British Airways boss warns of threat to open skies agreement

British Airways boss warns of threat to open skies agreement

A row between US carriers and Gulf airlines could threaten an open skies agreement that aims to liberalise the rules and regulations of the international aviation industry.

The warning over protectionism came from International Airlines Group chief executive Willie Walsh (pictured) in the British Airways parent company’s annual report.

He also reiterated his interest in Aer Lingus, which remains subject of a £1 billion bid from IAG despite opposition from some quarters in the Irish government.

“We set up IAG with the express purpose of playing a lead role in
the consolidation of our industry,” he said.

“Consolidation remains mostly focused within geographic regions and is likely to remain that way while ownership controls in some markets remain in place.

“We are a long way from the fully deregulated global industry I would like to see. It is also worrying to see protectionism rearing its head again, notably in the US where some carriers complain the open skies arrangements are benefitting non-US airlines, most particularly the Gulf carriers.”

Walsh added: “We continue to look for opportunities, nonetheless, and our success to date has given us the confidence to look
at adding a new airline brand to the business, namely Aer Lingus. Following its own restructuring, the Irish carrier has made impressive progress and it has built a particularly interesting transatlantic network, using Dublin
 as a hub.

“We think its business model fits very neatly with IAG and being part of the group would, we believe, bring big benefits for both Aer Lingus and our shareholders.”

Walsh also warned passengers not to expect lower fares following the sharp fall in oil prices since last summer.

He said that it is “essential we remain focused on profitability and on recovering some of the historic cost 
of higher prices”.

Wals added: “We will continue to offer customers great value for
 money, but that does not mean we will automatically pass on all the benefit we get because some of that return must go to shareholders who have supported us through tougher times and a period of significant investment in new aircraft.”

The report reveals that Walsh’s salary and other benefits came to £6.4 million in 2014, up from almost £5 million in 2013 following the financial turnaround at Spanish arm Iberia.

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