26 January 2009

BA take another dive - Walsh facing music

BA has finally issued the long awaited profits warning.

This has a ripple out impact that will likely see the Iberia merger killed off. Actually the situation of the collapse of the pound vs the Dollar and Euro has seen Iberia now worth more than BA.

The escalating costs and the reduction of premium traffic is now acknowledged as hurting the UK former national carrier.

Walsh needs to step up and start looking hard at some more action to address some of these issues.

On the positive side - a return to their corners of BA and IB will make it harder to make the really larger BAAABI deal work. My prediction is that IB and BA will walk away from a marriage but will continue to push the BAAABI idea for now. Given the other arrangements in Star and Skyteam - this makes more sense. Not sure that Virgin however will agree.


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