British Airways (BA) has confirmed that it is part of a consortium looking at bidding for Spanish airline Iberia.
British Airways will join forces with the US private equity firm Texas Pacific Group (TPG) in a bid for Spain's leading airline Iberia, the carrier announced Tuesday in London. Spanish reports said the bidding consortium would also include the Spanish funds Vista Capital, Inversiones Ibersuizas and Quercus Equity. But BA added in its statement that there was "no guarantee that a formal bid will be made" for Iberia. TPG had already announced a possible offer worth about €3.6 billion ($4.8 billion). British Airways already holds a 10% stake in Iberia. Iberia is Europe's fourth largest airline, with lucrative routes to South America. Spanish investors were to control at least 51% of the formerly state-owned airline, which has traditionally been strong in Latin America.
Revenues at Iberia, which employs 25,000 people, were up 10% last year - but profits fell 64%. Consolidation in the airline industry is expected to continue as the "open skies" agreement between the US and Europe willl allow more budget airlines to fly across the Atlantic. (bbc.news, monstersandcritics.com)