up and away
Posted by Barry Silverstein on May 5, 2010 10:35 AM
The big airline news this week may have been the United-Continental merger, which will result in the largest airline in the United States. But there's another airline merger that's creating an interesting flap in Europe.
The recently announced union of the UK's British Airways and Spain's Iberia is spawning a new holding company with the innocuous name of International Airlines. However, the new company is being incorporated in Spain with a Madrid address. Technically, that means the new airline is Spanish.
Why is that a problem? Because normally, it would mean British Airways would be de-listed from the FTSE 100, the prestigious European stock listing not unlike the S&P 500 in the U.S. And according to FTSE rules, the company is Spanish, not British.
British Airways was forced to do some scrambling and convince FTSE International to accept an "additional primary London listing" for the new airline.
International Airlines will now be headquartered in the UK and over half the merged airline will be owned by existing British Airways stockholders. The British Airways brand will remain as a separate operating company.
A British Airways spokesperson tells the Times of London, "International Airlines will have a premium listing in the UK. Its shared will be traded on the main market of the London Stock Exchange and it is envisaged that they will be included in FTSE's UK Index Series."
While some may debate the merits of airline mergers, at least another brand disaster has been avoided. Jolly good.