Post-election indecision will halt airport expansion in south-east, says BA boss
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Version 0 of 1. Post-election indecision will scupper the building of any more runways in the south-east, according to British Airways boss Willie Walsh, despite pledges from the main parties to respond to the Airports Commission’s verdict on expanding Gatwick or Heathrow. Walsh, who is chief executive of BA’s parent company IAG, said there needed to be “political consensus across all the parties – not just coalition partners – before you can have any confidence that anything will come about. I don’t see any evidence of change in the outlook.” He also warned that the cost of the three competing runway schemes – two Heathrow options or Gatwick – would be prohibitive: “The politics of this will be the main stumbling block – not the only one, because the cost of all three options are excessive and would translate into an unacceptable increase in charges at the airports.” Walsh reiterated his stance that there was “no business case” for Gatwick expansion, but said Heathrow would also need to review its proposals. “Heathrow is the most expensive airport around and increasing costs here would be unacceptable to us, so I think they’re going to have to sharpen their pencil and come up with a way to make it more cost-effective.” Walsh declined to endorse a party ahead of the election, but said he did not think the Conservatives were good for business or that the prospect of a Labour-led coalition would affect his company’s economic fortunes. He said: “I’ve been very open in my criticism of all politicians. I don’t take the view that Conservatives are good for business and therefore Labour are bad. We’ve looked at the election and in the totality it’s not going to impact on IAG.” He said devolving decisions on air passenger duty to Scotland and potentially seeing the tax cut should the SNP hold power would benefit BA but would damage airports in the north of England. “If you devolved APD the Scottish economy would benefit but at the expense of the north of England.” Walsh was speaking as the airline group revealed it had for the first time made a profit for the first quarter of the year – traditionally a difficult trading period for European aviation. The group made an operating profit of €25m, compared with a loss of €150m in the same period in 2014. Revenue rose 12% to €4.7bn. BA drove much of the increase but Walsh said sister airline Iberia’s performance was particularly pleasing, with the standing of the brand and customer satisfaction having improved as well as revenue growing and costs being cut. Walsh defended his own 30% pay rise to £6.4m, revealed last month. “I’ve seen my pay increase largely as a result of the increase in the share price ... my base salary has remained the same. The benefit I see is one that all of the shareholders see.” Regarding IAG’s ongoing bid to buy Aer Lingus, Walsh said “constructive” discussions were continuing with the Irish government over its stake. “We’re hoping they will be able to make a decision in relation to their shares in the next couple of weeks ... we’re relatively calm about the timing.” |