International Airlines Group: Future targets

The name International Airlines Group, holding company for both British Airways and Iberia and managed by BA’s Willie Walsh, couldn’t have a more appropriate name.  Or more bland.  But that is the stated purpose since IAG is about managing brands across the world rather than conquering the world with one brand.

That kind of makes other airlines and industry watchers wonder who the next target is.   Many considered QANTAS a target but that almost seems illogical to me despite the close ties between QANTAS and BA.  It doesn’t get them much more in QANTAS’ part of the world.  But it is true that it is a strong brand.

Instead, I think IAG is looking for strong brands in parts of the world that they want more access to.   I think that means Asia and I think that means North America.  Those are the two centers of commerce that Europe does business with and adding a brand in each of those areas only helps grow the business. 

The challenge is adding a brand from another country because most countries still have laws governing ownership of their airlines.  So that, to me, means targeting brands in countries with liberal, commerce centered laws and/or in British Commonwealth nations. 

It’s the Cathay Pacifics, Air Canadas and Air New Zealands that would, to me, appear to be more attractive on a global basis.  Strong brands with strong customer loyalty. 

It won’t be about access to facilities or fleets.  It’ll be about identify brand strength with a service product that harmonizes reasonably well with IAGs current brands.  It will be about getting strong executives who’ve crafted strong business plans for their regions.  It won’t be about getting a firesale price on airline because, frankly, those airlines have nothing to offer but a few assets and assets are easy to buy.

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