Gonzalo
Topic Author
Posts: 1529
Joined: Tue Aug 23, 2005 2:43 am

Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 12:41 pm

“The weak do not have the right to stay”
“They should be allowed to disappear – that’s what regulators should allow to happen. If you look at the capacity from Spanair, that was replaced overnight by other carriers. With Malev, around 60 per cent of capacity was replaced.
Governments have been concerned in the past about losing access if an airline went under, but those days are over now. If there is demand then the capacity will be replaced.”


http://www.businesstraveller.com/new...ie-walsh-a-let-weak-airlines-faila

Are this words a "subliminal message" or just a fair comment ?

Thoughts ?
Gear Up!!: DC-3 / EMB-110 / Fairchild-227 / Ab318-19-20-21 / B732 / B763 / B789
 
Pe@rson
Posts: 16025
Joined: Sat Jan 13, 2001 6:29 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 12:47 pm

Quoting Gonzalo (Thread starter):
Willie Walsh : "Let Weak Airlines Fail

So IAG is down to BA then (and forthcoming Vueling).   

Quoting Gonzalo (Thread starter):
just a fair comment

Yep.
"Everyone writing for the Telegraph knows that the way to grab eyeballs is with Ryanair and/or sex."
 
tonystan
Posts: 1329
Joined: Sat Jan 07, 2006 7:39 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 12:58 pm

So why didn't be just let Iberia fail?
My views are my own and do not reflect any other person or organisation.
 
User avatar
lightsaber
Crew
Posts: 12030
Joined: Wed Jan 19, 2005 10:55 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 12:59 pm

Quoting Gonzalo (Thread starter):
Governments have been concerned in the past about losing access if an airline went under, but those days are over now. If there is demand then the capacity will be replaced.”

He isn't talking about AI now, is he?   

But he is right. If there is demand, service is replaced quickly. The USA has lost numerous airlines and we manage to continue on.

Lightsaber
"They did not know it was impossible, so they did it!" - Mark Twain
 
sunrisevalley
Posts: 5065
Joined: Tue Jul 06, 2004 3:26 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 1:32 pm

Quoting tonystan (Reply 2):
So why didn't be just let Iberia fail?

Perhaps he is saying indirectly and based on hind sight , that the takeover of IB was a bad move.   
 
spartanmjf
Posts: 459
Joined: Fri Nov 11, 2005 11:31 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 1:38 pm

I don't think he is talking about IB - that was an investment opportunity in which there was/is thought to be a sustainable future. Perhaps he is talking about some European and other 'flag carriers' that continue to go from crisis to crisis.

I mourn the loss of BN, EA, TW, and PA, but in the end they disappeared and life went on. In the United States, perhaps if the PA and BN failure models has been allowed to continue, airline profitability and competition would have been enhanced.
"Nuts to the man in 21D!"
 
eljas
Posts: 35
Joined: Fri Mar 22, 2013 10:01 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 1:59 pm

" "Alliances will not guarantee your success,” he added. “You have to have a robust business yourself and be profitable in your own right."

Perhaps taking a stab at the increasing likelihood of VS joining Skyteam?
 
Gonzalo
Topic Author
Posts: 1529
Joined: Tue Aug 23, 2005 2:43 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 2:14 pm

Quoting sunrisevalley (Reply 4):
I don't think he is talking about IB

Hmmmm... maybe he's not talking about IB as a whole, but "sending a message" to the IB Unions ?   
Gear Up!!: DC-3 / EMB-110 / Fairchild-227 / Ab318-19-20-21 / B732 / B763 / B789
 
LHRFlyer
Posts: 727
Joined: Sun Apr 11, 2010 12:50 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 2:25 pm

Quoting spartanmjf (Reply 5):
I don't think he is talking about IB - that was an investment opportunity in which there was/is thought to be a sustainable future.

And Iberia has not had any form of bailout, internally or externally. IAG was very clear at the outset that its restructuring would have to be funded by itself from its own resources.

Willie Walsh is still very much in favour of industry consolidation:

http://www.bloomberg.com/news/2013-0...s-more-mergers-ceo-walsh-says.html
 
vv701
Posts: 5805
Joined: Fri Aug 19, 2005 10:54 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 3:43 pm

Quoting lightsaber (Reply 3):
He isn't talking about AI now, is he?

He is specifically talking about European airlines, And he is specifically talking about European governments not allowing airlines to go under:

'Walsh said there was no justification for European carriers to receive handouts from their governments because lost capacity would soon be replaced by other airlines if “demand was there”.'

So, no. He is not talking about AI. And although comment about IB is reasonable it is clear that it is commercial and not government activity that is keeping it going. If Walsh sees a future for IB then he is right to make an investment to secure that future. Similarly he is not saying that no commercial organisation or other non-government investor should step in and rescue any failing European airline.

All he is really saying is that EU rules on need to be followed and not worked around.
 
Gonzalo
Topic Author
Posts: 1529
Joined: Tue Aug 23, 2005 2:43 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 3:47 pm

Quoting LHRFlyer (Reply 8):
Willie Walsh is still very much in favour of industry consolidation:

http://www.bloomberg.com/news/2013-0....html

From the link you posted :


"Airline alliances like Oneworld, of which IAG is a leader, exist only because of restrictions on mergers, for which the three main global groupings are a “poor substitute” Walsh said today at the CAPA aviation conference in Powerscourt, Ireland.

This man really knows how to touch some fibers  

In any case, it will be nice if he could say where is, in his view, the red line for trying to save a troubled airline or just let it go.
Gear Up!!: DC-3 / EMB-110 / Fairchild-227 / Ab318-19-20-21 / B732 / B763 / B789
 
goosebayguy
Posts: 555
Joined: Fri Sep 25, 2009 1:12 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 4:05 pm

I don't believe Willie's commenting on IB. I tend to believe that IB might have ultimately failed had it not merged with BA. The merger though has secured IB's future because Walsh will take the necessary action to trim costs keeping IB competitive. Just the medicine IB needs. I'm thinking that he is commenting on Alitalia. LOT etc.
 
User avatar
lightsaber
Crew
Posts: 12030
Joined: Wed Jan 19, 2005 10:55 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 4:54 pm

Quoting LHRFlyer (Reply 8):
IAG was very clear at the outset that its restructuring would have to be funded by itself from its own resources.

   IB will be an interesting 'case study.'

Quoting VV701 (Reply 9):
All he is really saying is that EU rules on need to be followed and not worked around.

Which airlines is he referring to? Which airlines are getting subsidies/relief?

Lightsaber
"They did not know it was impossible, so they did it!" - Mark Twain
 
Summa767
Posts: 1771
Joined: Thu Mar 11, 2004 1:30 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 5:18 pm

Quoting lightsaber (Reply 12):
Which airlines is he referring to? Which airlines are getting subsidies/relief?

SAS and Alitalia come to mind..
The former is undergoing restructuring, and that may work to make it viable.

In the case of IB, I am sure that WW does not regard it as a weak airline, and he knows that if becomes more competitive, it can turn its fortunes around.
 
jayeshrulz
Posts: 349
Joined: Sun Apr 29, 2007 7:36 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 6:03 pm

I'm sure he's talking about Kingfisher Airlines. Wasn't IT was supposed to join OW? But sadly its dead. For now.
Keep flying, because the sky is no limit!
 
avek00
Posts: 3168
Joined: Mon Oct 25, 2004 5:56 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 6:13 pm

Quoting lightsaber (Reply 3):
But he is right.

He's not right, and BA is itself proof of that. No significant airline gets to where it is (be it in good or bad shape) on its own.

Until recently, British Airways was one of the most protected airlines in the world....it's quite rich for a former CEO of that airline to state that airlines be allowed to fail when the British did everything possible to ensure BA could not fail even during its darkest days.

[Edited 2013-04-11 11:13:46]
Live life to the fullest.
 
tonystan
Posts: 1329
Joined: Sat Jan 07, 2006 7:39 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 6:16 pm

Quoting avek00 (Reply 15):

Quoting tonystan (Reply 74):

Until recently, British Airways was one of the most protected airlines in the world....it's quite rich for a former CEO of that airline to state that airlines be allowed to fail when the British did everything possible to ensure BA could not fail even during its darkest days.


Explain!

[Edited 2013-04-11 11:17:34]
My views are my own and do not reflect any other person or organisation.
 
SonomaFlyer
Posts: 1898
Joined: Tue Apr 20, 2010 2:47 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 6:23 pm

Quoting avek00 (Reply 15):
Until recently, British Airways was one of the most protected airlines in the world....it's quite rich for a former CEO of that airline to state that airlines be allowed to fail when the British did everything possible to ensure BA could not fail even during its darkest days.

BA was privatized years ago. It could be considered protected in that it has a strangle hold on slots at LHR but that is due to long running services from that airport and the fact LHR is their only hub.
 
SCQ83
Posts: 3005
Joined: Wed Oct 03, 2012 8:32 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 6:47 pm

A consolidation in Europe is unavoidable. The one country / one carrier is unsustainable for the smaller Eastern European airlines (MALEV, B&H, Armavia... gone; Cyprus on the verge of bankruptcy).

Multiple carriers in large European countries don't have much future either. BMI absorbed by BA, Spanair gone... probably Russia and Germany are the only countries that can support more than one legacy. And in the Geman case, look at AB's shape!!

The model seems to be a major consolidated "legacy" carrier in major economies and pan-European low-costs (Ryanair, easyJet, Wizzair, Vueling, Norwegian...) From a customer perspective, I don't think this consolidation is bad (contrary to the US). Some of those carriers are dinosaurs with an uncompetitive product and pricing. The Hungarian sample is quite good... MALEV was gone and those routes have been largely replaced by Euro legacies with better network/product/prices and Ryanair/Wizzair which offer a way cheaper product (competing against each other in many routes) and started new destinations.
 
User avatar
lightsaber
Crew
Posts: 12030
Joined: Wed Jan 19, 2005 10:55 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 6:53 pm

Quoting SCQ83 (Reply 18):
The one country / one carrier is unsustainable for the smaller Eastern European airlines (MALEV, B&H, Armavia... gone; Cyprus on the verge of bankruptcy).

I would go so far as to suggest that one country/one carrier for larger European nations is not sustainable (e.g., AF/KLM). Or LH buying up European airlines like they're chips.

There needs to be a European wide market with anchors in major hubs.

Lightsaber
"They did not know it was impossible, so they did it!" - Mark Twain
 
avek00
Posts: 3168
Joined: Mon Oct 25, 2004 5:56 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 7:33 pm

Quoting tonystan (Reply 16):
Explain!

No explanation should be necessary, but I'll provide a brief one. Until the latter half of the first decade of the 2000s, British Airways received considerable protection from market forces by a British government policy consensus that limited the ability of potential competitors to challenge BA. The most notable of these arrangements was the Bermuda II air services agreement that governed USA-UK air services, and limited Heathrow access to two US carriers flying to/from select US gateways.

It is the height of irony for a BA head to call for weak airlines to shut down when BA was allowed to operate as a financial basketcase for years on a playing field rigged unabashedly in their favor by their national government. There is absolutely some room for free-market thinking in the airline business, but the notion that international commercial aviation ever was, or presently is, an environment largely governed by market forces is an absurdity unsupported by facts.
Live life to the fullest.
 
User avatar
EK413
Posts: 4391
Joined: Sat Nov 29, 2003 3:11 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 7:41 pm

I guess he doesn't care if BA went under when the airline was in financial trouble "Don't worry VS would pickup the demand over night"...

EK413
Good evening, ladies and gentlemen. We are tonight’s entertainment!
 
User avatar
GCT64
Posts: 1303
Joined: Sun Nov 04, 2007 6:34 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 9:08 pm

Quoting Gonzalo (Reply 10):
"Airline alliances like Oneworld, of which IAG is a leader, exist only because of restrictions on mergers, for which the three main global groupings are a “poor substitute” Walsh said today

I think he is saying he would like to merge IAG and AA and isn't allowed to. It is not exactly "shock horror" news that BA & AA have wanted to get closer for a long time.
Flown in: A30B,A306,A310,A319,A320,A321,A332,A333,A343,A346,A359,A388,BA11,BU31,B190,(..54 more types..),VC10,WESX
 
brilondon
Posts: 3021
Joined: Sun Aug 21, 2005 6:56 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 9:54 pm

Quoting LHRFlyer (Reply 8):
Willie Walsh is still very much in favour of industry consolidation:

Wow!!! He wants the market all for himself, now there is a news bulletin.

I understand where he is coming from. He thinks that airlines need to be able to stand on their own feet and be able to compete without government assistance. Or am I reading things into his comments that were not there.
Rush for ever; Yankees all the way!!
 
Bongodog1964
Posts: 3122
Joined: Wed Oct 18, 2006 6:29 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 10:09 pm

Quoting avek00 (Reply 20):
No explanation should be necessary, but I'll provide a brief one. Until the latter half of the first decade of the 2000s, British Airways received considerable protection from market forces by a British government policy consensus that limited the ability of potential competitors to challenge BA. The most notable of these arrangements was the Bermuda II air services agreement that governed USA-UK air services, and limited Heathrow access to two US carriers flying to/from select US gateways.

BA was privatised in 1984, from that date it has stood on its own. UK government policy was to encourage competition, BA were told that VS would be allowed into LHR in order to provide competition, so no protection here. Bermuda 2 didn't favour BA, it was a neutral treaty that restricted carriers from both the UK and the US to a maximum number of routes from LHR to the US. BA had to fly some US routes from LGW as a result, just as the US airlines did. Meanwhile BA received no protection on any other routes as it wasn't Govt policy to do so. It was the US that wanted to keep Bermuda 2
 
boysteve
Posts: 887
Joined: Sun Apr 25, 2004 7:02 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 10:14 pm

Quoting avek00 (Reply 20):

No explanation should be necessary, but I'll provide a brief one. Until the latter half of the first decade of the 2000s, British Airways received considerable protection from market forces by a British government policy consensus that limited the ability of potential competitors to challenge BA. The most notable of these arrangements was the Bermuda II air services agreement that governed USA-UK air services, and limited Heathrow access to two US carriers flying to/from select US gateways.

It is the height of irony for a BA head to call for weak airlines to shut down when BA was allowed to operate as a financial basketcase for years on a playing field rigged unabashedly in their favor by their national government. There is absolutely some room for free-market thinking in the airline business, but the notion that international commercial aviation ever was, or presently is, an environment largely governed by market forces is an absurdity unsupported by facts.

I think you need to calm down. At BA Willie Walsh never supported Bermuda II and neither has BA for a long while, therfore he is free to voice his opinion with being abused for whatever the situation may have been 40 years ago! For 20 years or so BA wanted the rules changed to allow them to get into bed with AA first and foremost. BA had problems many years ago but no-one currently present at BA was part of that. BA has stood on it's own two feet for many years and long before airlines such as AF stopped receiving state subsidies. Chill, the bloke is not out of order for having an opinion. Disgaree with it rationally of course, but don't attack him for having a brain.
 
tonystan
Posts: 1329
Joined: Sat Jan 07, 2006 7:39 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 10:34 pm

Post privatisation in 1984 BA restructured and quickly became anything but a basket case!!!!
My views are my own and do not reflect any other person or organisation.
 
airproxx
Posts: 406
Joined: Sat Jun 21, 2008 7:07 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Thu Apr 11, 2013 11:39 pm

Quoting EK413 (Reply 21):
I guess he doesn't care if BA went under when the airline was in financial trouble "Don't worry VS would pickup the demand over night"...

This is exactly what I thought!
I can not imagine that Mr. Walsh could consider the possibility of applying such a policy to its own group ....
If you can meet with triumph and disaster, and treat those two impostors just the same
 
BlueSky1976
Posts: 1609
Joined: Tue Jul 20, 2004 9:18 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Fri Apr 12, 2013 3:57 am

Fair and true comment. I can definitely agree with it, especially in context of seeing what is going on at one of the prime examples of mismanaged so-called "national treasure carriers" at my home country, Lot Polish Airlines.
POLAND IS UNDER DICTATORSHIP. PLEASE SUPPORT COMMITTEE FOR DEFENSE OF DEMOCRACY, K.O.D.
 
goosebayguy
Posts: 555
Joined: Fri Sep 25, 2009 1:12 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Fri Apr 12, 2013 5:25 am

Quoting avek00 (Reply 20):
No explanation should be necessary, but I'll provide a brief one. Until the latter half of the first decade of the 2000s, British Airways received considerable protection from market forces by a British government policy consensus that limited the ability of potential competitors to challenge BA. The most notable of these arrangements was the Bermuda II air services agreement that governed USA-UK air services, and limited Heathrow access to two US carriers flying to/from select US gateways.

Its not really that simple. If I recall correctly those two American airlines had rights to further flights in Europe. That was never allowed in the USA to BA. BA has not had direct public money since the 1980's whereas many American carriers have. Yes BA has most of the slots at LHR but then other airlines have similar at their home airports. LH have more at Frankfurt etc. American airlines are the same with their hubs.
 
RyanairGuru
Posts: 6554
Joined: Wed Nov 01, 2006 3:59 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Fri Apr 12, 2013 5:33 am

Quoting Bongodog1964 (Reply 24):
It was the US that wanted to keep Bermuda 2

  

I'm legitimately intrigued by the revisionist version of history being pushed above. BA has not been "protected" since before Thatcher.

Quoting EK413 (Reply 21):
I guess he doesn't care if BA went under when the airline was in financial trouble "Don't worry VS would pickup the demand over night"

But if BA failed it would be due to poor management, not because the UK government refused to subsidise it. Therefore, yes, that would be a perfect example of what he would want.

Quoting airproxx (Reply 27):
I can not imagine that Mr. Walsh could consider the possibility of applying such a policy to its own group ....

I disagree. He would sooner close IB down than go cap-in-hand to the Spanish government. Ditto BA.
Worked Hard, Flew Right
 
jumpjets
Posts: 1142
Joined: Tue Apr 10, 2012 2:17 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Fri Apr 12, 2013 9:34 am

Just wondering where Chapter 11 bankruptcy protection fits into this scenario - I don't pretend to understand how this works but it seems to me that a large badly run company can be protected from its legal obligations at the expense of other often smaller businesses who have been foolhardy enough to do business with them. Once the dead wood has been pruned a new business emerges stronger and better - maybe not a bad thing but if we are to chastise BA for being state supported some 20 yrs ago I think its fair to bring this into the debate.

I know its not simply there to protect Airlines but any MBAs out there like to hypothesise what would have happened to the US airline industry if [like here in the UK] Chapter 11 hadn't existed.
 
blueflyer
Posts: 3697
Joined: Tue Jan 31, 2006 4:17 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Fri Apr 12, 2013 9:44 am

Quoting SonomaFlyer (Reply 17):
It could be considered protected in that it has a strangle hold on slots at LHR but that is due to long running services from that airport and the fact LHR is their only hub.

Air France, KLM and Lufthansa have a bigger share of the slots/traffic at their respective home airports than BA does at LHR...
Democracy 2016: 3 million California votes < 100,000 Midwest votes.
 
Viscount724
Posts: 19287
Joined: Thu Oct 12, 2006 7:32 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Fri Apr 12, 2013 10:12 am

Quoting avek00 (Reply 20):
Quoting tonystan (Reply 16):Explain!
No explanation should be necessary, but I'll provide a brief one. Until the latter half of the first decade of the 2000s, British Airways received considerable protection from market forces by a British government policy consensus that limited the ability of potential competitors to challenge BA. The most notable of these arrangements was the Bermuda II air services agreement that governed USA-UK air services, and limited Heathrow access to two US carriers flying to/from select US gateways.

LHR-USA access was also restricted to 2 British carriers, and they only had rights to select US destinations.
 
User avatar
par13del
Posts: 6720
Joined: Sun Dec 18, 2005 9:14 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Fri Apr 12, 2013 10:30 am

Quoting jumpjets (Reply 31):
I know its not simply there to protect Airlines but any MBAs out there like to hypothesise what would have happened to the US airline industry if [like here in the UK] Chapter 11 hadn't existed.

From a tax payor perspective, not much, from private industry, well either the pieces of the fallen carriers would have been picked up much cheaper or other carriers who have grown much quicker. Carriers like WN and Spirit may be larger as the oppertunity to create and grow would have appeared much sooner, heck they may even have
One thing overlooked in Chpt.11 is the source of funds, it's not tax payor money but private industry money. Investors have been there for most of the troubled carriers, they were not for EA, PanAm, TWA or a few other's so they are gone.
UA, CO, DL had investors and AA sold everything to ensure that they had enough funds to operate in Chpt.11 while they looked for investors so....
 
airproxx
Posts: 406
Joined: Sat Jun 21, 2008 7:07 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Fri Apr 12, 2013 11:42 am

Quoting RyanairGuru (Reply 30):

I disagree. He would sooner close IB down than go cap-in-hand to the Spanish government. Ditto BA.

Yes, but would he apply the same policy if BA itself was in danger?

That said, I agree with him. The highly subsidized companies become mechanically uncompetitive and lose their service obligation and profitability. This state of mind is felt into employee behavior, and it becomes extremely difficult to retrieve a commitment to excellence. This is my personal reproach to AF, and it's true that BA is more in the tradition of companies that know how to question themselves.

Cultural thing probably ...
If you can meet with triumph and disaster, and treat those two impostors just the same
 
Rdh3e
Posts: 2883
Joined: Wed Mar 30, 2011 2:09 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Fri Apr 12, 2013 4:38 pm

Quoting GCT64 (Reply 22):
I think he is saying he would like to merge IAG and AA and isn't allowed to. It is not exactly "shock horror" news that BA & AA have wanted to get closer for a long time.

I think we will some day see a world where this is possible and you'll have BA/IB/AA/QF/JL, DL/AF/KL/KE , UA/LH/NH/SQ.

[Edited 2013-04-12 09:38:35]
 
delta2ual
Posts: 558
Joined: Mon Dec 03, 2007 11:18 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Fri Apr 12, 2013 4:51 pm

At the end of the day, we would be hard pressed to find any airline in the world that did not receive some sort of help from their respective government at some time in their history.
From the world's largest airline-to the world's largest airline. Delta2ual
 
User avatar
mayor
Posts: 6218
Joined: Sun Mar 09, 2008 3:58 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Fri Apr 12, 2013 4:59 pm

Would not WW's pronouncement apply to their ATI partner, AA?  
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
 
slider
Posts: 6817
Joined: Wed Feb 25, 2004 11:42 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Fri Apr 12, 2013 7:01 pm

Quoting Bongodog1964 (Reply 24):
BA was privatised in 1984, from that date it has stood on its own. UK government policy was to encourage competition, BA were told that VS would be allowed into LHR in order to provide competition, so no protection here. Bermuda 2 didn't favour BA, it was a neutral treaty that restricted carriers from both the UK and the US to a maximum number of routes from LHR to the US. BA had to fly some US routes from LGW as a result, just as the US airlines did. Meanwhile BA received no protection on any other routes as it wasn't Govt policy to do so. It was the US that wanted to keep Bermuda 2

Thanks to Margaret Thatcher, I might add. Had she not had the prescience to force privatization of BA, they'd have really cratered I think. There was still some protectionism given the lack of opening up LHR, but there's plenty of blame to go around on that one.

Walsh's orginal comment is spot on though.
 
vv701
Posts: 5805
Joined: Fri Aug 19, 2005 10:54 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Fri Apr 12, 2013 7:27 pm

Quoting jayeshrulz (Reply 14):
I'm sure he's talking about Kingfisher Airlines.

Sorry to be repetitive but he said he was talking about European airlines:

"Walsh said there was no justification for European carriers to receive handouts from their governments because lost capacity would soon be replaced by other airlines if %u201Cdemand was there%u201D.

Quoting avek00 (Reply 20):
No explanation should be necessary, but I'll provide a brief one. Until the latter half of the first decade of the 2000s, British Airways received considerable protection from market forces by a British government policy consensus that limited the ability of potential competitors to challenge BA. The most notable of these arrangements was the Bermuda II air services agreement that governed USA-UK air services, and limited Heathrow access to two US carriers flying to/from select US gateways.

Incorrect. Since 1993 EU Civil Aviation Competition has been controlled by the European Commission and not by the national governments within the EU. This has been essential as the EU is a single commercial aviation market. Even the distribution of slots at LHR and competition matters like the IAG purchase of BD have been matters for the EC and not the British Competition Authorities. So to assert that the British government has protected BA from competition "until the latter half of the first decade of the 2000s" could not be further from the truth. It would have been illegal.

This all ensures a highly competitive market. For example it enabled an Irish airline, FR, to establish bases throughout Europe. Their largest is at London Stansted Airport (STN). During Summer Season 2012 FR operated a total of 1,774 flights to and from 115 different short haul destinations out of STN. Clearly the establishment of such an operation did not protect BA from competition.
 
avek00
Posts: 3168
Joined: Mon Oct 25, 2004 5:56 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Fri Apr 12, 2013 8:59 pm

Quoting Viscount724 (Reply 33):
LHR-USA access was also restricted to 2 British carriers, and they only had rights to select US destinations.

So? Bermuda II was, on balance, heavily weighted in favor of the British side, affording competitive protections to British Airways until it was superceded by the US-EU Open Skies deal in the second half of the first decade of the 2000s.
Live life to the fullest.
 
Bongodog1964
Posts: 3122
Joined: Wed Oct 18, 2006 6:29 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Fri Apr 12, 2013 9:22 pm

Quoting avek00 (Reply 41):

So? Bermuda II was, on balance, heavily weighted in favor of the British side, affording competitive protections to British Airways until it was superceded by the US-EU Open Skies deal in the second half of the first decade of the 2000s.

The main beneficiaries of Bermuda 2 were AA and UA. They had their access to LHR with all other US airlines sent down the road to LGW, BA and VS were only allowed a set number of US gateways between them I recall it was either 15 or 16, and had to operate their other US routes from LGW.

Your interpretation is highly inaccurate.
 
Rdh3e
Posts: 2883
Joined: Wed Mar 30, 2011 2:09 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Fri Apr 12, 2013 10:18 pm

Quoting VV701 (Reply 40):
1,774 flights to and from 115 different short haul destinations out of STN

Each day??? That would mean that between the hours of 6am-10pm (rough estimate) they had a flight departing or arriving every 33 seconds.
 
vv701
Posts: 5805
Joined: Fri Aug 19, 2005 10:54 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Sat Apr 13, 2013 2:22 pm

Quoting RDH3E (Reply 43):
Each day???

I said

Quoting VV701 (Reply 40):
During Summer Season 2012 FR operated a total of 1,774 flights to and from 115 different short haul destinations out of STN.


So, no. The (IATA) Summer Season is always EVERY day between the last Saturday in March and the last Sunday in October . In 2012 it was all those days between 1 April and 27 October inclusive. So FR operated 1,774 flights into and out of STN during Summer Season 2012 that was 210 days long.
 
sweair
Posts: 1816
Joined: Sun Nov 20, 2011 9:59 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Sat Apr 13, 2013 2:46 pm

DY is just waiting for SK to go away, why would they order so many aircraft otherwise..   SK would be replaced by LH, BA and DY in a few weeks.
 
vv701
Posts: 5805
Joined: Fri Aug 19, 2005 10:54 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Sun Apr 14, 2013 10:19 am

Quoting VV701 (Reply 44):
So FR operated 1,774 flights into and out of STN during Summer Season 2012 that was 210 days long.

Sorry. Got it all wrong. Cannot even see where I got the number "1,744" from.

The actual number of flights scheduled to be operated by FR in and out of STN during the current (2013) 210 day Summer Season is 52,650. Last summer over the same period it was 51,882. Again my apologies.
 
jfk777
Posts: 5954
Joined: Tue Aug 22, 2006 7:23 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Mon Apr 15, 2013 12:14 pm

Quoting avek00 (Reply 15):
Until recently, British Airways was one of the most protected airlines in the world....it's quite rich for a former CEO of that airline to state that airlines be allowed to fail when the British did everything possible to ensure BA could not fail even during its darkest days.

30 years ago was a different time, almost all Flag airlines were still government owned or only recently privatized.

Quoting Bongodog1964 (Reply 24):
BA was privatised in 1984, from that date it has stood on its own. UK government policy was to encourage competition, BA were told that VS would be allowed into LHR in order to provide competition, so no protection here. Bermuda 2 didn't favour BA, it was a neutral treaty that restricted carriers from both the UK and the US to a maximum number of routes from LHR to the US. BA had to fly some US routes from LGW as a result, just as the US airlines did. Meanwhile BA received no protection on any other routes as it wasn't Govt policy to do so. It was the US that wanted to keep Bermuda 2

The Bermuda 2 may have been "nuetral" as it applied to British Airways, TWA and Pan AM but the UK had no second airline until 1991 when AA and UA replaced PA and TWA at LHR, every UK airline until then was "Gatwicked"; Virgin, B Caledonian and Laker. BA was protected against other UK airlines at LHR except for BMI. which flew only domestically. There was a third US airline at LHR before the 1977 Bermuda 2 treaty, it was Miami based National Airlines. The USA made a lousy 11th hour deal for the Bermuda 2 in 1977, the Brits waited until the very past moment to make a deal knowing they could get Jimmy Carter, he had to get Delta rights to London from Atlanta. DL would have to use LGW not LHR. The Bermuda 2 lasted 30 years, the US airlines controlled about 70 % of the flights in the 1970's by 2008 BA and Virgin had about 60 % of the market.

The British Government even tried to "Gatwick" Air Canada, the Canadians politely declined the UK's offer to be "Gatwicked".
 
Quokkas
Posts: 1327
Joined: Fri Jan 27, 2012 5:51 pm

RE: Willie Walsh : "Let Weak Airlines Fail"

Mon Apr 15, 2013 12:55 pm

Quoting slider (Reply 39):
There was still some protectionism given the lack of opening up LHR,

Please could you expand on that point. I am not disputing it but am not sure what you mean by it.

As far as I understand, the airport itself is owned by Heathrow Airport Holdings, which in turn is owned by a consortium that includes, among others, the Caisse de dépôt et placement du Québec (a Canadian investment body), the Government of Singapore's Special Investments Corporation and Ferrovia of Spain. While the airport raises money from landing fees, etc, how much it charges is limited by Regulation but they can not discriminate between airlines.

As far as I understand, slot allocation is not controlled by Heathrow Airport Holdings but a separate company, ACL. BA isone of the major members of this company but not the only one and, according to the company blurb, any airline is free to join. The company does claim to be independent but in the sense of not being a government entity. I can see how BA being a major member of ACL might possibly give it an advantage but I have no knowledge of whether it actually does.

I may be wrong in my understanding and I note that you did use the word "was", suggesting past tense. But do you think that there still may be some residual protectionism and if so, of what kind?
“Not to laugh, not to cry, not to hate, but understand.” Spinoza
 
jfk777
Posts: 5954
Joined: Tue Aug 22, 2006 7:23 am

RE: Willie Walsh : "Let Weak Airlines Fail"

Mon Apr 15, 2013 1:47 pm

Quoting Quokkas (Reply 48):
As far as I understand, slot allocation is not controlled by Heathrow Airport Holdings but a separate company, ACL. BA isone of the major members of this company but not the only one and, according to the company blurb, any airline is free to join. The company does claim to be independent but in the sense of not being a government entity. I can see how BA being a major

ACL does control the Heathrow slot allocations. But the market is really about demand and lack of supply, why else would Continental have paid $ 200 million for 4 slots pairs. The influx of alliances, the big 3 Middle East airlines and Lufthansa's merger with BMI changed the slot landscape. LH kept many BMI slots for its own group of airlines, by the time BMI was sold to BA it had about 50% of the slots when LH purchased it from SMB. LHR slots are very valuable and continue to be sold all the time, recently JET Airwys of India sold 3 to Etihad Air.

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos