British Airways owner International Consolidated Airlines Group SA could attempt to buy rivals easyJet PLC and Portugese state-owned flag carrier TAP Air Portugal, the Times reported on Monday.
The potential acquisitions are part of IAG’s renewed plans to consolidate the European airline industry, the newspaper said.
Last week, according to the Times, IAG Chief Executive Luis Gallego said: ‘We are a platform for consolidation. We will only do what makes sense, but we see there are opportunities to be stronger. We are a group that wants to consolidate the industry.’
Regarding easyJet, a takeover-blocking stake in the airline held by the Haji-Ioannou family had been removed in September as their shares fell to 15% from 16%, The Times reported last month. This was following easyJet’s issuance of new shares for around £1.2 billion.
https://www.thetimes.co.uk/article/british-airways-owner-iag-looks-to-snap-up-rivals-as-easyjet-falters-vxqb9tx89
IAG last Friday published its third-quarter results to September 30, swinging to a pretax profit of €1.01 billion from a loss of €714 million a year prior. Revenue nearly tripled year-on-year to €7.32 billion from €2.71 billion.
Two weeks ago, easyJet said it expects its headline pretax loss to narrow sharply.
The airline expects to report a headline pretax loss in the range of £170 million to £190 million for its financial year that ended September 30, narrowed from a pretax loss of £1.14 billion the year prior.
easyJet explained that the loss in the recent year includes a £64 million foreign exchange loss from balance sheet revaluations and incremental disruption costs of £75 million, mainly from operational issues experienced across the industry in its third quarter.
AJ Bell’s investment director Russ Mould said: ‘Reports that easyJet could be a takeover target for International Consolidated Airlines make perfect sense.
‘The pandemic has created concerns about the future of business travel, with companies globally realising they don’t need to hold so many meetings in different locations. It’s far easier, cheaper and more environmentally friendly to hold many conversations over Teams or Zoom than get on a plane. Therefore, companies like International Consolidated Airlines need to rethink their future sources of revenue as they may find that business travel doesn’t match pre-Covid levels.’
Regarding TAP, aviation media outlet AviationSource on September 12 reported that Portugal’s government in September said it wants to sell its ailing flag carrier airline during the first half of 2023, following multi-billion euro bailouts for a total of around €3.0 billion between 2020 and 2022.
The company was re-nationalised by a new government led by Prime Minister Antonio Costa in 2016 after it was privatised in June 2015 under former prime minister Pedro Coelho. The planned re-privatisation is also under Costa, who has led Portugal’s government since November 2015.
IAG already owns Spain’s Iberia and Vueling and Ireland’s Aer Lingus.
International Consolidated Airlines shares were up 4.1% at 120.04 pence each on Monday morning in London, while easyJet shares rose 6.8% to 350.80p each.
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