Is the merger now on the boards between IB and BA a desperate last ditch effort between two carriers that seem to be staggering like a couple of overserved corporate entities after having managed to lose more than €400 million Euros combined so far this year—or will the new combine live up to its new corporate cover name TopCo?
Air Cargo News FlyingTypers Correspondent Heiner Siegmund reports from Hamburg.

(Exclusive)—Now that British Airways and Iberia, both members of the global Oneworld Alliance, have inked a preliminary agreement for a merger, the pact if all goes right should be fully completed in late 2010.
    According to the deal a holding company called TopCo will be established to coordinate the activities.
    TopCo will be based in Madrid, acting under Spanish law with BA holding 55% and Iberia holding 45% stake.
    Iberia’s CEO Antonio Velasquez was nominated to head TopCo as chairman. Responsible for strategy, marketing and operations however, will be the London-based headquarters of the joint enterprise. BA boss Willie Walsh is named to become CEO of the merged carrier.
    The agreement is the result of a long lasting and complicated birth since merger discussions between both parties commenced sixteen months ago in early 2008.
    Their mutual talks have finally resulted in the holding structure and the guarantee for both Iberia and BA to operate under their own brand and livery in the coming years.
    TopCo has a combined fleet of 419 aircraft that are deployed on 205 routes. They mutually turned over €15.4 billion euros in 2008 carrying 62 million passengers and 1.19 millions tons of air freight.
    TopCo will become Europe’s third biggest capacity provider after Deutsche Lufthansa and Air France-KLM. While BA’s main strengths is the North Atlantic traffic, Iberia is ranked first on routes between Europe and Latin America.
    Presently both carriers are facing severe financial difficulties with BA having posted a loss of €231 million in the first half of 2009 and Iberia a minus of €182 million. Due to ongoing losses British Airways plans to axe 4,900 jobs by March 2010, with Iberia announcing 2,200 redundancies and the cutting of unprofitable routes. In a joint statement the airlines predicted that their getting-together will lead to yearly cost savings of €400 million.
    Aviation experts, however, are skeptical if the arrangement will lead to a happy marriage.
    “A main step for being successful is the harmonizing of their different networks,” states Dirk Steiger of Frankfurt-based market analyst Aviainform GmbH.
    This can only be achieved if both are willing to streamline their traffic flows and give up routes. Given this, BA would have to pull out of the Latin American market completely by transferring passengers and cargo shipments to partner Iberia at Madrid’s Barajas International Airport. Iberia likewise would have to withdraw from North America and hand over their travelers and air freight shipments to British Airways at BA’s gateway London Heathrow for onward journeys to the U.S. or Canada on board of BA’s fleet.
     Says Steiger: “This network adjustment would be a major step and create necessary synergies that both airlines badly need.”
    According to him there might be another hurdle that Iberia and BA have to clear in the near future for successfully operating under one roof–the different mentalities of Brits and Spaniards. “Cultural differences can be fruitful but sometimes also very destructive as history proves,” the analyst states.
    Fact is that groom British Airways was only bride Iberia’s second choice during a long search.
    Originally the Spanish carrier opted for a possible marriage to Lufthansa. But its minority stakeholder (13.5%) and now majority owner (55%) British Airways successfully torpedoed that. Considering these circumstances it seems doubtful, if their announced marriage will lead to a life-long love story.
Heiner Siegmund

     Those Incheon International Airport Corporation (IIAC) lightweight Unit Load Devices (ULD) with imprinted brand logo issued to airlines operating at Incheon International are greening up locations elsewhere.
     As a part of the “Air Logistics Specialization and Branding Project” supported by the City of Incheon, IIAC is funding 50% of the ULD purchasing cost for participating airlines in support of their green growth.
     IIAC hopes ULDs with the logo “Incheon Airport, Green Cargo Hub” help to continue generating publicity for the airport and the green initiative, as they circulate around the world.
     By slapping the airport brand on a ULD as a medium of advertisement, IIAC is creating a first in its Air Logistics Branding Project.
     Despite being off to a good start IIAC is currently negotiating with carriers to do even more.
     The lightweight ULD, made of special kind of fabric, weigh 69 kilograms, its weight reduced about 40% compared to the existing steel ULD weighing 114 kilograms.
     This means many thousands of kilograms less carbon dioxide emission and a saving in liters of aviation fuel per container per year.
     Also as each container moves between airports—passengers and cargo handlers get a visual treat of Incheon’s image as a cargo hub.
     Steven Chang, the CEO of United Parcel Service, said the company’s effort to reduce fuel costs served as the primary motive for its decision to participate in Incheon Airport's lightweight ULD project.
     He also added that he hopes UPS and IIAC would further develop a productive and environment-friendly relationship in the future.
     As the project is raising positive response from airlines, IIAC has decided to undertake the project on an annual basis and expand budget for the project to support more airlines in 2010.
     Now all they need to do is quit print and go virtual to sell the rest of the message of the virtues of the IIAC cargo gateway as well.
     Cans either moving about or sitting on a hardstand cannot be relied upon to deliver a longer message than one line especially whilst hundred million dollar airplanes need to keep their attention on taxiing and where they are flying off to.
     We have some ideas about how to deliver a virtual message to the world of air cargo, by the way.
Geoffrey