Maybe some airline
acquisition deals are just not meant to be.
And they can still
have a pleasing outcome.
Within a matter of
hours late last week, the ownership group for British Airways -- International
Consolidated Airlines Group (IAG) – said it had scrapped a deal to acquire
fellow European carrier Air Europa, and saw its stock price rise by five
percent the next day. BA also announced a dividend for shareholders, their
first since
the COVID era.
IAG also owns Iberia
Airlines and Aer Lingus. It had been trying for a year to attain the remaining
shares in air Europa that it did not already own but European Union regulators
raised concerns about competition.
Chief executive
Luis Gallego said: “We see continuing strong demand for travel in the
attractive core markets in which we operate: North Atlantic, Latin America and
intra-Europe. We are pleased to announce a return to paying a dividend, which
reflects our confidence in the business, our performance and our
transformation. We are delivering on our strategy and our commitment to
sustainable shareholder returns.”
Mark Crouch, analyst
at eToro, said: “British Airways owner IAG has maintained a steady flight path
in 2024, with the international carrier faring considerably better than its
national counterparts. Long-haul travel has held up well with robust demand for
air travel fueling increased free cash flow, boosting shareholder returns as a
result. While profits were down a touch from last year, the company’s balance
sheet is in a far healthier state.”
British Airways is
still
considering an agreement to partner with JetBlue.
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