The parent company of British Airways, the UK-based airline company, has expressed an interest in investing in TAP Airline, Portugal’s national air carrier.
International Airlines Group (IAG) is keen to acquire TAP Airline stock if the Portuguese government decides to sell the airline company, which has reported an operating profit for 2011 of EUR485 million. IAG also owns Spain-based Iberia Airline, and has currently entered into an agreement to acquire British Midland International from Lufthansa, a German airline company. The company is trying to strengthen its presence in the European airline market, and TAP Airline would appear to meet all of the required criteria.
The company is also searching for an airline to partner in China, as part of its Oneworld alliance, a global airline partnership.
The IAG chief executive, Willie Walsh, said, in the annual report to the company’s shareholders, ‘The only other airline we have expressed interest in is TAP Portugal, which may soon be privatised. TAP has an extensive network into Brazil and Africa, two strategically important markets for IAG. If privatisation goes ahead we would want to look more closely, but there’s no guarantee we would bid. Continuing to develop the Oneworld alliance also remains key. One weakness we need to address is the fact that, unlike our two rival alliances, we lack a domestic partner in Mainland China, which we think is a necessity. Consolidation is not just about takeovers and mergers. It’s also about forming the right partnerships for the new realities we face as an industry.’
IAG is also thought to be considering taking stakes in American Airlines and Japan Airlines (JAL). Both companies have had brushes with bankruptcy in recent times. American is still in chapter 11 bankruptcy and JAL came out of bankruptcy last year and could file for an Initial Public Offering.