British Airways says Spain will win in merger
Spain to be ultimate winner of Government scrapping of Heathrow expansion.
British Airways Plc may use Madrid as its seat of growth in the future.
In the eyes of Willie Walsh, the British Airways chief executive, the government appears to be resistant to developing Heathrow any further which could potentially hinder the airline's growth.
BA is set to merge with Spanish carrier Iberia which will give BA a foot in Spain.
The government’s decision to axe the expansion programme at Heathrow means the runways are now full, Walsh told the Institute of Directors.
As a result, the airline’s planned Spanish merger could allow the airline to exploit Barajas Airport’s four runways, according to Walsh, who said that currently the airport operates only 80 per cent of its capacity.
Walsh also hit out at the increasing rise in air passenger duty (APD) and argued that separate UK airline taxation should come to an end otherwise it could be damaging to the economy as commercial carriers leave the country.
Calling for an end to Air Passenger Duty when airlines join an EU emissions trading scheme in 2012, Willie Walsh said: “APD on longhaul routes will have tripled or even quadrupled in four years. We are in severe danger of pricing large numbers of people out of flying.”
Walsh related how a family of four flying economy class to visit relatives in India had seen APD rise from £160 to £300 in a year.
“We cannot go on layering ever more punitive tax burdens on this industry,” Mr Walsh said, pointing out that global airlines had collectively lost $47bn (£31bn) in the last decade and only been profitable in three of those years.
He noted how the United Nation´s climate committee had recently suggested that the global airline industry pay a $10bn tax as its contribution towards the $100bn a year promised at Copenhagen from developed to developing countries.
