Company Watch - British Airways.

Oct 1, 2007

Oneworld partners British Airways and American Airlines will not file for antitrust immunity under the new U.S.-European Union open skies deal, British Airways CEO Willie Walsh said. "We're not doing anything to pursue antitrust with American," Walsh said. "We don't see that the agreement has changed [the situation] to a degree that would give us confidence that applying for antitrust immunity would be successful." Sep 27, 2007

British Airways Ditches 747 For Airbus A380. British Airways ended decades of loyalty to Boeing's 747 jumbo with a switch to Airbus's new A380 superjumbo. Making one of the most anticipated long-haul aircraft order announcements in recent years, British Airways said it will purchase 12 A380s and 24 787s and place options for a further seven A380s and 18 787s. The order is worth up to USD$8.2 billion. Sep 28, 2007

British Airways plans to announce about $8 billion in orders for new aircraft to replace 34 aging Boeing 747-400 jets. The carrier is traditionally a Boeing customer, but has been considering the Airbus A330, A350 and the A380 superjumbo, as well as the Boeing 787 Dreamliner and the 747-800. "We believe there is an opportunity for us to accelerate the improvements that have already been made in terms of noise and local air quality and the overall emissions of our operation," British Airways CEO Willie Walsh said of the airline's fleet renewal program. Environmental concerns, he said, "have definitely taken a much more important position in our considerations this time around than ever before." Sep 26, 2007

British Airways CEO Walsh's comments come at a particularly crucial time for the carrier, as it prepares to ink one of its most important ever long-haul aircraft orders in a matter of days. "I said that we would announce (the deal) from two weeks Sept. 19 and we are within that time frame," he said, adding: "We are getting very close to finalising it." Part of the reason British Airways is so confident about putting pen to paper is that the industrial landscape looks relatively benign, after a volatile period that has seen potential conflict with its unions avoided. Sep 25, 2007

British Airways firms up New York plans. British Air CEO, Willie Walsh, is refuting claims that the carrier will launch business class only services next year. The dedicated sector has seen a burst of activity of late, with several carriers either announcing plans or making noises about dedicated premium transatlantic services, but British Airways says it will not be one of them, although it will launch New York-Europe services. Speaking at the Routes Leaders Forum in Stockholm on Sept. 24, Walsh said: "There may have been speculation that we would have an all premium configuration, but we don't see a market for business-only from the US to Europe. We will have a significant Club World cabin with flat beds." Sep 25, 2007

British Airways flag carrier intends to base aircraft out of New York to Europe following the evolution of the Open Skies deal between the European Union and the US next year, using two aircraft from its 13-strong Boeing 757 fleet that currently operate short-haul routes. With London being twice the size of the business market from Paris for example, Walsh saw no need to have a European-based operation - unlike arch-rival Virgin Atlantic that has previously said it intends to operate a premium-only product from Europe to the US. "It's an exciting opportunity for us and we expect to be flying next summer although we have not finalized the European destinations yet," said Walsh, adding: "We will probably decide by mid-November." Sep 25, 2007

The British Airways pension fund deficit issue, put at [pounds sterling]2.1bn, has now apparently been put to bed, allowing the carrier to concentrate on its vital fleet renewal plans. "The resolution of the pensions deficit was a major move," said CEO Walsh, adding: "It was a trigger event to allow us to go forward." Sep 25, 2007

British Airways Chief Executive Willie Walsh told reporters the airline would use the superjumbo to make best use of its limited take-off slots at London's crowded Heathrow Airport. He denied the company had experienced political pressure to buy the superjumbo, the wings and engines of which will be built in Britain. The Airbus A380 is the biggest airliner in production, and its first delivery due next month, to Singapore Airlines, comes after wiring troubles triggered a costly two-year delay and management upheaval at Airbus. The double-decker has a maximum seating capacity of 853 passengers, though most airlines plan to use configurations of fewer than 650, which is still a jump from Boeing's jumbo, which British Airways currently flies with a maximum of 351 seats. Sep 27, 2007

Analysts said British Airways had probably received significant discounts as Boeing and Airbus battled for the high-profile orders. "With the A380 likely to have been heavily discounted, and a reasonable discount on 24 787s also applied, we'd estimate the real value of the order at around GBP3 billion pounds (USD$6 billion)," said analyst Andrew Fitchie at Collins Stewart. Walsh declined to discuss discounts, which are common in the industry, but said: "I'm very pleased with the way Boeing and Airbus approached this." British Air has arranged for a group of banks to provide USD$1.5 billion of debt financing to cover its firm orders to the end of 2011. Sep 27, 2007

British Airways ended decades of loyalty to Boeing's 747 jumbo with a switch to Airbus's new A380 superjumbo on Thursday as it announced a mixed plane order worth up to USD$8.2 billion. The order for 12 superjumbos from Airbus and 24 787 Dreamliners from Boeing will replace 34 of the airline's older long-haul planes. British Airways took delivery of its first jumbo on April 22, 1970, becoming just the fifth airline to get one. "It's an excellent boost for UK manufacturing, with Airbus and Rolls-Royce plants benefiting," said Tony Woodley of Britain's biggest union, Unite. "This order will secure many thousands of jobs." Sep 27, 2007

British Airways said it was considering aircraft to replace a further 37 Boeing 747s and is examining the Boeing 777-300 ER, the Airbus A350XWB, as well as a stretched version of Boeing's 787, the 787-10, which the planemaker has yet to launch. "This puts big pressure on Boeing to actually launch the 787-10," said one London-based brokerage analyst. Another said that while Airbus had scored a major victory in selling the superjumbo to British, it had missed a key opportunity to secure a deal for its newest plane, the A350 XWB, and selling it to British Air would remain a priority for the planemaker. Sep 27, 2007

The British Airways superjumbo will fly on routes from London to Hong Kong, Singapore, South Africa and the west coast of the United States. The 24 mid-sized 787 Dreamliners, a model whose rapid sales have revived Boeing's fortunes, will be used to open up new routes and increase the frequency of flights on existing ones. The 787 breaks new ground with a fuselage made of light-weight carbon composite, and is due to enter service next year. The two types of new aircraft will be delivered between 2010 and 2014, and British said it had also taken options for a further seven Airbus superjumbos and 18 of Boeing's Dreamliners. Sep 27, 2007

British Airways has revealed its Airbus A380 long-haul routes and delivery dates, following today[sup.1]s long-awaited Airbus A380 and Boeing 787 order. The Oneworld carrier has ordered 12 Airbus A380s and 24 Boeing 787s, with options on seven more A380s and 18 more 787s. British Airways[sup.1]s first 787 will arrive in 2010, followed by its first A380 in 2012. Both types will be Rolls-Royce powered. British Air[sup.1]s long-haul fleet comprises 57 Boeing 747-400s, 43 Boeing 777s and 14 Boeing 767s. The new aircraft will replace 20 of the 747-400s and 14 of its 767s. Although the spokeswoman says that the configuration and network for the A380s and 787s is yet to be detailed, she lists Los Angeles, San Francisco, Singapore, Hong Kong as destinations for the new aircraft type. Sep 27, 2007

TPG and British Airways Bid For Iberia Seen Late October. A formal bid for Iberia is likely to be made towards the end of next month as US private equity firm TPG and British Airways look to seal one of Europe's biggest airline takeovers, sources familiar with the deal said on Thursday. Sep 27, 2007

British Airways is just six months away from undertaking one of the industry[sup.1]s biggest ever relocations, when it will shift more than two-thirds of its operations into the new Terminal 5 (T5) at London Heathrow in one night. The UK flag carrier[sup.1]s operations are currently dispersed across Terminals 1, 3 and 4 at Heathrow, and the entire move, which is structured in four phases over a six month period beginning in March, will ultimate see over 90% of services relocated to the new facility. The remaining 8% of flights will be co-located with other Oneworld carriers operating from T3. BA will undertake the bulk of it on the 26/27 March next year when the infrastructure to support 70% of all its Heathrow flights will move during the night what the airline describes as [sup.3]4h mass convey[sup.2]. During this time, one of Heathrow[sup.1]s two runways will be closed to enable trucks and staff to move almost the entire T1 operation and all T4 short-haul flights, as well as the exis Sep 28, 2007

Bid For Iberia Seen Late October. A formal bid for Iberia is likely to be made towards the end of next month as US private equity firm TPG and British Airways look to seal one of Europe's biggest airline takeovers, sources familiar with the deal said on Sept. 27. The consortium, which also includes two Spanish partners, finished due diligence checks on the company in early September and has invited banks to join the financing, the sources said. Sep 28, 2007

Despite a global credit crunch jamming up leveraged buyout deals all over the world, financing for the acquisition of Iberia is progressing smoothly, the sources said, although it may have some impact on the price. The TPG and British Airways consortium submitted an indicative offer of 3.60 euros (USD$5.10) per share in March, valuing the airline at around EUR3.4 billion, but concerns over global credit and the airline's initial reluctance to open its books has kept Iberia's stock below the approach price since July 26. Sep 28, 2007

The biggest risk in cutting the Iberia bid value for the TPG and British Airways consortium would be a counter-offer from Air France-KLM, which has never ruled out being interested in the airline. A Spanish media report on Sept. 26 said it was preparing for a bid. British Airways chief executive Willie Walsh said on sept. 27 he was "pleased" at the way due diligence had gone after the group spent over a month looking over the books in Madrid. Sep 28, 2007

The TPG and British Airways consortium was denied access to detailed information on the profitability of Iberia's key routes, because its rival, British Air would see them. But if they fail to get a clear picture, the group may hold off making an outright bid and instead ask for more information, one of the sources close to the deal said. Alternatively the group could announce a bid price range and wait to fix the exact price until after it has seen further information on profitability. The source added that the outlook for Madrid-Barcelona flights, the world's busiest route, was key as a high-speed rail link between the two starts late this year. Sep 28, 2007

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