British Airways plans to resume some flights in July
British Airways plans to resume a large number of flights in July, but Willie Walsh has said the Covid-19 crisis had made a third runway at Heathrow impossible.
Walsh, the chief executive of BA’s parent company, International Airlines Group (IAG), said its airlines, which also include Ireland’s Aer Lingus and Spain’s Iberia and Vueling, intended to operate about 1,000 flights a day between July and September.
That represents half of the schedule the airline had expected to fly before the crisis forced it to ground almost all of its flights. The group hopes to run about 70% of its previously planned schedule by the final three months of the year, but Walsh said demand was unlikely to recover to 2019 levels before 2023 at the earliest.
Walsh, a longstanding critic of Heathrow’s plans for a third runway, said the crisis had made it impossible to build.
“There isn’t going to be a third runway. If they want to build a third runway they have to acquire Waterside, the British Airways headquarters. I’ll sell it to them tomorrow ... but I don’t expect they’ll be rushing to do a deal,” he said.
Heathrow has won permission from the UK’s supreme court to appeal against a ruling that blocks its plans on the grounds that they did not take into account airlines’ role in worsening the climate crisis.
IAG made a €1.7bn (£1.5bn) loss after tax during the first quarter, compared with a profit of €70m in 2019. The loss included a €1.3bn charge as fuel and currency hedges became worthless, and will be followed by “significantly worse” during the current quarter, IAG said in a statement to the stock market.
The group has halted 94% of its flights in response to travel restrictions during the coronavirus pandemic, causing it to bleed cash.British Airways set out plans last week to make up to 12,000 of its staff redundant.
Walsh said there would be further job cuts at IAG’s other airlines, but he suggested they might be less affected than British Airways, which is more reliant on lucrative business customers.
Leisure travel was expected to bounce back more quickly than business travel, Walsh said, but he rejected the view that the pandemic would prompt a permanent shift by businesses to video-conferencing.
He said the airline backed moves to introduce temperature checks for passengers and mandatory non-medical face coverings, but that leaving the middle seat in aircraft empty was not practical. He also said there would be no recovery in air traffic if the government introduced a 14-day quarantine on new arrivals, as required in some countries.
Walsh also said he backed Gatwick to survive the crisis, despite many of the British Airways job cuts falling at the airport. Gatwick’s future has been cast into doubt after Virgin Atlantic said it would shut its operation at the airport. Norwegian Air Shuttle, another large Gatwick carrier, has only narrowly secured its survival.
IAG has not yet revealed the scale of job cuts planned by Aer Lingus and Vueling at Gatwick, but Walsh said he was confident in the airport’s management.
Walsh will stay on as the group’s chief executive until 24 September, having previously agreed to delay his retirement to help steer it through the Covid-19 crisis. He had been due to retire in March. The Iberia chief executive, Luis Gallego, will take over from Walsh.
IAG also confirmed it had borrowed £300m under the UK coronavirus corporate finance facility, a governmentbacked scheme to help large companies borrow money cheaply. It has also received a £900m loan from the Spanish government and has extended its bank borrowing.
The group’s cash and other readily available funds stood at €10bn at the end of April, giving it a strong buffer, but it is still seeking to make swingeing job cuts and savings, including about 900 at Aer Lingus on top of the 12,000 at BA.
Walsh said: “The operating result up to the end of February was in line with a year ago. However, March’s performance was severely affected by government travel restrictions due to the rapid spread of Covid-19 which significantly impacted demand. Most of the loss made in the quarter occurred in the last two weeks of March.”