BA boss Willie Walsh warns of airline closures

 

British Airways supremo Willie Walsh yesterday warned passengers that he expects a string of airlines will go bust this winter.

Mr Walsh, the chief executive of IAG, the owner of British Airways and Iberia, said: “In Europe, there’s clear evidence of weak airlines struggling. The next wave of consolidation will see those airlines go out of business and disappear. Europe will see a number of failures over winter. There are small airlines, and some big ones, with very weak balance sheets and they will struggle to secure investment.”

He said the teetering airlines would not all be minnows, adding “you’ll have heard of all of them,” and he named Alitalia as one that was “clearly in a very difficult position”.

But he said IAG was not looking at buying any other European airlines.

Speaking on board BA’s inaugural flight to Chengdu, China’s fifth-biggest city, Mr Walsh also attacked the Government’s lack of business leadership as he warned the UK was losing out over its “unwelcoming” policy towards Chinese tourists. “In China, the UK’s visa issue remains a major problem,” he said. “Not being in the [shared Europe visa scheme] Schengen means higher costs and bureaucracy for Chinese visitors.” Traffic at Chengdu airport has grown from 5.5 million passengers in 2000 to 32 million last year, and Mr Walsh said government policies were hampering the UK’s chance to capitalise on that growth.

“We would have launched this London to Chengdu route a year ago without the visa obstacles,” he claimed.

“There’s a perception in China that the UK does not want to see Chinese tourists and businesses,” he added. “The Government talks good talk about doing business with China, but it’s one thing saying it and another putting that into action.”

The BA boss claimed Chinese tour operators “bypass the UK on European tours because of the bureaucracy. They say it’s too much hassle to apply for two visas. Other countries are also more welcoming: we need more Mandarin speakers, not just at airports, but at major tourist attractions.”

Some 1.2 million Chinese tourists visited European countries on Schengen visas last year, while fewer than 200,000 flew to the UK.

Mr Walsh said he also believed Britain was missing out on a better trade relationship with China, pointing out that while the Asian powerhouse was now the UK’s eighth-biggest export market “it could be far higher: the principal things China imports are electrical goods and machinery, things the UK is very good at”.

BA could launch the Chengdu route, its third connection between the UK and China, only after it acquired slots at a full-up Heathrow via the purchase of its smaller rival carrier BMI last year. It is the first direct flight between the UK and Chengdu, which has a population of 14 million, and comes eight years after BA launched direct flights to Shanghai.

PM ‘lacks vision for the future’ claims BA chief

Willie Walsh also warned yesterday that aviation in the South-east is set to be another victim of political inertia as he accused David Cameron and George Obsorne of lacking “a vision for the future”. He said the Prime Minister and Chancellor “respond to whatever is topical, rather than setting out an overriding strategy”. Turning to the Davies Commission’s interim report on airport expansion due later this year, Mr Walsh expected “a fantastic report” but that “nothing will happen with it, because it will be handed over to politicians who won’t do anything”.

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