11 February 2015

Business airlines

That "La Compagnie" is starting business only flights from London to New York (Newark) as reported in Business Traveller (3-2-15) can only be welcomed. The business traveller might well ask why he/she cannot get that bit extra exclusivity when paying that (large) extra on a trip.

 "La Compagnie launches all-business London-New York flights" (Buying Business Travel 3-2-15)

 "French airline offers 'business class at Ryanair prices' as it slashes £1,000 off its flights from London to New York"   (Mailonline 4-2-15)
 "French firm starts 'budget business' class flights from London to New York" (London Evening Standard 4-2-15)

The previously failed experiences of "Eos, Silverjet, and Maxjet" makes one think that the concept was wrong. However, this begs the question. Those airlines tried to survive, unsuccessfully, during the biggest economic downturn in 80 years.

On the other hand British Airways, firstly, founded "Open Skies" and then took over "L´Avion" to fly from Paris Orly to New York. This has proved an moderate success. It changed its name unnecessarily  and then floundered to find the product it wants to present - which is still the case.

Obviously, the founders of "L´Avion" were bought out with the condition of not setting up any sort of competition for a certain period. That period will have finished since now, of the top six executives in La Compagnie four have previously worked in L ´Avion and/or Open Skies

Now we have the founders of the original idea, "L´Avion" setting up "La Compagnie". The new company starts flying Paris (CDG) to New York in July 2014. However, such is the confidence by them, and in them by their backers that it now proposes to fly London (Luton) to New York from late April.The frequency will be three times weekly, rising to six times weekly in June and eventually daily by the end of the year.

"Open Skies" still operates from Paris Orly to New York (JFK and Newark) and has not developed since then despite markets existing in Brussels, Amsterdam, Geneva and maybe even in Nice(without thinking about other countries or languages).
It flies B757-200s in two different configurations: a) 114 seats  with 20 Biz Bed(business class seats), 28 Prem Plus (premium economy), and 66 Eco (economy seats), while the second option b) offers 112 seats with 20 Biz Bed, 20 Biz Seat and 72 Eco seats.

To be fair to BA, it has had to accept that its all business flights from London City to New York are not part of the same subsidiary, that operates "Open Skies". This was due to union oposition. As a result, however, both "Open Skies" and the operation from London City operate separately.  This second option was originally operated from London City from 2012 by British Airways (BA) Limited under the brand name Club World London City. However, from 2015 The Club World London City services are being returned to being operated directly by British Airways PLC.

The aircraft leaving London City cannot take on all the fuel necessary to make the transatlantic leap all in one go so provides a stopover on the outward flight at Shannon. This has given them the chance for the passengers to pass througn US Border Controls in Ireland so saving that time on arrival - no small benefit. They, therefore, arrive as domestic passengers and so save a lot of time and avoid the hassle which could be a couple of hours otherwise.The problem of loading weight for the return flight does not exist so the flight is direct New York JFK to London City.
The aircraft used is an  A318 in a 32 seat all business class configuration.

However, the choice of airport for London by La Compagnie makes for thinking. Considering that Heathrow is out of the question (flight slot availability and cost), and Gatwick (the same), then we are left with Stansted and Luton. Stansted might well be the more attractive site due to the supposed higher purchasing power of the potential passengers in the region, but one has to admit that it is stuck out on a limb (near Cambridge - only good if that is your destination). Luton, on the other hand, is well connected by road and rail to London, the Midlands and the North, so the immediate area for captive passengers is not so important. The airport itself might be considered second rate ( it is mostly used for holiday {bucket and spade} flights) but that would be irrelevant if the services provided by the airline on the ground were up to scratch.

However, the airport experience can depend on the airline if it so wishes. The pre-takeoff and post-landing experience are paramount.  A good lounge to relax in, a quick passage into the departure lounge and attention to all sorts of detail can make the experience worthwhile despite Luton not being focused on business passengers.

The ultimate question is if "La Compagnie"has learned the lessons of previous experiences and can apply them  -  I would think them capable of doing so.


The number of other airlines flying all business, or specially configured aircraft with a lower density of seating than most normal flights, is small.
What this blogger has found  is the following  -  at least  in /into Europe

Qatar Airways flies (to Europe) Doha - Heathrow  daily with an A319 in a 40 seat all business class configuration. A second A319 becomes available from 17-2-2015. It flies other routes and offers charter and contract hiring

(c) Lars Steffens
 Privat Air is based in Geneva and  does charter and contract flying. At present it is flying for...
SAS from Stavanger(Norway)  to Houston(Texas)  6 times weekly using a B737 in a 44 seat all business class configuration.
Lufthansa from Frankfurt to Dammam (Saudi Arabia) 3 times weekly and,
on a triangular route from Frankfurt to Pune(India) then to Bucharest and back to Frankfurt 4 times weekly. On both routes a BBJ2 (which is a modified Boeing 737) 
in a configuration of 32 business seats and 60 economy seats. 
ECAir (Equatorial Congo Airlines)based in Brazzaville(the Republic of the Congo).Here Privat Air has operated as the national airline of the country providing domestic and regional routes. Two intercontinental routes were offered from Brazzaville to Paris (4/6 times weekly) and Dubai (3 times weekly) using a B757-200 with 16 business seats and 132 economy seats. Thus it was not strictly an all business airline.

From what we have found there seems to be a very limited "ALL EXCLUSIVE BUSINESS SERVICE" on flights to/from Europe.  The European airlines seem to be concentrating their efforts on the regular long-haul services to the Americas and Asia/Africa - meaning regular flights with good services onboard for the  well-to-do while providing connectivity for the masses from point to point. This is a philosophy whereby the "economy" passengers pay for the basics of the flight while the "business" and "first" classes provide the cream - the profits. 

How this sort of service will develop in the future nobody knows. It is up to "La Compagnie" to show us what can be done. If it fails, that is is the end of all exclusive business flights. If it succeeds then the possibilities are endless. Let us wait and see.

01 February 2015

Heathrow and/or Gatwick - Let´s focus more

After having written a piece called "Heathrow´s 3rd runway - how to focus" in February 2012, it is about time to bring things up to date.

.....  Of course, you can look at these things from a very narrow perspective, or if you prefer you can see a bigger picture which is more illuminating.

The prestigious CAPA Centre for Aviation brings out analysises on a regular basis about different aspects of the airline industry.
In the last year alone, on 19th May 2014 it produced a study on the progress of the arguments in favour of one or another option for new runways titled, "London’s Heathrow and Gatwick airports commence the next phase of Davies Commission runway battle."
On 10th September 2014 this was followed up by another article titled,"Thames Estuary Airport dropped: a milestone reached in the eternal debate on UK airport capacity."

Some specialised periodicals have been publishing articles about the runway expansion debate. Here is a selection from September 2014 to January 2015. Each headline itself  tells a distinct story though each has its own link so that it can be read in its entirety. 

Buying Business Travel:
29th August 2014,         "Heathrow urges Boris to support bid for expansion"
1st September 2014,     "Boris attacks ‘barbaric’ Heathrow third runway plan"
2nd September 2014     " 'Boris Island' airport plan rejected"
9th September 2014,     "Majority of MPs back Heathrow expansion"
19th September 2014,   "Gatwick airport gains public support for expansion"
2nd October 2014,        "Birmingham airport backs Gatwick bid for second runway"
8th October 2014,         "Business leaders criticise Lib Dems for airport expansion stance" 
3rd November 2014,      "Willie Walsh: ‘No business case’ for second runway at Gatwick"
7th November 2014,      "Heathrow warns of losing top airport status" 
11th November 2014,    "Heathrow and Gatwick plans to cost billions more than forecast"
11th November 2014,    "Public back airport expansion in south east, ABTA study finds"
20th November 2014,    "Gatwick warns of 'capacity crunch' after record results" 
1st December 2014,     "Heathrow to extend property compensation scheme"
1st December 2014,     "Regional airport chiefs back Heathrow expansion"
3rd December 2014,     "Heathrow CEO ‘sorry’ over runway promise"
20th January 2015,       "County council opposes second runway at Gatwick"

1st September 2014,     "Address UK air capacity 'ticking time bomb', says CBI"
2nd September 2014,    " Public urged to speak out on airport expansion" 
22nd September 2014"Small businesses 'back expansion of Gatwick' "
30th September 2014,   "Osborne hints at speedy decision on airport capacity"
3rd October 2014,         "Gatwick pushes case for second runway at regional roadshows"
27th October2014,        "Branson accuses politicians of being 'cowardly' over Heathrow"
28th October 2014,       "British business urges backing for Heathrow expansion"
3rd November 2014,      "Potential Conservative party split emerges over Heathrow expansion"
3rd November 2014,      "Environment as important as economic impact of airport expansion, finds YouGov poll"
12th January 2015,       "Heathrow and Gatwick claim record performance in 2014"
19th January 2015,       "Gatwick unveils 'low-risk' two-runway plan"
29th January 2015,       "Abta calls for new runways at both Gatwick and Heathrow"

Flight Global.
21st September 2014,   "Gatwick eyes point-to-point routes for long-haul growth" 

21st January 2015,        "UK Needs Quick Decision On New London Runway"

This blogger thinks it unnecessary to comment on each article. Readers can absorb what is written and come to their own conclusions. Sufficient it is to say that each person, grouping, poltical party or administrative area is pushing its own agenda for its own reasons. They do not necessarily reflect this blogger´s.
The most significant point to note is that mentioned on 12th January about an increase in traffic at both Heathrow (to 73.4 million passengers - up 1.4%) and Gatwick (to 38 million passengers - up 7.6% ) in 2014 compared to 2013. The problem about the need for expansion of capacity will not go away.

Let us look at some truths....

1-There is a big demand for more runway capacity in the South East of England.
2-More runway movements mean more flights into one, two or more, or all the airports in the South East region. Denying that is ignoring the evident. There is a demand and it has to be satisfied one way or another.
3-There are arguments both in favor and against the expansion of one airport or another.
4-The preferences for increasing the capacity of one airport or another is, many times, the ability of the politicians to convince people to their way of thinking. 
5-More runway capacity means more flights, which mean more point-to-point or transfer passengers, which mean more economic benefit for the regions, the airports and the principal players at the airports. The more flights, the more likely the increase in connections to various destinations.
6-the country as a whole benefits, not just the South East region.
7-If no new runways are to be built at Heathrow or Gatwick then a new site has to be chosen. This means Luton or Stansted. Luton is the better situated airport but presents difficulties in construction - but nothing like an Estuary airport. Stansted would be the prefered solution for many in government or the Civil Service - as it has been since the early 1970s. However, with respect to the rest of the country it is out in the boondocks, difficult to reach and needing an excessive investment in infrastructure. Most of this infrastructure already exists at/to Luton.
8-Any such commitment to a "new site" implies a commitment to a new 4 runway airport - something which is not necessary with the expansion of both Heathrow and Gatwick.  
9-The choice of Luton as a new 4 runway airport could well mean the reduction, or even closure of Stansted. The choice of Stansted would well mean the closure of Southend and possibily Luton. Both choices mean a reduction in alternatives.

Let us look at some of the non-truths....

1- Limiting the number of flights at Heathrow or Gatwick airports does not mean a total reduction in flights in a region.
2-Can the demand for more flights be satisfied by replacing Heathrow flights with Stansted ones, or Gatwick flights with Luton ones? This is just wishful thinking.
3-Many people like to think that the unused capacity at regional airports can be used to satisfy demand.
In certain instances this might well be the case. However, it is not true in most cases. I do not hide behind the decision of British Airways(BA) to pull out of UK regional airports to justify the fact that there is no demand into and from the regions to warrant onward flows to long distance destinations. I honestly think that there could be a demand but BA is not interested. That then becomes a self serving argument - no in-put therefore, no out-put,  no in-connecting services therefore no outgoing services to North America or Asia --- even if the demand had been shown to exist  before.
4)- Any meaningful descision can be put off/delayed  to another Parliament.That is just sweeping the problem under the mat.
5)- Luton cannot be developed as a 4 runway airport. This is false since there is sufficient space between Luton and Harpenden to fit in 4 parallel independent runways which would not affect either town with overflying.The ground itself needs leveling but the work itself is far less than any envisaged on the construction of an Estuary airport.

From this point we can develop the argument to include many differing opinions.

This blogger has expounded on this issue before as stated so it is not necessary to repeat all the same arguments in detail.

Considering one aspect, extending Heathrow´s runways westwards towards the M25 can help in the issue of noise reduction.The northern runway can be extended 900 meters towards the M25 while the southern runway can be extended 1300 meters.
This means that noise pollution over West london can be mitigated to some extent since the aircraft can be landed that much further down each runway so eleviating the noise problem over extensive areas of West London.
Add to that the possibility of increasing the angle of descent for the landing aircraft then the height at which the aircraft fly into Heathrow (or Gatwick) can be increased to a fair tranch over the built up areas - the higher the approach the lower the noise. 

Extending the runways further west over the M25 motorway and even over the reservoirs west of the motorway is a possiblity but would be ridiculously expensive and unnecessary.

If measures can be taken to extend the runways westwards towards the M25 thus enabling aircraft to land further along each runway then the noise issue can be mitigated.
However, combine that with the improvement of aircraft and engine design (which has been evident over the past decades) then there can be a real reduction in noise pollution.
If then you go the one step further to legislate that ALL aircraft entering or leaving from Heathrow (or Gatwick for that matter) have maximum permitted noise levels, then you can ensure that the reduction in noise levels over West London (or Crawley in the case of Gatwick) is real and substantial.

The fuel pollution, i.e. CO2 or other toxic emissions, is limited by improvement in airline and engine technology. Over the years the emissions have been reduced to much lower levels so as to be more acceptable. A Boeing 787 does not have the same emission levels as a B767 or B757. An Airbus A380 or A350 does not have the same level of emissions as a B747-400 or an A340. These new aircraft provide a lower level of noise and pollution not seen before.
Quite frankly, it is really ridiculous to say that the effects of aircraft movements over any given area are the same in 2015 as in 1985 or will be in 2030. That is an ostrich approach.

This blogger believes that a third runway at Heathrow and a second runway at Gatwick can both be built to solve the shortage of runways in the South East of England. They both would mean years of investment but not from public money.

They should be permitted on the basis of a reduction in aircraft noise, measurable, verifiable and, if necessary, sanctionable for excesses. The same criteria would apply for toxic emissions. The fact that the aircraft landing and taking off from Heathrow and Gatwick had to conform to a limit of 55-57 decibels, or whatever were decided, together with engine emissions of xxxCO2, could make the constructuion of an extra runway at each airport viable.

Applying these reductions for all operations over two years gives time for the airlines to adapt (previously I said a generation but now I reduce the time limit because the roll out of the new aircraft will be faster than originally thought  -  so in effect since the initial idea was proposed until its implication a generation will almost have past). Maybe the British airlines should lead the way with European, American, Middle Eastern and Far Eastern airlines following. Then the "poor neighbours" could follow.

These rules applied to Heathrow and Gatwick would mean a big change in flying patterns. Applying them later to Luton and Stansted would help redistribute the traffic into/out of London.

Other considerations:
A third runway at Heathrow does mean a new terminal. This would be situated over the road and rail tunnel out from the terminals 2 and 3. It might even be called Terminal 1(previously I called it Terminal 6) to replace the previous terminal which is due to be taken down. Then it would have a direct connection to the Heathrow Express services and the Crossrail services (as they will then be) to the rest of the airport and into central London.

Having a terminal north of the Bath Road does not mean there would be any necessity for aircraft to cross over the northern runway to gain access to any terminal. The best solution would be for all flights out of the (new) terminal one to connect to the islands and near connections. By this I mean Ireland and all the islands of Great Britain, plus others such as The Faroes, Iceland, Malta and even the Benelux countries, without excluding others. I mean all flights so that no airline or alliance is affected negatively.
That way BA (oneworld), Brussels Airlines(Star Alliance) and KLM(Skyteam) would be equally affected.
This is what was suggested in the previous article in February 2012.

News which is both good and worrying:
These headlines link to articles about all of London´s main airports and the increase in passengers year on year at each. Such is the reflection of an improving economy.
"Stansted welcomes over two million more passengers in 2014"  (Air Transport News 12-1-15)
"Record passenger numbers for London Luton Airport in 2014" (Air Transport News 8-1-15)
"Record year at London City Airport a sign of confidence" (Air Transport News 8-1-15)
 "Heathrow traffic and business commentary December 2014" (Air Transport News 12-1-15)

London Gatwick Airport: Facts and Stats

All well and good, but the worrying part is the delay in deciding on runway expansion in the south-east. This information surely illustrates the need to take decisions now and not after the next election. We are a victim of our own success.

We do not want any fudging. Let the government lay down (strict) conditions for runway building, then let both Heathrow and Gatwick get on with the job of building the extra runways at both airports with their own funding.
Not one but two runways are going to be needed by mid century. Cannot we anticipate demand for once?

Gatwick´s second runway option.

The analysis provided by the airline site anna.aero on 21st January 2015, provides some interesting comparative information about both Heathrow and Gatwick.

Let me quote the complete concluding paragraph....
"....It’s pretty obvious to anyone that both airports are clearly running close to maximum capacity and both are highly vulnerable to disruption (such as sudden bad weather or an operational emergency). An additional runway at both airports would considerably help with reliability as well as creating opportunities for significant traffic growth, and benefits to the UK economy of somewhere around a whopping £300 billion ($500 billion). To get this figure we combined the Airport Commission’s estimates of the economic benefit of each runway – a total exceeding £340 billion – and ‘slightly’ discounted the total to account for overlaps – in truth nobody knows what the actual figures are, but it is safe to say the benefits would be an absurdly huge boost to the UK economy and competitiveness, were any political party able to explain it to the electorate."

This blogger supports this view wholeheartedly.

Now on 3rd february 2015 the last chance to provide evidence for consultation presents itself..
To join the debate and tell the Airports Commission your feelings visit:
www. smartsurvey.co.uk/s/134578HXHDU.

16 January 2015

More on BA / IAG ´s way

It is four a half years since I wrote a piece about British Airways(BA) and its future. The first was published on 15th July 2010 under the title....
"British Airways has lost its way"
.....while the second was published on 24th September 2010 under the title ....... 
"Maybe BA has found a new way".

Time has passed and events have gone on so that the situation needs to be looked at again. This is emphasised by the potential takeover of Aer Lingus by the now holding company for BA and Iberia which is called International Consolidated Airlines Group (IAG).

IAG´s bid for Aer Lingus is quite logical, even if not desired by some.

The obstacles are quite clear. Would there be a restriction on competition between London and Ireland? On flights from London Heathrow the answer is clear but on city pairings the main competition is between Aer Lingus and BA against Ryanair and Easyjet(Belfast).
However, since Ryanair already owns 29.9% of Aer Lingus  Does not that danger already exist?

The Irish government would not look kindly on any reduction of Aer Lingus flights into Heathrow from any of the Republic´s airports (remember the hoohaa created by the reduction of flights to/from Shannon).
Thus I see that BA would consolidate its position on the routes by reducing its own frequencies or even withdraw from Dublin(as previously). I do not see BA withdrawing from Belfast as that would be considered a step too far politically.

Little Red´s 13 times daily slots are also up for grabs. Virgin Atlantic closes its routes from March onwards and if there are no takers to substitute Little Red(operated by Aer Lingus) then they all revert to BA except for two which are Virgin Atlantic´s own.

In those two ways BA could increase the number of slots for other destinations.

The shareholders could be a problem. The Irish government´s 25% share might well be sold under the right conditions, and price, as already stated. Ryanair would probably be glad to sell without losing money on its stake, as it is being forced to do at the momemt. This would enable Ryanair´s O´Leary to consider seriously the purchase of Cyprus Airways,(as he stated previously) or at least its assets after its recently announced closure.

The unknown element is Etihad which has a 4.9% shareholding. Would it make a serious attempt to take over Aer Lingus(to a maximum permitted 49%) to consolidate into its alliance or would it accept the inevitable if the Irish Government and Ryanair jumped ship?

In my view IAG will win through. Dublin will be promoted as a gateway to the USA and Canada, especially from the UK regions to protect BA from the transatlantic flights from Paris, Brussels, and Amsterdam.
Look at the "where we fly" map covering the UK and you see so many destinations to/from Dublin, 18 if my counting is correct, quite a few of which do not have flights to LHR. After all BA would just be looking after its own back yard.

Edited: 28th January 2015 
The anna-aero (the airline network news and analysis) website has just published a look at the IAG bid for Aer Lingus titled "Aer Lingus/BA deal could create opportunities for new transatlantic flows" It makes interesting reading, analizing all the ins and outs of a possible merger.

In this time let us look at what IAG has done.

Firstly BA and Iberia merged to form IAG. As expected Vueling was taken over since Iberia had a 45% stake in the airline. It operates very successfully as a LCC out of Barcelona, and has other bases throughout Europe. It is well run and very innovative, the proof of which is that both Easyjet and Ryanair have adopted some of its offerings to the public, such as selected seating.

British Midland(BMI)was in the hands of Lufthansa but could not make it profitable so decided to offer it on the market. The logical taker, Virgin Atlantic, offered a miserly sum(GBP100 million if my memory is correct) which was easily beaten by BA. The competition authorities made BA give up some of the slots to enable Virgin Atlantic to set up a domestic airline as competition into LHR and as a feeder for its routes.Known as Little Red (and operated by Aer Lingus) this has proved to be a failure by not achieving the required occupancy levels demanded by Branson and thus was not profitable in the two years of its existence.If no other offer for those slots to set up a domestic carrier is forthcoming then the slots revert to BA.

BMI Baby(based in East Midlands) was closed down while BMI Regional(based in Aberdeen) was sold on to the original founders of its operations and is going strongly, now cooperating with Lufthansa especially in and out of Munich.


Iberia has tried to set up a low cost operator based in Madrid called Iberia Express It has proved to be very profitable from year one but has been impeded by the unions and courts from expanding very much.It is now into its third year.

What IAG has not done.

Air Nostrum(operating as Iberia Regional) still forms part of the group though IAG has still not taken up any shareholding in the company.

Flybe still remains an associate company of IAG. There is a 15% shareholding. It set up a company called Flybe Nordic with Finnair´s short-haul flights in 2011 but eventually sold its 60% stake in it to Finnair in November 2014 for €1, in an attempt to reduce group costs.

Comair is BA´s franchisee in South Africa where IAG still maintains its 18% shareholding.
 This market, however, is hotting up with the advent of low cost competition from both inside and outside the country. Comair does have a low cost brand in Kulula so should be able to hold its own.


Sun-Air Scandanavia still operates as BA´s franchisee from Billund in Denmark. It has extended its routes as to compared to the map of 24/9/10 but not by very much. It appears to still have a lot of unfilled potential in the Scandanavian market.

 Open Skies is BA´s subsidiary which flies 3 times daily Paris Orly to New York, both JFK and Newark. Other destinations tried and failed were Paris-Washington DC and Amsterdam-New York.The choice of Paris Orly might well be convenient for access to central Paris but it is not so good for connections with other oneworld airlines except for some Iberia flights. 
Open Skies flies three classes Biz Bed(business), Prem Plus (premium economy) and Eco (economy). This is the latest configuation after trying a business and premium economy mix as they obviously need the backsides on the seats, up to 84 in each aircraft according to the configuration.

However, now it finds it has competition in the form of La Compagnie which in July 2014 started to fly Paris CDG to New York Newark. It flies just one Boeing 757 at the moment (the same aircraft as Open Skies) in a business class configuration of 74 seats. Also without even completing its first year of operation it will offer a London (airport not specified)-New York(Newark?) route from the spring of 2015. This will be in competition with BA´s business class routes from London City. The chances of La Compagnie making a success of the venture is quite high since the founders of the airline include the founders of L´Avion which BA bought to help launch Open Skies.

What all this boils down to is that IAG has taken over Vueling and BMI but nothing else.

What IAG could have done, did not do and/or could not do. 

A good rule of thumb is to look at the fellow members of an alliance.That way we may see likely partners. The IAG group is a member of the oneworld alliance with its 15 participating groups.This is a loose grouping which does not restrict members from having other connections, codesharings or the like.

However, over the years various changes have taken place. Malev(Hungary), Kingfisher(India) and Mexicana(Mexico) have all gone bust. Air Berlin (BA sponsored its entry into oneworldhas sold a large share(29%) of itself to Etihad. Thus, this airline has one foot in and one foot out of the alliance. Malaysia Airlines (MAS) has entered oneworld and encountered two tragic events. One is the loss of a flight from Kuala Lumpur to China in 2014, which apparently was diverted and lost over the south Indian Ocean, and has still not been found. The second was the shooting down of a flight from Amsterdam to Kuala Lumpur by, apparently, pro-Russian seccessionist forces in the Ukraine in 2014. These events have damaged the airline through no fault of its own.

This last case of Malaysia Airlines might open the door to a foreign participation in the carrier. 

In the meantime oneworld now has in its ranks American Airlines merged with US Air, one of the three major Arabian Gulf carriers, Qatar Airways, the South American TAM merged with LAN into Latam, as well as the Russian S7, Sri Lankan and the consolidation of Japan Airlines(JAL) into the alliance. 

What IAG could do. 

In Europe at the moment there are three airlines on the block. Almost all the airlines are in one alliance or another while some have opted to join Etihad in its shareholding alliance - such as Air Berlin, Air Serbia, Darwin, Aer Lingus 

Aer Lingus is up for grabs as we have already stated. TAP Portugal is also for sale. This would most probably  not be a proposition for IAG as it would give IAG a predominance in the Iberian peninsula and on traffic to South America. the third airline is the Polish LOT. This could be very interesting for IAG as it would fill in a gap in Central Europe which could be lost with the withdrawal of Air Berlin from oneworld, if that were to happen. With a population of about 40 million Poland could provide a decent springboard to increase market share in Europe.

With France, Germany, Turkey and Greece covered by the present carriers there seems to be little opportunity to set up or take over another option. The country missing from the list is Italy. Etihad has just taken up its permitted maximum shareholding of 49% in Alitalia. Will that be sufficient to turn the loss making airline around.?

If any airline is interesting in Italy it is Meridiana. Among its partners the only airline mentioned is British Airways. It flies from London Gatwick to Catania, Cagliari, Olbia and Naples which are more destinations than 5 years ago, while from Madrid the destinations are Cagliari, Naples and Turin. Into Barcelona it does not fly.However, Vueling does have bases in Italy and flies several different domestic routes. Thus it seems that IAG has to clear up what the policy is in Italy. Does it want to expand with a takeover of Meridiana, or is it quite happy with the present preditory situation?

What about the other members of oneworld? Finnair is a relatively small airline and for some time there has been speculation about its incorporation into IAG - a logical move,  but is it likely in the short term?. MAS has got into difficulties through no fault of its own so might welcome a foreign partner - but proably not at 100% so that possibility is very much up in the air. Qantas has focused away from Europe to Asia and the Arabian Gulf so probably would not welcome overtures from European based groups. The Latam goup has encountered difficulties, especially with the downturn in the Brazilian economy. The situations in Argentina and Venezuela have not helped the group with the economic uncertainty. I do think Latam will sort itself out without any help from IAG.

Where else can one look then for opportunities? The next best thing is to look at the other airlines with which IAG cooperates one way or another. Three come to mind.

10th June 2014 Iberia announced it would codeshare with Interjet (Mexico) to 24 destinations in that country.This would fill the gap left by the demise of Mexicana in that country of 110 million people. While there is no equity investment in Interjet the agreement should benefit both sides. I should expect BA to extend the codesharing to its routes as well. If this leads to any greater cooperation we will just have to wait and see.

Bangkok Airways(Thailand). This is a codeshare partner of BA. As can be seen from the route map many routes are shared principally with Qantas, JAL, and MAS, all partners in oneworld.

WestJet (Canada)This is another codeshare partner of BA though it also codeshares with American Airlines and Delta Airlines. Thus I see it as an airline wishing to maintain its independence.

There could be other possibilities for merger partners but we always come up against economic nationalism where flag carriers are seen as important standard bearers of a country´s independence. If not at least there are limitations on shareholdings.

The USA is the worst offender in this case since it will not permitt any foreign company or group to have more than 25% of any of its airlines. BA came up against this when it had shareholdings of 25% firstly in United and later in US Air. The Open skies agreement of 2008 between the US and European Union supposedly liberalised the sky traffic but "The treaty disappointed European airlines as it was tilted in favor of United States airlines: while they are allowed to operate intra-EU flights, European airlines are not permitted to operate intra-US flights nor are they allowed to purchase a controlling stake in a US operator."

This was supposed to be solved in the following two years but nothing was done. In fact when Virgin America was set up the US authorities ensured that the Virgin group had no managerial control over the airline at all. This means that any merger mooted between American Airlines and IAG is not on the cards, or at least should not be.Take as an example of the differing attitudes when Singapore Airlines sold its 49% stake in Virgin Atlantic to Delta Airlines. There was no fuss whatsoever.

India is another country with strict control on shareholdings. Before the limit was 25% for foreigners as in the US. Now the limit has been raised to 49% so that various joint ventures are being set up such as Air Asia´s and Etihad´s partnership with Jet Airways. I do not see this as an interesting market for IAG as yet.

Most of the important markets seem to be closed. The best bets seem to be in Central and South America but that has to be seen. The Caribbean holds opprtunities especially in the tourist market to/from the US and Canada, but that might not be considered.

Africa has great potential but one cannot see where to start unless Comair South Africa is used as the vehicle. Ethiopian and Kenya Airlines show that a lot can be done but maybe the thinking should start on the other side of the continent with Royal Air Maroc.

Whatever, a lot can still be done to consolidate the industry - keep watching.

Edited: 30th January 2015
And now oneworld partner Qatar Airways has taken a 9.9% shareholding in IAG. 
Edited: 31st January 2015 - published by CAPA
"Qatar Airways buys its 10% stake in IAG, showing it wants a serious relationship"