Summary
The article purports that the whole deal of a merger between British Airways (BA) and Iberia (IB) is highly unlikely due to the misproportions of the companies involved. The Spanish seem to favour a 1:1 merger, a merger amongst equals. This is the crux of the problem, as nothing could be further from the truth. BA is roghly twice the size in Available Seat Kilometres (ASKs) and roughly 80% bigger in revenues and still 25% bigger in fleet size, of which it also owns a major part. Should the Iberians insist on a 'merger amongst equals', then it is truly on the rocks, as the article states.
Analysis
Iberia has in the past benefitted from a high oil price, which affected it less than the larger BA, which also has much more long-haul routes requiring more fuel. IB also benefitted from homegrown trouble at BA, such as the messy T5 operations.
However, much different to reality, the sun didn't shine as long on Spain in this case. The 'don't strike, but work as slow as possible' action by pilots and cabin crew and also by air traffic staff caused havoc at Iberia. Already having to deal with falling load factors and decreasing yields, this was yet more bad news at the wrong moment.
And persistance is something the Brits have always been good at - esp. on the battlefield. No, I m not trying to recall Armada-like scenarios, but the mixed bag of issues at IB helped BA to regain the upper hand in the talks.
To my mind, the talks are far from over yet! Sure, it is possible that the American-made financial crisis helps, as well as the weak Spanish economy and labour issues as well.
To my mind, there will be a merger, but the scales will tip in favour of BA. I guess a merger between 65:35 and 55:45 - so 10 percentage points in total. I also think this will happen within Q1 of this year.
To my mind, there is no option on either side of the table, which again helps BA to get what it wants and needs. In the end, both will be happy as they won't loose face at home and both will benefit in the medium to long-term.
