MIAMI – In the aftermath of COVID-19, the former chief executive of both British Airways (BA) and its parent company, International Airlines Group (IAG), has suggested that the British flag carrier may be carved out from the group.
Willie Walsh told the Sunday Telegraph that BA may be sold off to make the group, which also owns Iberia (IB), Aer Lingus (EI), and Vueling (VY), leaner or to comply with EU ownership regulations.
“There’s nothing preventing parts of IAG from being sold or cut loose,” Walsh added. “When I was there, it was always my mindset. You may get rid of a component of the business if it wasn’t operating well, or if it didn’t make sense. I don’t believe it will happen,” Walsh concluded, “but it could.”
Although IAG is FTSE-listed, it is a company registered in Madrid, and its top three senior executives are Spanish. IAG was formed in 2011 when British Airways and Spain’s Iberia merged.
Losses amid COVID-19
Walsh echoes former Easyjet (U2), Ryanair (FR), and Jet2.com (LS) rivals, which have blasted the Government’s strict controls on arrivals into the UK from ostensibly secure holiday spots like Portugal.
The Global Travel Taskforce was supposed to be a collaborative industry-government initiative that would use infection, testing, and vaccine data to provide clear standards for resuming travel. However, the aviation industry has expressed dissatisfaction with the process.
Since the onset of the COVID-19 pandemic, IAG has lost £9.6bn (US$13.55bn), equivalent to two-thirds of its market capitalization.
The British carrier, which has been crippled by the drop in flights to and from the US and other long-haul routes since the beginning of the pandemic, accounts for two-thirds of IAG’s revenue and profit.
Featured image: British Airways Boeing 777 departing LHR Photo: Milan Witham / Airways