Tuesday, 30 November 2010

BA/Iberia: The Galleon enters harbour.

As predicted, BA's Chairman Martin Broughton had no problems with reluctant or recalcitrant shareholders at yesterday's meetings to approve the company's move into oblivion as a standalone financial entity and into the hands of IAG,- International Airlines Group. Two hours to the south west and not on the direct onward path to anywhere other than South America, Iberia's shareholders were just as enthusiastic to get their hands on the new paper. At the three public meetings which took place, the lowest percentage in favour of the merger was 99.88%. The small number of individual investors (about 50 according to The Times)who turned up despite the bitter weather and the London tube strike need not have bothered. Thanks to the institutional investors it was all over before it started and their small percentage of shareholdings would make not a jot of difference.

By all accounts the Chairman was in a bullish and not too cuddly mood, confidently tossing aside questions he didn't like with something approaching apparent contempt.This was despite several questions from the floor being very valid and the concerns expressed reasonable and worthy of considered and considerate replies. This rumbustuous knockabout stuff is a worrying sign. Once Chairman and Board start treating what they see as the little people without genuine understanding and some degree of empathy it is a straight run to dealing with all who question or disagree the same way,-investors, customers and staff alike. Shareholders are also usually BA customers and they wil be concerned that the same "policy" driven high handedness, already a feature of some BA dealings with its customers, will become a dominant and dangerous culture. Never mind the icy patches outside yesterday. Even on a warm day there are enough bananaskins around for the Board to avoid throwing more in its own path.

In the words of the 1960's folk song: "If I had a hammer,I'd hammer out danger............"

Footnote: One of the advantages of registering IAG in Spain was said to be the tax breaks available there. Does this mean that UK Plc is about to see a large chunk of UK corporate tax move outside its grasp along with its erstwhile "national carrier".