IAG chief Walsh confident of EU, UK negotiating air transport deal
February 06 2020 08:53 PM
Walsh: Looking to support consumers in the UK and Europe.
Walsh: Looking to support consumers in the UK and Europe.

International Airline Group (IAG) CEO Willie Walsh said he is confident the European Union and the UK will negotiate a comprehensive air transport agreement as Britain formally exited the union on January 31.

“There is a desire on the part of both sides that air transport continues to deliver the benefits that consumers in the UK and throughout Europe have had as a result of the liberalisation of air transport in Europe. I hope they will engage in constructive and open negotiations to reach a comprehensive air transport agreement,” Walsh said at a panel session at the "Qatar Aviation Aeropolitical and Regulatory Summit 2020" at the Sheraton.

On the Brexit impact on the IAG, which is the parent company of British airways, Aer Lingus and Iberia, among other carriers, Walsh said, “Immediately following Brexit, it has had an impact because of the weakness of pound sterling. Our 2016 results were heavily impacted as we converted our pound earnings into euro.”

“We have not seen any other impact on booking profiles or on customer behaviour – be it in the corporate segment or in the consumer segment.

“The issue for us is the longer-term impact on us because of Brexit. Our belief is that this will not have a material impact on our business.”

In relationship to airline ownership and control, Walsh said, “We have a lot of airlines based outside of the UK. And we have to satisfy the regulators in the countries where we operate, principally, in Spain, France and Austria that our ownership and control are in line with EU regulations. All of the national regulators that we have dealt with have since informed us that they are satisfied. And that our structure is fully complied with the regulations.”

Walsh added, “Clearly, the EU commission had the opportunity to challenge that. But given the process we have gone through, which is quite detailed, and quite extensive, we are satisfied that our structures are robust and that we will continue to stand up to any scrutiny as we move forward.”

Walsh believes that “airframe manufacturers” need to seriously look again at aircraft production rates to more sustainable levels. He suggests that concerns of over-capacity are related to the sales techniques and production plans from the likes of Airbus and Boeing.

He describes current manufacturing levels are “at a speed way in excess of what the industry needs or wants,” and says a “disconnect” between airframe and engine manufacturers has directly influenced delivery delays which “are not just annoying, they have a big financial impact” on airlines.

“We need strong competition between manufacturers. We only have two. I think we have seen both manufacturers have become complacent… They were planning on delivering a lot more aircraft than was required by the industry,” he noted.

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