Posts Tagged ‘Willie Walsh’

Airlines ask government to scrap passenger tax

Friday, December 30th, 2011

On 1 January, the emissions trading scheme will begin across Europe as a way of offsetting the amount of carbon dioxide being produced by airlines. The scheme will apply to all airlines land or taking off from airports in the EU. Carriers will have a cap put on the amount of CO2 they are allowed to produce and will have to pay for credits.

In the UK a number of airline bosses have formed an alliance to demand the abolition of the controversial Air Passenger Duty. They are arguing that the tax was originally intended to offset emissions and now that ETS is being introduced it no longer has to serve that purpose.

In a statement IAG boss Willie Walsh, Carolyn McCall from easyJet, Ryanair’s Michael O’Leary and Steve Ridgway of Virgin Atlantic explain that there is no proof that the government has ever used APD to pay for the environment. Currently the Exchequer receives £2.5 billion every year from APD and is hoping to ramp this up to £3.6 billion by the middle of the decade.

The group points out that according to figures compiled by the government, airlines in the UK were already contributing enough money to cover carbon emissions in 2008. APD since then has soared. By 2020 it is estimated that airlines in Britain will be paying around 400 million euros under ETS.

The scheme applies to all airlines visiting airports in Europe and has come under fire from foreign governments who feel the charges do not conform to international legislation.

IAG to increase Heathrow presence through BMI acquisition

Friday, December 23rd, 2011

British Airways parent International Airlines Group looks set to increase its dominance at Heathrow Airport after Lufthansa agrees a £172.5 million deal to sell BMI to the airline. The takeover will now be subject to an examination by the competition regulators, but if allowed, the deal will see IAG acquire an additional 56 landing slots at one of the world’s busiest airports.

Sir Richard Branson, boss of Virgin, has said that he will attempt to block the deal going ahead. Virgin had also signed an agreement with Lufthansa to bid for the troubled airline. Branson said that if IAG were to increase its monopoly at Heathrow it would be damaging, not only to the airline industry and consumer choice, but to the UK as a whole.

IAG chief, Willie Walsh, said that he intends to drastically restructure the airline over the next three years. He added that this would inevitably lead to some of BMI’s 3,600 workers becoming redundant.

Since acquiring BMI, Lufthansa has failed to turn a profit from the Castle Donington-based carrier, and said that in 2010 the airline made a loss of £153 million. Both AIG and Lufthansa are hoping that the tie-up will be completed in the first quarter of next year.

Although the competition authorities in Europe have blocked airline mergers in the past, they have usually done so because there is a potential loss of competition on routes, rather than an increased presence for a carrier at a particular airport. IAG will see its slot allocation rise well above 50 per cent at Heathrow if the deal goes ahead.

APD rise causes BA to announce hiring cut

Wednesday, December 7th, 2011

As the government announces that Air Passenger Duty will go up by 8 per cent from next April, British Airways has said it will be cutting the number of staff it will be taking on in 2012 from 800 to 400. IAG, the parent company of BA, said that the cuts were a direct result of the Chancellor’s decision.

An unprecedented alliance between four of the UK’s largest carriers is calling for the controversial tax to be scrapped. IAG head Willie Walsh, and the bosses of easyJet, Ryanair and Virgin Atlantic are calling on the government to initiate an independent review into the economic impact of APD.

Mr Walsh said that he believed the negative impact of APD on the economy would far outweigh any benefits for the Treasury. Many other airlines are also supporting an abolition of the charge.

A spokesman for the Treasury defended the tax, saying that the airline industry had to do its bit to help the recovery of the UK economy. A spokesman for the prime minister said Downing Street was disappointed that BA would be cutting the number of new jobs it would be creating, adding that APD had brought in around £2.5 billion which was an important contribution to battling the financial deficit.

The government has also pointed out that aviation fuel and domestic flights were not subject to VAT. It also said that a reduction in corporation tax would benefit airlines. As of next year, APD will also apply to those travelling in private jets.

New Transport Secretary not neutral claims Willie Walsh

Monday, October 17th, 2011

Former British Airways boss, and current CEO of International Airlines Group, Willie Walsh, has accused Prime Minister David Cameron of appointing new Transport Secretary Justine Greening as a fireguard against an aviation policy which is detrimental to the British economy. Ms Greening has taken over the top transport position after Philip Hammond filled that vacancy of Defence Secretary left by Liam Fox on Friday.

According to sources at IAG, Mr Walsh is concerned that the MP for Putney will have a conflict of interests. The south-west London constituency is on the flight path to Heathrow. Ms Greening has been a campaigner against any expansion at the UK hub.

Mr Walsh wants to see capacity increased at Heathrow through the construction of a third runway. However, the government, which is presently examining aviation policy, has said that there will be no expansion. The transport department is looking into creating a high-speed rail link between Gatwick and Heathrow which it claims will create a virtual hub.

Mr Walsh recently spoke out against the proposed scheme saying that it would be too expensive and could take years to complete. He has always said that expansion at Heathrow would be funded by airlines, not the tax payer.

Separately, IAG said that Mr Walsh was planning to contact Ms Greening to ask her to do away with air passenger duty. The controversial tax has been blamed for a fall off in tourist numbers and is also said to be damaging business in the UK.

Heath-wick high speed rail link plans revealed

Tuesday, October 11th, 2011

Ministers are considering plans to link Gatwick and Heathrow airports via a high speed railway service. The idea is to create a virtual hub, currently being called Heathwick, which could help to tackle the problem of diminishing capacity at airports in the south east. The trains would travel at up to 180mph meaning the journey time between Heathrow and Gatwick would be just 15 minutes. The project has been budgeted at £5 billion.

The track, which would mostly be underground, would follow the M25 and could stretch beyond Heathrow to RAF Northolt. Gatwick bosses have said that they welcome the scheme and look forward to examining it further. However, BAA, which owns Heathrow, said there were enormous political, technical and financial hurdles to be crossed.

Ryanair and easyJet said they would oppose the project. Both are worried that if a hub is created then low-cost carriers could be forced away from Gatwick. Ryanair boss, Michael O’Leary, dismissed the idea as prohibitively expensive and predicted that it would not be constructed in his lifetime.

Willie Walsh, CEO of International Airlines Group, British Airways’ parent company, said it was almost impossible to say how much the Heathwick project would cost or how long it would take to complete. He added that the government could end up regretting not going forward with constructing another runway at Heathrow.

Boris Johnson has said he will support further examination of the Heathwick proposals. However, the mayor added that he still thinks the best way of increasing capacity in the south east is through the building of a brand new Thames Estuary airport.

British Airways seeks Boeing 747 replacement

Tuesday, September 20th, 2011

British Airways is to look to planemakers Boeing and Airbus for replacements for its fleet of 747 jumbos. The flag carrier has 55 of the older aircraft, the largest number of any airline on the planet. According to Alexander Grant, fleet manager for BA, the carrier will be comparing the merits of the wide-body Airbus A350-1000, the Boeing 787-10 and the Boeing 777-9X.

Talking at a conference being held by the International Society of Transport Aircraft Trading, Mr Grant said that all of the aircraft would be entering into a competition before the end of 2011 so that BA could best assess how to meet the challenges of the future.

Philip Allport, a spokesman for British Airways, said that the carrier currently has five 747s in storage while 50 are in active service. He added that some of those planes would be displaced after BA took delivery of 12 Airbus A380s starting in two year’s time. There are also 24 787-8s and 787-9s on order, although specific delivery dates are yet to be confirmed.

BA’s parent company, International Airlines Group, has ordered eight Airbus A330s in a deal which at list price is worth $1.8 billion. The planes are intended for Iberia, IAG’s Spanish offshoot. Willie Walsh, chief executive of the airline, said that economies of scale will be achieved through further orders.

British Airways’ fleet of 747-400s are capable of carrying 345 passengers in a configuration which accommodates four classes. It is hoped that the new 787-10 will begin to fly commercially by 2016.

British Airways declares interest in BMI Heathrow slots

Monday, September 12th, 2011

German carrier Lufthansa is looking at ways in which it can dispose of struggling subsidiary BMI. The airline has asked investment banks to examine options for breaking up the company or finding a buyer. Lufthansa took control of BMI in 2009, but has been unable to make the carrier profitable.

British Airways has said it would be interested in negotiating for BMI’s slots at Heathrow. Boss of parent company International Airlines Group, Willie Walsh, would like the take off and landing slots as Heathrow continues to stretch to capacity. BA currently controls 42 per cent and any attempt to increase its share is likely to attract the interest of monopoly regulators.

BMI is the second largest holder of slots at the hub with 11 per cent, the value of which was estimated to be in the region of £770 million three year’s ago. IAG, which is presently looking at the possibility of acquiring Portuguese airline TAP, is unlikely to make a bid for BMI itself. A spokesman confirmed that Lufthansa was aware of BA’s interest in the slots and that IAG was now waiting for a response.

In 1999 Lufthansa purchased 20 per cent of BMI. At the time the carrier was supposedly worth around £450 million. However the value dropped to around £96 million after the German flag carrier took control in 2009.

In the first half of this year BMI lost £105 million. Lufthansa has put former executive at Scandinavian Airlines, Vagn Ove Sorensen, in charge of handling the disposal of the airline.

International Airlines Group eyes bmi takeover

Monday, June 13th, 2011

International Airlines Group boss, Willie Walsh, has expressed an interest in taking over bmi if owners Lufthansa are ready to negotiate. Since moving to the top job at IAG from British Airways after the flag carrier merged with Iberia, Mr Walsh has been on the look out for possible mergers or acquisitions. Speaking in Singapore during a summit of the International Air Transport Association, he said he could confirm that IAG is interested in the carrier, but it was really up to Lufthansa.

One of the reasons IAG is interested in bmi is its landing and take-off slots at Heathrow where Walsh’s airline is based. As well as bmi, Mr Walsh also said he was pursuing a tie-up with Japan Airlines within the Oneworld Alliance. Anti-trust regulators have just confirmed approval for a similar deal between Lufthansa and All Nippon Airways.

British Airways also said it planned to work on rebuilding consumer confidence in its brand after an 18-month fight with its cabin crew. This included a total of 22-days of industrial action which is said to have cost the carrier around £150 million.

Relations between the airline and the Unite union appeared to thaw considerably following Mr Walsh’s departure and the arrival of Keith Williams to the chief executive role. Mr Williams said that he had since spent a great deal of time with BA’s cabin crew.

He added that it was now time to show BA’s loyal customers that the troubles are over and that rather than looking to the past the airline was committed to moving forward.

Cabin crew vote on latest BA deal

Monday, May 30th, 2011

British Airways passengers will be crossing their fingers that the longest running industrial dispute at the airline could soon be over. Ballot papers will be sent out to the cabin crew along with a letter from the Unite union’s general secretary, Len McCluskey, recommending a yes vote for the latest deal being offered by BA. The troubles began 18 months ago when cabin crew voted to walk out over pay and staffing issues.

Willie Walsh, the then chief executive, decided to punish those involved by initiating disciplinary action and removing travel perks. This quickly became the focus of the dispute and the latest agreement, put together by the airline’s current boss, Keith Williams, and Unite leader, Len McCluskey, promises to restore the privileges and take the disciplinary cases to Acas.

Cabin crew meeting at Heathrow earlier in the month voted in favour of putting the deal to Unite’s members. The closing date is 22 June. Mr McCluskey said he did not think either side could claim a victory and that the real winner was simple common sense. A positive vote will see the threat of action by crew over the busy summer period lifted.

Fresh hope of a deal between BA and Unite came after changes at the top of both organisations. Willie Walsh, now boss of International Airlines Group, the parent company of BA, has been replaced by Keith Williams and Len McCluskey has taken over from Derek Simpson and Tony Woodley at Unite.

McCluskey described the change in management at BA as a change in psyche.

Qantas unlikely to become a British Airways partner

Friday, May 13th, 2011

Following the collapse of merger negotiations in 2008 between British Airways and Australian carrier Qantas, International Airlines Group chief executive, Willie Walsh, has ruled out the possibility that they will be reopened. He said that, at the time, the synergies between the two flag carriers were ideal, but that leaks about the negotiations had scuppered the process.

At the end of last year, Mr Walsh said IAG would be looking to expand through tie-ups with other international carriers or through takeovers. He added that a list of 12 potential candidates had been drawn up, without releasing further details. Many industry insiders said at the time that Qantas was likely to be high on that list. Other possibilities included American Airlines, Cathay Pacific, Finnair, Japan Airlines and Chilean airline LAN.

Recently, Portugal’s TAP has been mooted as a possible acquisition. Although Mr Walsh denied having any discussions with the Portuguese government about the flag carrier, it is believed that the airline will be put up for sale as the country continues to battle its financial problems.

Mr Walsh predicts that as the price of oil remains high many airlines will be forced to seek partnerships in order to survive. He said that low-cost carriers were most at risk because jet fuel accounted for such a large percentage of their operating costs.

He pointed out that budget airlines were also unable to take advantage of the recovery of the cargo industry and the return of passengers willing to pay for premium class seats.