Era of air liberalisation is over, says IAG boss

Era of air liberalisation is over, says IAG boss

Controls on airlines are becoming more restrictive, not less, and ‘open skies’ is going backwards, according to Willie Walsh, head of British Airways’ parent IAG.

Walsh said: “The regulators should hang their heads in shame. We are in a more regulatory regime than ever.”

He told the Capa (Centre for Aviation) Airlines in Transition conference near Dublin: “It’s nonsense the industry has these ownership restrictions. They should be removed.

“But we’ve reached a point where aviation is as liberalised as it is likely to be and we’re headed backwards.”

Walsh told the conference: “We’ve got a crazy industry that will continue to be crazy. I don’t see a desire to change. No one is going to waste time on it.”

Referring to BA’s Paris-based subsidiary Open Skies, Walsh said: “We launched the Open Skies airline in 2008 to take advantage [of open skies between Europe and the US]. “It still only flies from Paris and still has only three aircraft. It is unable to do what we thought.

“I like to think we could go back and start again, but I don’t think we will. The danger is we go backwards.

Matthew Baldwin, European Commission director of air, aviation and international transport policy, agreed. He said: “The ownership and control issue is stupid, it’s jurassic. It is one reason why this industry is not normal.”

Baldwin said: “In Europe, we have some ownership and control. The problem comes at the [EU] border. We tried to take it further. But we have made no progress.”

Walsh argued: “The rules need to be applied consistently. We are beginning to see that now with the EU questioning the control – not the ownership but control – of Etihad with Air Berlin and Delta [with Virgin Atlantic].”

Etihad is reported to be extending its 29% stake in Air Berlin and Delta Air Lines took a 49% stake in Virgin Atlantic last year.

Former US deputy assistant secretary for transportation John Byerly told the conference: “There is control and there is influence.

“If you are going to put a lot of money into something you are going to want influence. The question is what influence are you going to get without running into trouble with the regulator.

“The jury is out, including on the Etihad investments.”

Baldwin confirmed the EC is looking at four cases including Etihad’s stake in Air Berlin and Delta’s in Virgin Atlantic. He insisted: “We are going to apply the rules consistently. We would be stupid not to.”

But he added: “We have not launched any formal investigation and people should not pre-judge the outcomes if we do investigate. We are looking.”

Sourced from Travel Weekly

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