Despite playing a key role in European airline consolidation over the last few years, it seems IAG's arch dealmaker Willie Walsh is now happy to sit back and let others fight it out.
International Airlines Group, the parent company of British Airways and Iberia, isn’t going to take part in the bidding battle for Thomas Cook’s airline operations.
Despite buying up a number of airlines in recent years and taking a serious look at Norwegian, CEO Willie Walsh distanced himself from getting involved with anything else at the moment.
“We’re very clear, we think consolidation will continue to benefit the industry in Europe. We’re pleased with the activity that has taken place and we’re pleased that a number of our competitors are actively pursuing further consolidations,” Walsh said on an earnings call on Friday.
“I can reaffirm that we’re not actively considering anything at this stage. We don’t normally comment on rumors and speculation but in relation to Thomas Cook, we’re not looking to do anything…”
So far Lufthansa is the only airline to come out publicly and say it is interested in a deal. The German group’s primary target is Thomas Cook’s Condor unit but it could bid for the rest.
The UK’s Sky News reported that Virgin Atlantic was interested in buying Thomas Cook’s long-haul operations out of the UK.
“We’ve been clear if there is an opportunity, we are well positioned but we don’t see anything that we would consider to be attractive or that would make sense to us. That’s not to say it doesn’t necessarily make sense to others but it certainly doesn’t make sense to us at the moment,” Walsh said.
Any chance of IAG resurrecting its interest in Norwegian, looks remote, even at its attractive share price.
“We’re not looking at it and we’re not intending to do anything,” Walsh said.
IAG is still in the black but its profitability was drastically reduced. Its operating profit fell 86 percent to $152 million (€135 million) but this is a slightly misleading comparison because of a one-off pension-related item that was included the 2018’s figures. Stripping this out means operating profit in the first-quarter of 2019 fell by 60 percent.
Total revenue in the quarter rose 5.9 percent to $6 billion (€5.3 billion).
“In a quarter when European airlines were significantly affected by fuel and foreign exchange headwinds, market capacity impacting yield and the timing of Easter, we remained profitable,” Walsh said.
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Photo credit: A British Airways A380 flying over the cliffs at Dover. BA parent company IAG isn't interested in buying any other airlines at the moment. Neil Frazer / Skift