BA, Iberia Plan Highlights Asian Airline Prey
BA, Iberia Plan Highlights Asian Airline Prey
The acquisition plan outlined by British Airways and Iberia aims to land in Asia, with several viable companies waiting at the end of the runway. BA and Iberia have earmarked Asia as a key region for expansion once their own merger completes, though restrictions on foreign investment could narrow their range of acquisition targets.
There was a time not so long ago when that target list would have been thin. But the airline industry’s growth across Asia has put forward a strong list of possible candidates. Analysts believe India’s Kingfisher Airlines, with whom BA signed a codesharing agreement earlier this week, would be BA’s prime target along with Australia’s Qantas.
They also view Chinese carriers Air China, China Southern and China Eastern as willing recipients of foreign investment. BA’s chief executive Willie Walsh said earlier this week that BA and Iberia -- whose merger will create the world’s third-largest airline by revenue and be called International Airlines Group -- had compiled a list of 12 potential targets.
While Asia’s fast-growing economies are an attractive place to invest right now, obstacles do exist, particularly when it comes to dealing with local governments. India does not currently allow foreign airlines to buy stakes in local carriers, while in China a single overseas investor is unable to take more than a 25 percent stake in a Chinese carrier.
