An unresolved issue from Brexit negotiations between the UK and the European Union could possibly force International Airlines Group, the owner of British Air and several European carriers to spin off its original home base, British Air.
Under EU law, European airlines must have majority ownership by Europeans, which was not an issue when UK citizens were Europeans. There was even room for 25% of the company’s shares to be owned by the government of Qatar, whose cash was helpful to IAG in its acquisitions, Originally formed in 2011 by merger of BA and Iberia, the company has since acquired Aer Lingus, and Spain’s Vueling, and started a new brand, Level.
The status of IAG is one of the items left open to negotiation in the wake of Brexit, but negotiations have been unsuccessful. IAG has made Madrid its official headquarters, its current chair is Spanish, and there is a majority of Europeans among the IAG board’s non-executive members. It also claims that it meets the shareholder rule, and that Spain and Ireland have both approved the changes made.
The trouble may come if there is a serious push to contest the situation, and the Qatar shares may be what tilts a final ruling against BA, which would then have to separate BA in order to become a fully European company. And, it is widely believed, its two main rivals, AirFrance/KLM and the Lufthansa Group, are pushing for just that.
