British Airways parent company IAG this week finally gained control of Spanish low cost airline Vueling. Prior to taking control, IAG already owned over 45% of the airline but had seen its offer of 7 euros per share for the remainder of the airline rebuffed by the Vueling board. Having raised its offer to 9.25 euros per share, valuing the company at some 277 million euros, the board then recommended the offer and consequently IAG now own just over 90% of the airline.
IAG has been chasing Vueling, one of Europe’s few profitable airline, for some time now. With IAG’s existing Spanish carrier Iberia mired in huge losses, IAG’s CEO Willie Walsh sees Vueling as an opportunity to grow the business on a sound basis and, although nobody will say so in public, it is clear that IAG expect employees at Iberia to move towards salary levels and working practises at Vueling rather than the other way around. Mr Walsh has already made it clear that Vueling will continue to be run as a stand-alone business and will not be merged with Iberia or its own low cost carrier off-shoot, Iberia Express. “We plan to retain Vueling’s current business model and management structure and its strong base in Barcelona,” Walsh said. “It will benefit from the group’s financial strength.”