Yes, in a dose of Brexit inspired madness, BA’s sister airline Iberia has made a surprising revelation: it is not actually a subsidiary of a major international aviation group.
It is, in fact, part of Spanish department store group El Corte Ingles. Which, admittedly, could explain a lot but came as a bit of a surprise none the less.
It turns out that the corporate equivalent of a recent DNA test has proved that Iberia and British Airways are not actually brother and sister. Iberia’s sister companies actually include:
…… a small chain of Spanish opticians. Whilst we thought Iberia was related to Aer Lingus, it actually spent Christmas with BriCor, which appears to be the Spanish version of B&Q (they are doing 20% off sheds at the moment).
If you think I’m making this up, take a read at El Pais here.
Why does Iberia claim to be a department store subsidiary?
Here’s the thing. Only airlines which have 50.1% EU ownership have ‘flying rights’ to operate between two airports within the EU.
Iberia is owned by BA’s parent, International Airlines Group. Whilst IAG is based in Madrid, it does NOT have 50.1% EU ownership if you look at the shareholder register. Qatar Airways, for example, has a 21% shareholding in IAG.
If the UK leaves the EU without an aviation treaty being agreed, as would happen in the event of a ‘no deal’ Brexit, Iberia could be grounded. Iberia has thought of this and actually put this bizarre structure in place back in 2011 when IAG was created, except that no-one took any notice at the time.
Whilst 100% of the ‘economic rights’ to Iberia’s revenue and profitability are owned by IAG, it turns out that 50.01% of Iberia’s ‘political rights’ are owned by the El Corte Ingles department store chain.
It is now up to the European Commission to decide if Iberia is actually:
owned by a multinational airline business with over 50.1% of its shareholders outside the ‘ex UK’ EU, in which case it could be grounded at the end of March, or
a sister company to a handful of department stores, an opticians and a DIY chain
You can find more at El Pais here.
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per El Pais: “a very Spanish company: El Corte Inglés.”
In this context, that name is deliciously ironic!
But seriously, I can’t see the Commission or the ECJ agreeing – once outside, Brits will realise how aggressive the EU is to outsiders on trade matters.
Similarly, I cannot see how Easyjet’s Austrian subsidiary gets round the same issue per se (it’s still controlled by the company listed in the UK) as otherwise US airlines would have done the same thing long ago.
I had assumed that by this stage both Easyjet and IAG had plans for E.g. listing subsidiaries locally once Parliament decides what is actually going to happen.
Would think easyjet are ok myself since Stellos, the founder owns at least 37% and he is a Greek national.
Easyjet been preparing for over two years and I believe at least half the fleet now registered to the Austrian AOC.
Republic of Cyprus national if I am not mistaken.
How would BA be affected by a no-deal Brexit? My 3 trips abroad this year are booked with BA (1 EU, 2 non-EU).
I believe a non-EU owned airline can fly to or from the EU but not within it so BA won’t have a problem since all their European flights begin our end in the UK.
1) Deal – Check in as normal. You will notice no difference. (There is a l o n g transition period).
2) No deal, as 1, but take a £5 ID permit to travel card with you. Details when it arises.
The non-EU one could be the trickier one. If say you’re going to the US:
i) Delta complain to the US gov about BA’s control/ownership (non-UK)
ii) Trump’s twitter will let you know if you can travel.
BA has a similar ownership wheeze. 50.1% of BA is owned (non-economic) by a trust company LDC (NCS) Limited which (supposedly) exercises it’s voting rights in the interests of IAG’s UK shareholders.
That TATL JV with AA (and Finnair) is looking particularly important to IAG now.
Without that, all the US3 would be lobbying in the sort of way you suggest.
But with it, AA will speak for IAG (and Finnair which is still EU)
The FT reported that we now have a post Brexit aviation deal with the US:
” The US and UK have agreed a new “open skies” aviation deal to take effect after Brexit, when the UK falls out of the existing US-EU arrangement. The agreement allows flights to continue between the US and UK without interruption after Brexit.”
https://www.ft.com/content/41749ed0-f325-11e8-9623-d7f9881e729f
I wonder if it could affect my flight to tokyo on 12th April. I doubt it though
BriCor also sell non OEM parts for 787’s apparently…. Their engines have been selling like hot cakes since the Black Friday reductions that are continuing into the New Year sales period!!
You forget the bureaucratic mess of the EU. The suggestion of Iberia’s ownership will be taken seriously and there will be years of legal tit for tatting to try and come to a compromise (not even a solution these days) of their actual ownership which will also doubtless generate several points of commercial law and airline regulation and registration. I can see why some people think life is so much better in the EU when it generates jobs for life…….!
Go on, light the fireworks, Ive got stuff to do today!! :- )))
It is very simple. Either all IAG airlines are EU airlines, or they are all non-EU airlines. BA cannot run domestic flights if it turns out IAG is EU controlled.
Stand by for the sale of BA to the shiny new IAG.uk, who may perhaps have the interests of IAG shareholders at heart?
But rules about who can fly in the post Brexit UK are made in the UK: “taking back control”, so one Cabinet committee meeting, not a process involving interlocking bureacracies.
If IAG shifted to an EU country I can’t see the UK government preventing them running UK domestic flights – that would bring ire from many people in what would be a tough time anyway.
Yeah, but if IAG shifted to an EU country, then BA would lose traffic rights to all countries where the UK-“that country” traffic agreement demands that airlines are either based in the UK or in “that country”. And those should be the majority of the countries which the UK has air traffic agreements with.
Hmm…wonder how that would affect my BA LCY-IOM, as IOM is neither in the UK nor the EU?!
The IOM is in the common travel area so there so be no impact.
Ahop – CTA is about imigration controls, it has nothing to do with rights to operates services.
However, the only two govts concerned are UK and IOM, so I agree there is not chance of a problem here.
Maybe that’s why, as often discussed here. it does not seem that British Airways is interested in providing domestic flights within the UK? Only to and from London and other countries…???
Perhaps now we’ve understood why British Airways does this.
Oh please! Those stupid “London airways” complaints are only written by the economically and business illiterate.
BA is a hub operator, London makes sense as the hub location. And operating P2P services from elsewhere in the U.K. would be a distraction.
IAG could have another airline to do that, but it makes no real sense for it to be BA, certainly not the same BA (it could be BA branded).
And I say this as someone who would support moving parliament to Manchester etc.
The Spanish should be more worried about the airlines which bring the majority of UK tourists to the Costas, Balearics and Canaries.
That is not an issue because they are not flying between two EU countries.
They are so worried that soon nearly all BA flights to/from Spain from the UK will be operated by Vueling.
Surely the Brussels view is:
If Brexit happens, everybody still wants flights between UK and EU27, which is why their no-deal proposal allows that.
But British airlines, like currently American and Asian ones then have to “keep out of our travel market”.
So IAG should sell Iberia (and Vueling and Level) to AF/KLM or Lufthansa (at a firesale price)
And Easyjet? Tough on them – the market share should go to Eurowings, Joon ec.
This is EXACTLY why we are in such a huge mess. So many people with an enormously inflated opinion of the UK – “we don’t need them but they need us” is complete and utter rubbish, as people should finally be waking up to about now!
Though it goes without saying that neither the EU nor the UK will allow mass disruption in air travel.
(I should clarify that I was talking about people in general – not you specifically. Yours was a very tame claim and I imagine you are smart enough to know this already!)
Ridiculous post.
The government could probably learn a thing or two about early planning for a no deal from Iberia
Or everyone will find out brexit was hyped more than Y2K
+1
And GDPR
Brexit certainly does have the feel of Y2k, asian bird flu, Sars, etc… about it. Waiting for the man with a ‘the end is nigh’ sign
Yes sure we can have a Brexit in which virtually nothing changes, except we’re outside the decision-making processes of the EU. And then what is the gain?
Sadly not the case – of course lots of proper planning went into Y2K, but have already seen staff leave and major international studies cancelled before we’ve even left.
Actually Y2K wasn’t overhyped at all. It’s only because of a lot of hard work put in before the event that nothing happened on the day!
Indeed. Some critical legacy systems would clearly have fallen over if proper prepatory work had not been carried out. Unlike this omnishambles…
+1
I think anyone who worked on Y2K prep can tell, from this comment, that you didn’t…
+1
Also I’ve never had smallpox, which proves that vaccines are completely overhyped 😉
The fact you even hint at an equivalency between the two shows just how ignorant many are on this topic! It’s beyond irrefutable that Brexit will have a huge impact – the only questionable things are how severe it will be and how much it affects you personally.
It’s actually a very good department store in case someone is considering checking them out. Their groceries section is very Waitrose-like.
and expensive…
We have one pretty much round the corner and whilst their department store is often very good value with a wide portfolio of products the food is eye wateringly expensive in the main.
And if you are in Barcelona – their food court is one of my favorite restaurants.
Top floor next to Placa Catalunya it has a champagne and oyster bar with views over the city. Bit better than the windowless Costa at the back of Tesco!
They also have hyper store which is not expensive plus are a very large travel agent.
I am travelling Saturday 30th March Heathrow to Madrid 07:35. I expect one of the first HfP readers to fly after Brexit, assuming the 29/3/19 date holds.
Have to say really not concerned. Even though a flight out to Madrid Friday evening for the connecting flight to Cuba Saturday is possible, quite happy to take my chances with flights operating normally and no planes dropping out of the sky come brexit.
Surely even the EU understand this is in their best interests.
Of course, post Brexit, UK carriers flying between EU (and therefore non-UK) airports could well be a different matter…..
The EU already announced that even if there is no deal, for one year after 29/3/19 they will allow all flights to and from the UK that are already schedule to go as planned, regardless of the legal technicalities with ownership&control issues and traffic rights. If anyone can screw up in here is the UK (like in the rest of the Brexit mess). The EU certainly has many problems, but when it comes to the practical stuff they are usually much better than the regular govt bureacracy.
I’ve seen an EU Commissioners’ proposal, but I’m unclear if it has been agreed by the relevant member states – have you information that this has happened?
I will be one of the last as flying Uk/Spain late on the 29th to escape.
Wonder what Ryanair’s doing? they’re pretty smart…
Brexit hasn;t helped because the airlines I watch have expanded far ore to European destinations than to UK destinations, in the past year or two. this has already taken business and jobs away from the UK. They saw the writing on the wall and it’s not good. They want to be in Europe and will.
I’m flying back to the UK from Madrid on 29th March
Just in time to see the fallout of Brexit 🙄😄
El Corte Inglés has outstanding service and always goes above and beyond its service commitment.
There is in no credible way Iberia or BA could have any relationship to El Corte Inglés.
True that!
My last day at work will be March 29th, very appropriate!
Are you Theresa May in disguise?
Most definitely not…
I was going to say we can only pray, but then realized that means Prime Minister Boris is a real possibility – God help us!
GHU, indeed
I’m due to fly back from Malta on the 4th April after disembarking from a cruise originating in the UAE. Hope they make me stay.
OT but Iberia related – has anyone seen/heard any data points regarding cancelling Iberia flights booked using the promo points? My wife and I have flights booked from MAD to MEX in February, but she is now pregnant and has been advised not to go due to the possible Zika risk.
I’m just a little concerned that if we cancel, we will lose our 180k promo points…
MEX itself is not in a Zika potential area: altitude too high.
Yes, I pointed that out to them, but they still insisted that it was a risk and the wife is extremely risk-averse, so she now doesn’t want to go at all.
Contact Iberia and explain the pregnancy. Apparently someone on the flyertalk Iberia forum was given their points back after a major change of flight times.
I will be flying back from India to London on 30th March, taking off a couple of hours after Brexit. I hold a EU passport – will be interesting to trial what happens at passport control in LHR.
Well it would be nice to have a separate lane for UK citizens like they have for US citizens entering the USA.
Why do you say that?
Ridiculous.
Oh indeed it’d be lovely. What would also be nice to have is a separate lane for EU citizens entering the EU, with British citizens stuck on the slow visa lane… Careful what you wish…