Is British Airways giving too much away?
Despite the fact that British Airways shareholders will hold 55% of the enlarged British Airways/Iberia partnership, it has been revealed that the company will be domiciled in Spain for tax reasons and all shareholder and board meetings will be held in Spain. This is a blow for British Airways and the 188,000 small investors who hold shares in the company as they will have to pay for their own transport to attend future shareholder meetings.
Despite stock market optimism regarding the deal, it has been revealed today that British Airways cabin crew will be asked to vote on potential strike action ahead of the festive period with ballot papers set to be mailed tomorrow. This is an ongoing issue which continues to have an impact upon the smooth running of British Airways, its profitability and its cash flow. However, Willie Walsh, the chief executive of British Airways, appears unwilling to give way on certain cost issues and many people believe we will see strike action before Christmas.
Even though the merger with Iberia has been agreed in principle, it could still take many months to complete due to various regulatory hurdles and formal documentation required.
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