"We're still heading into the eye of the storm"
Published: 11 Nov 2008
British Airways' CEO expects consolidation in the airline industry to speed up. The airline itself will be extremely selective in the companies it chooses to team up with.
BA's Willie Walsh forecast more airlines will falter in the coming months as global economic conditions remain tentative. But Walsh said the company will not invest in weakened companies that might put British Airways' financial position at risk.
"Any consolidations that we pursue will serve to strengthen us," Walsh said. "And in this climate, that means a lot of acquisitions go by."
"We're still heading into the eye of the storm – we're not yet coming out the other end," he reportedly said.
According to Reuters, Walsh holds out little hope that the US will open up its air travel market under US President-elect Barack Obama and a Democrat-controlled Congress. European airlines had hoped the second stage of the US/EU Open Skies agreement, now under discussion, would force the US to lift foreign ownership restrictions on its airlines by 2010, and open up domestic routes to overseas carriers.
For its part, BA remains focussed on delivering a small operating profit in the current financial year and sustainable profitability in the medium and long term.
The airline indicated the same as it shared its interim management report for the six months ended September 30.
"The industry continues to face very difficult trading conditions on the back of a weak economic environment. Yield improvements, due mainly to price and exchange, are expected to more than offset volume reductions. Overall we now expect revenue to grow by at least three percent, an increase on our previous guidance of a three percent increase," stated the airline.
"The six month period will be remembered as one of the bleakest on record," Walsh had said. "The period was hit by a crisis in the banking sector, record fuel prices and several airlines going out of business."
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