30 SEPTEMBER 2013

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Article from BTNews 30 SEPTEMBER 2013

COMMENT: War in the Air

Airlines V Airports

It has been something of a week with very senior air transport executives sounding off in spectacular fashion.

Firstly Willie Walsh of IAG on a British Airways inaugural to Chengdu (China) was forced to defend the decision to create IAG. 

Walsh said: "The synergies [with Iberia] are fantastic and that's a long-term structural benefit for us.  Plus, Iberia had to be restructured, and it's easier for us to do it and it's easier to undergo that restructuring in a group such as IAG".  Former BA shareholders have had to prop up Iberia to the tune of nearly £1bn since the conglomerate was created in 2011 and have not taken any dividends.  Some are far from happy saying it should never have happened.  It would have been better as a ‘stand alone’ they claim pointing out that the IAG HQ at the Compass Centre now employs around 100 (expensive) staff duplicating many BA activities.

Questioned by Spanish media, Walsh added: "I wasn’t looking for any help, but I don’t think statements from politicians that are critical of the need to restructure sit well with what needs to happen".

He then had a go at Heathrow and its costs, and by implication the Civil Aviation Authority too.  “Heathrow’s management seems to be incapable of running their business efficiently within a routine cost control environment which is a day-to-day reality for most companies”, said Walsh.  The quiet diplomacy of Lord Marshal seems light years away. 

With Walsh in China firing salvoes, Heathrow’s Chief Executive, Colin Matthews, decided it might be policy to sidetrack the assault, create a diversion and make public a letter to the Davies Commission essentially attacking the non-related Gatwick track record.  “There is no need for a crystal ball to test Gatwick’s claims that it can provide long haul flights when we have the hard evidence of 10 years of failure.  While Heathrow has been full, airline after airline has tried without success to make long haul flights from Gatwick work”, forgetting to mention that it was BAA who owned Gatwick most of the time.  Stewart Wingate the boss of Gatwick says that Matthews is rattled.

Willie Walsh is down to speak to the airports at the Airport Operators Association (AOA) annual conference 21-22 October in London.  It will be interesting to see who turns out for Gatwick and Heathrow.  Will it be all smiles?  Michael O’Leary (reformed) is on the list to utter pearls of wisdom too.  BTN has booked its seat.

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