A New Report Suggests IAG Could Lose its License if There's No-Deal Brexit
QUEST: Europe aviation industry is bracing for the impact of Brexit and few airlines would be affected, perhaps like IAG. It's the Anglo-Spanish airline group and it's one of the world's biggest. And a new report suggests it could lose its European operations license in a no-deal scenario. Because you have to remember, IAG owns British Airways, Aer Lingus, Iberia amongst others. Now, the three ones that could have a few tricky difficulties. My next guest runs the -- Luis Gallego runs Iberia, the chairman and chief executive joins me here in the C-suite, good to see you, sir.</s>GALLEGO: Good to see you.</s>QUEST: I realized to some extent this is above your pay grade --</s>GALLEGO: Yes --</s>QUEST: This is at the IAG board level, Willie Walsh's level. But the reality is a no-deal Brexit, your parent company is not less than 50 percent European-owned, so you're going to have a problem or more than.</s>GALLEGO: Yes, well, the thing is that we are confident we are going to reach an agreement because we own CNS and Avio and with aviation, we don't have a way to fly between Europe and U.K., so that's the scenario we are considering right now. And I think realization(ph) of the sector has been very good. A lot of passengers, they have moved between EU and U.K. because of that.</s>QUEST: Because the reality is, if you win on your point, then your sibling British Airways has the opposite problem about ownership of IAG 50 percent one way or the other. So to some extent, damn to do, damn, it could end.</s>GALLEGO: Yes, but as I said before IAG is a company, it's a Spanish company and we have several allocators(ph), the major part of thing in the Europe countries, so the only one that they see in the U.K. is British Airways. That the -- I am sure the European Commission said that even in the unlikely event that we don't have an agreement, we are going to have flights between the EU 27 and</s>U.K. QUEST: On this -- to Iberia itself, Willie, your boss, Willie Walsh is praising hugely the turnaround that you've done, the quality of the new aircraft, the new routes. Who is behind it? Because Iberia used to have a dreadful reputation.</s>GALLEGO: Yes, I think, without -- very well, thanks. But in 2012, we had started the transformation for one of the companies, and as a consequence of that, we have changed the company, we have a new company, their financial results are really good, but not only that, operation is very good on the customer, it's capable.</s>QUEST: And yet, we look at the -- you own your own market, I mean, it's well and truly sliced and diced, isn't it in Spain? Even within the Iberia or within the IAG family, you have yourself, you have Vueling --</s>GALLEGO: Yes --</s>QUEST: And now you have level.</s>GALLEGO: Yes --</s>QUEST: I mean, you're competing against yourself.</s>GALLEGO: No, but we are not competing, I think we are complementary because we have Iberia that we fly long haul, Latin America and also North America. And we have put</s>QUEST: It begs the question, why couldn't Iberia fly those same routes that Level is flying. With all the yield management that you enjoy, benefits versus them. Why create Level?</s>GALLEGO: Because we did the numbers in Iberia and we didn't have -- the course is tried(ph) through that this required to do those flights, so we consider that modern sapphire(ph) aircraft flying from Barcelona with -- I did file a proposal for a customer, it's going to be better for the customer. And we see that we are stimulating their demand there, and I think it's a business model that is working.</s>QUEST: Good to see you, sir.</s>GALLEGO: OK, my pleasure --</s>QUEST: Thank you very much indeed, thank you. The Texas Senate candidate Beto O'Rourke is smashing fundraising records, it still might not be enough to take down Ted Cruz when San Antonio before their debate tonight.