sandyb123
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IAG / BA Willie Walsh Describes LHR As 'rip-off'

Tue Nov 24, 2015 10:51 pm

IAG Chief Executive Willie Walsh has described LHR as a rip-off.

Quote:
The chief executive of International Airlines Group — whose subsidiaries include British Airways, Iberia and Aer Lingus — insisted that airports charged “far too much” in landing fees, with the scale of charges damaging the aviation industry. Heathrow, Europe’s biggest airport, was already the worst offender, even before it was granted approval to expand, he said.

.

http://www.bmmagazine.co.uk/newswire...arges-much-says-iags-willie-walsh/

Could be mere posturing and BA is LHR 's biggest client protected legally with slots etc, but not great for relationships at the top of Uk aviation!?

Sandyb123
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thekorean
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RE: IAG / BA Willie Walsh Describes LHR As 'rip-off'

Tue Nov 24, 2015 11:04 pm

Supply and demand though? He realizes how limited the supply of slots are at LHR right?
 
kdhurst380
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RE: IAG / BA Willie Walsh Describes LHR As 'rip-off'

Tue Nov 24, 2015 11:04 pm

I see his point. There was all this hoo-ha 6 years ago about disbanding the BAA London airport monopoly so that everyone can compete and ultimately make things cheaper for the end consumer (funny how quickly that minor detail got forgotten eh?), and what we're moving towards is creating that expensive monopoly again.

The only way Heathrow runway 3 can be viable for the consumer is if Gatwick runway 2 (or 3, if we're being technical) can also happen. There is no other way. Either way, we've not got to worry about it for at least the next millennium, such is the pace of decision making in this fine country.
 
factsonly
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RE: IAG / BA Willie Walsh Describes LHR As 'rip-off'

Wed Nov 25, 2015 8:05 am

Quote from the article:

'' The number of passengers flying long-haul in and out of Charles De Gaulle in Paris and Schiphol in Amsterdam increased by 5 per cent in the past year; numbers were up by 9 per cent in Madrid. By comparison, long-haul passengers increased by 3 per cent at Heathrow.

Mr Holland-Kaye (CEO LHR): “New analysis shows that the UK’s European hub rivals are increasing their long-haul seats at twice the rate of the UK’s only hub last year — further evidence that demand at Heathrow is being met by our economic competitors.”

The issue is complex, as:

- 1. Airport charges at LHR are significantly higher than AMS, FRA, CDG, thus providing hub cost advantages to the Continental competitors.

- 2. Lack of LHR runway capacity adds further advantages to AMS, FRA, CDG where some capacity still exists.

- 3. This translates into a broader network of destinations for AMS, FRA, CDG, providing further advantage to Continental hubs.

- 4. This results in significant Leakage of LON and UK traffic to the other hubs and IAG is capitalizing on this by introducing EI/DUB as a competitior to AMS, FRA, CDG.

Here are the summer 2015 airport statistics for the four EURO hubs:

AUGUST 2015 - Movements:

1. AMS - 43.559
2. CDG - 43.452
3. FRA - 42.787
4. LHR - 41.783

At present the ranking of the European hubs is completely re-arranged in peak summer months, a clear sign for future years, as every month AMS continues to outgrow the other three hubs in movements, passengers and cargo.
 
Independence76
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RE: IAG / BA Willie Walsh Describes LHR As 'rip-off'

Wed Nov 25, 2015 8:31 am

Quoting factsonly (Reply 3):
'' The number of passengers flying long-haul in and out of Charles De Gaulle in Paris and Schiphol in Amsterdam increased by 5 per cent in the past year; numbers were up by 9 per cent in Madrid. By comparison, long-haul passengers increased by 3 per cent at Heathrow."

The difference is those airports have room for that growth.

How easily can LHR grow by 5% or 9% in a single year considering its current terminal and runway system?


I don't see it as a fair comparison to his argument, but I'm sure he has other reasons for believing they're a rip-off.
 
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GCT64
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RE: IAG / BA Willie Walsh Describes LHR As 'rip-off'

Wed Nov 25, 2015 11:32 am

London is, by far, the biggest O&D market in Europe and BA has, by far, the largest slot ownership position at the most desirable airport for that market = the best yields in Europe. How exactly is BA being disadvantaged?

Look at BA's financial results versus AFKL or LH.
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ahmetdouas
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RE: IAG / BA Willie Walsh Describes LHR As 'rip-off'

Wed Nov 25, 2015 11:45 am

Quoting Independence76 (Reply 4):

They can grow in terms of passenger numbers by flying in larger aircraft.
 
Tristarsteve
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RE: IAG / BA Willie Walsh Describes LHR As 'rip-off'

Wed Nov 25, 2015 3:49 pm

Quoting gct64 (Reply 5):
How exactly is BA being disadvantaged?

Walsh argument is that BA passengers are going to pay increased fees to pay for the 3rd runway, and the ensuing new slots will be handed out free to BA's competitors.
 
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GCT64
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RE: IAG / BA Willie Walsh Describes LHR As 'rip-off'

Wed Nov 25, 2015 4:01 pm

Quoting Tristarsteve (Reply 7):

Walsh argument is that BA passengers are going to pay increased fees to pay for the 3rd runway, and the ensuing new slots will be handed out free to BA's competitors.

If BA "owned" the customers, one could couch it like that.

Alternatively, one could equally say:

"Passengers are going to pay for a 3rd runway in order that they have more choices, more competition, lower prices (and hopefully fewer delays) in the future"
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BHXLOVER
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RE: IAG / BA Willie Walsh Describes LHR As 'rip-off'

Wed Nov 25, 2015 8:03 pm

Quoting sandyb123 (Thread starter):
IAG Chief Executive Willie Walsh has described LHR as a rip-off.

He always has the option of flying from the more cost effective regional airports....
 
lhrnue
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RE: IAG / BA Willie Walsh Describes LHR As 'rip-off'

Wed Nov 25, 2015 9:08 pm

Airport Commission setup to advise on next runway South East England.
Willie Walsh: Heathrow
Willie Walsh: Heathrow
Willie Walsh: Heathrow
Airport Commission prelim advise in favour of Heathrow
Willie Walsh: Heathrow is a rip off
Willie Walsh: Heathrow is a rip off
Willie Walsh: Heathrow is a rip off
Future: Government decide in favour of Heathrow
Willie Walsh: I am not going to pay for it
Willie Walsh: I am not going to pay for it
Willie Walsh: I am not going to pay for it
 
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thekorean
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RE: IAG / BA Willie Walsh Describes LHR As 'rip-off'

Wed Nov 25, 2015 9:11 pm

Quoting BHXLOVER (Reply 9):

Imagine BA A380 at SEN.... 
 
G-CIVP
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RE: IAG / BA Willie Walsh Describes LHR As 'rip-off'

Wed Nov 25, 2015 9:59 pm

Quoting gct64 (Reply 8):
"Passengers are going to pay for a 3rd runway in order that they have more choices, more competition, lower prices (and hopefully fewer delays) in the future"

Perhaps but as a high percentage of the passengers (say 60-70%) that fly in and out of LHR have their bum on a BA seat, quite rightly Willie Walsh doesn't want BA passengers paying for a third runway which will used by BA's competitors. That would be taking the pi$$.
 
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thekorean
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RE: IAG / BA Willie Walsh Describes LHR As 'rip-off'

Wed Nov 25, 2015 10:01 pm

Quoting G-CIVP (Reply 12):

Wouldn't third runway mean less delays for BA which will benefit their passengers?
 
tortugamon
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RE: IAG / BA Willie Walsh Describes LHR As 'rip-off'

Thu Nov 26, 2015 3:52 am

Quoting thekorean (Reply 1):
He realizes how limited the supply of slots are at LHR right?

No I don't think the ceo of IAG which owns BA realizes that slots at LHR, where the vast majority of his fleet is based, are indeed limited. /sarcasm.

Quoting gct64 (Reply 8):
If BA "owned" the customers, one could couch it like that.
Alternatively, one could equally say:

"Passengers are going to pay for a 3rd runway in order that they have more choices, more competition, lower prices (and hopefully fewer delays) in the future"

Sure but doesn't IAG have about half the flights into LHR? So if you charge a larger tax on flights into LHR you will harm IAG more than their competitors in Europe (FRA, CDG, AMS) who don't have to charge their passengers for additional runways. It puts IAG at a disadvantage for connecting passengers. This is nothing new, its been going on for well over a decade. LHR ownership don't have its airlines or its city's best interest at heart. Not that I would completely expect them to.

Quoting thekorean (Reply 13):
Wouldn't third runway mean less delays for BA which will benefit their passengers?

I think LHR would fill those slots pretty quickly which would mean more traffic on existing taxi-ways which could hurt delays. ORD, for example, after they opened their 10th runways (or something like that) on-time performance actually decreased.

tortugamon
 
rtfm
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RE: IAG / BA Willie Walsh Describes LHR As 'rip-off'

Thu Nov 26, 2015 8:45 pm

Quoting gct64 (Reply 8):
"Passengers are going to pay for a 3rd runway in order that they have more choices, more competition, lower prices (and hopefully fewer delays) in the future"

BA has just over half the LHR slots so will effectively end up funding just over half the cost of the new runway. But under EU slot rules, 50% of the newly available slots have to be offered up to new carriers. (And EasyJet have already expressed an interest...) If the remainder then end up divided up among the existing operators, at best BA would end up with slightly over 25% of the new slots. So why would they want to pay over 50% of the cost for 25% of the benefit and see a big chunk of that benefit go to a short haul rival?

I suspect if you were running IAG/BA you would probably see if from that perspective as well....
 
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TedToToe
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RE: IAG / BA Willie Walsh Describes LHR As 'rip-off'

Thu Nov 26, 2015 10:30 pm

Quoting rtfm (Reply 15):
BA has just over half the LHR slots so will effectively end up funding just over half the cost of the new runway. But under EU slot rules, 50% of the newly available slots have to be offered up to new carriers. (And EasyJet have already expressed an interest...) If the remainder then end up divided up among the existing operators, at best BA would end up with slightly over 25% of the new slots. So why would they want to pay over 50% of the cost for 25% of the benefit and see a big chunk of that benefit go to a short haul rival?

Whilst it is true that BA stands to pay more towards a third runway than others, the calculation is more complex. The funding will not come completely from up front fees. HAL could fund the construction via various sources, including loans, for example. Then, depending on the period of depreciation/amortisation, recover the cost through landing fees etc. for upwards of 15 or 20 years.

Of course, WW is doing exactly as you would expect any CEO to do.

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