Willie Walsh, head of IAG (parent of British Airways and Iberia) has made it no secret that consolidation will be the norm in the airline sector over the near future and that he’ll be the one writing the check.
With their recent acquisition of BMI from Lufthansa and hinting at taking a stake in American Airlines, he’s putting his money where his mouth is in his attempt to grow the “Speedbird” empire.
Royal Jordanian has had substantial struggles over the last year due primarily to the “Arab Spring” uprisings in 2011 that led to the 1300 flight cancelations and route reductions as a result of reduced demand. That ultimately led to an 82 million dollar loss for 2011.
Going forward, Royal Jordanian has indicated that it will need to raise capital in the next 2 or 3 years to help improve operations.
With Etihad recently buying a 30% stake in airberlin to increase it’s reach and with Emirates flying their A380s everywhere, it leaves Royal Jordanian as the odd airline out in the troika of Mid East carriers. With these trends, and with the availability of attractive suitors, I suspect that Royal Jordanian will unfortunately not be in control of their destiny. IAG is certainly not going to be interested in seeing Royal Jordanian fall into the hands of another Alliance’s Carrier. With Royal Jordanian being the only Alliance Member that is based in the Middle East, it is certainly a valuable jewel.