Willie calls in the New Year

BA’s traditional New Year reception for the press was early this year. Yesterday in fact in a very frozen London at a warmer Langhan’s Brasserie in Piccadilly.

 

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The airline’s ever chirpy chief executive Willie Walsh thanked the assembled media for the volume of column inches (web inches?) they devoted to the airline in 2008. His tongue was a little bit in his cheek as 2008 of course contained the London Heathrow T5 opening debacle, covered so eloquently by my colleague Kerry Ezard.

“I use to count up to it,” said Willie, of the countdown to the opening of T5. “Now I count away from it.” The countaway stands at something over 280 days.

The airline was “rightly criticised” for the T5 affair, but “it is now performed better than expected” and has handled some 16 million customers, said Willie.

T5 is rather cool in my experience, although I must confess I spent most of it in the BA lounge so I’m heavily biased. Here’s what Kerry thought about it.

OUTLOOK

Willie is understandably downbeat about the prospects for this year: “2009 is looking like a difficult environment, not just for airlines but for all industries”. It is however an environment when radical changes can take place. “We will use this as an opportunity to transform and strengthen BA,” said Walsh.

BA and Walsh have a packed early year agenda which is not just about coping with the recession. The airline launches a rare new route in a couple of weeks. This one is to Hyderabad in India.

Later this year it will launch its Airbus A318 service from London City Airport to New York. “Late summer” is the timing, said Walsh.

He repeated his belief that more airlines will go bust in the coming months and that there could be “potentially be other opportunities as well” when it comes to potential acquisitions.

At present BA is locked in talks with Iberia about their proposed merger, which Walsh is confident will happen, but is being held up over the valuation of BA’s pension fund.

The Qantas merger idea is gone for now. The Australian carrier approached BA about the idea but backed off against political and media resistance at home.

Alitalia is also off the cards. Walsh was interested in a commercial deal with the new Italian carriers but not about putting money in.

Asked if a merger with Iberia and the OK for the American Airlines pact would be a good result for him in 2009, Walsh joked that “you [the media] would say ‘is that all!’”.

But BA will continue to be “picky” about who it will and won’t talk to. “I could find six airlines this afternoon” that would be interested in selling out to BA, but sounded a warning that buying competitors has risks, pointing to Swissair’s acquisition strategy in the late 1990s that led to the downfall of this once proud carrier.

To read what Willie said at his 2008 New Year do check out my blog from last January.

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