By: Carter Copeland & Scott Davis
Is M&A the next leg of BA’s transformation? We think BA is still in the early stages of a once-in-50-year transformation focused on becoming a higher return, lower risk business. Product decisions, pressures on supplier performance and cost, changes in business terms, and the formation of a separate services business, all serve as evidence of the breadth and scale of these efforts. A more aggressive and strategically significant shift in thinking on M&A may serve to complement these efforts and we’re pretty sure it’s already under way (as evidenced by BA’s interest in avionics supplier COL last year). The rumored list of targets and the implied widening of the company’s aperture evident from public commentary suggests to us that big moves could be in store.