After inheriting a 12.09% stake in International Airlines Group (IAG) from Caja Madrid during its nationalization process, Bankia has sold these shares for 675 million euros at a 176 profit. The deal was carried out by Merill Lynch and was part of the bank's 2012-2015 strategic plan that it unveiled on November 28 at the EU?s request.
In addition to the profits, the divestment significantly changes the balance of power for the international airline company given that Bankia was IAG's primary shareholder and the one group that made sure to defend Iberia's interests.
With the sale comes the loss of an advisor (Manuel Lagares) and leaves SEPI, is Spain's state holding company and the only Spanish ally that still owns a stake in IAG, as a minority shareholder. Bankia's move will directly affect Iberia's negotiations with a pilot union, which is fighting IAG's efforts to cut their salaries and increase their working hours.
Without Bankia's protection, IAG advisor Willie Walsh is likely to make Iberia enact yet more cutbacks, turning the airline into a much smaller company, but a profitable one with room for growth. This option is on the table and could be realized before the end of the summer.
If pilots keep holding out on an agreement, then the IAG could make some cuts and offer co-pilots opportunities to become pilots. This would be a hard but necessary decision to end Iberia's long period of instability caused by a small group of pilots that want to protect their own interests.
