heathrow but am I holding my breath? I don’t think so,” he said.

“We are still lobbying for extra capacity. Maybe one day commonsense will prevail.”

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