Europe: December 2008 Archives

I used London Heathrow's Terminal 5 for the first time as a passenger earlier this week and I feel compelled to report that despite the terrible headlines surrounding its chaotic opening earlier this year, I found it to be a pleasant and stress-free experience.

My only experience of T5 up until now had been a tour of the facility as it was under construction, which I blogged about here, and the cover interview I did with British Airways chief executive Willie Walsh, which took place in one of the T5 lounges a couple of months before it opened to the public.

With a little trepidation and carrying hand baggage only (I didn't want to take any chances!) I arrived at T5 on Monday to check in for a flight to Geneva. I didn't have to queue at all to collect my boarding pass from one of the many self-service kiosks, and the line at security was minimal.

Once I got through to the other side, I kept having to remind myself that I was at Heathrow. It felt light, airy and modern, and there was not a vile green flecked carpet anywhere in sight.

My flight left on time with no hitches, and my flight back the following day actually landed ahead of schedule, which the pilot felt compelled to keep pointing out.

The disasterous opening of T5 in March damaged BA's reputation and it was clear from the pilot's repeated reminders that we had landed ahead of schedule that the carrier and its staff are under strict instructions to win back passenger trust and salvage BA's reputation.

Next time, maybe I'll risk checking in some baggage and see if I get it back! 

This month Airline Business has been to Oslo to meet Norwegian chief executive Bjorn Kjos. These are busy times for Norwegian. The fast-growing budget carrier has no sooner finished restructuring its Swedish operations, than it is embarking on an expansion at Copenhagen to take advantage of the demise of Danish budget operator Sterling. Its urgent need for capacity to operate the new routes pushed back plans to accelerate the withdrawal of the MD-80s it inherited through the acquisition of FlyNordic last year. As part of restructuring efforts, Norwegian was in the process of returning these aircraft to the lessors ahead of the original late 2009 return date. But having returned half this fleet, it will retain four of these until September next year.

You can read the full interview in our forthcoming January issue. Although it is only our first issue of the year, I will already bet there won't be a better backdrop for photos in 2009. The omens were not great when we arrived at Norwegian's office at Oslo's old airport at Fornebu, offices which probably aren't going to win any design awards. Is there anywhere that might make quite a nice backdrop for pictures we asked? Well we have the sea just a couple of minutes drive from here says Kjos. At a stretch, a ten minute drive from our offices might get us as far as the big DIY Superstore. But just two minutes away from Norwegian's offices we found, well, see for yourself with a quick taster...

Of course we were helped by the layer of snow and the setting sun (all part of the plan our photographer Tom assures me!), but it sets the bar high for the year to come. So can anyone do better? Welcome to the inaugural award for the most stunning backdrop within a two minute drive of an airline's office...

Iberia CEO Fernando Conte was in London yesterday at an extremely opportune - and accidental - time. He was giving a long arranged speech that turned out to be just a day before its suitor British Airways announced it was eyeing a deal with Australia's Qantas Airways.

BA and Iberia have been exploring a merger for some months.

So when did Conte find out that BA was also talking to Qantas, asked my colleague Kevin Done from the FT? "I knew it one hour before it was published. BA CEO Willie Walsh called me and informed me of the discussions," he told the audience at the Aviation Club.

Conte seemed relatively unruffled, but he was ready for the question. So, does it matter that BA is talking mergers with two carriers at once, albeit they are in different continents?

In some ways probably not, but the inference in the question is: can BA actually run two large mergers at once, and is it a question of either/or?

Conte himself has been courting and been courted for some time. "One year ago we were in discussions with many [potential] partners," he told the press throng.

He knows the value of Iberia, describing it as "very attractive" because of its solid balance sheet and strong market position on the South and Latin American markets.

Conte has been looking for partners in the Latin region for some years, but as no deal has ever come forth he's clearly not found the right one there.

Now his attention is focused on BA, and he must feel the Qantas news is a unwanted distraction.

His view on the sequencing of consolidation is clear, as I wrote in this story for our sister online news service Air Transport Intelligence:

Regional mergers will come first, says Iberia CEO Conte

While he believes that global consolidation will arrive eventually, Iberia chief executive Fernando Conte said that for the time being the more realistic possibility of mergers is within continents.

"The fact is that if you want to do something between two different continents today it is too complex," he said. Conte was speaking at the UK's Aviation Club in London the day after merger talks between British Airway and Qantas Airways were announced. BA and Iberia are also several months into their own merger talks.

Consolidation in Europe has been successfully achieved, he said. "It has been done within the region and that has been proved - we haven't proved anything besides that," he said, referring to the prospect of global consolidation.

"We can say that the merger between BA and Iberia, if it takes place, will be one of the most important steps in the consolidation process of the European airline industry, and probably will set the scenario for a more global one," he said.

He denied that for BA it was a case of "either/or" when it came to finalising a large merger deal with either Iberia or Qantas.

Read the Airline Business cover interview with Willie Walsh from earlier this year.

Ryanair is proving to be extremely persistent in its pursuit of would-be life partner, the reluctant Aer Lingus.

After having its amorous advances quashed by both Aer Lingus and the European Commission last year, an undeterred Ryanair has made a fresh approach, this time flatteringly offering to acquire Aer Lingus for half what it offered the last time around. There's nothing like making someone feel good about themself!

Aer Lingus appears to be continuing to play hard to get, offering no public comment apart from to urge its shareholders to take no action.

But it looks like Ryanair is ready to play hard ball, with the carrier's chief executive Michael O'Leary telling Aer Lingus that it is "isolated" - for that read "on the shelf" or "spinster" - and "uncompetitive", and has "few realistic third-party alternatives". In other words, "no one else wants you, you old boiler. This is the best offer you're gonna get".

Ryanair claims that if it succeeds in taking over Aer Lingus, the resulting airline would be "one of Europe's 'big four'". Presumably it classes British Airways, Air France-KLM and Lufthansa as the other three big hitters, and is keen to follow their lead and jump on the acquisition trail.

It'll be interesting to see what becomes of Ryanair's latest bid. Will the two rivals end up together after such a tumultuous courtship? And if they don't, what, realistically, are Aer Lingus' chances of survival?