Controls on airlines are becoming more restrictive not less and ‘open skies’ is going backwards, according to Willie Walsh, chief executive of IAG, parent company of British Airways and Iberia.
Walsh told the Capa (Centre for Aviation) conference in Dublin earlier this month: “The regulators should hang their heads in shame. We are in a more regulatory regime than ever.”
He said: “It is nonsense that the industry has these ownership restrictions. They should be removed. But we’ve reached a point where aviation is as liberalised as it is likely to be and we are headed backwards.”
Walsh told the conference on ‘Airlines in Transition’: “We’ve got a crazy industry that will continue to be crazy. I don’t see a desire to change. No one is going to waste time on it.”
He referred to British Airways’ Paris-based subsidiary Open Skies and said: “We launched the Open Skies airline in 2008 to take advantage of open skies [between Europe and the US]. It still only flies from Paris and still has only three aircraft. It is unable to do what we thought.”
Walsh said: “I like to think we could go back and start again, but I don’t think we will. The danger is we go backwards.”
Matthew Baldwin, European Commission director of air, aviation and international transport policy, agreed, saying: “The ownership and control issue is stupid. It’s Jurassic. It is one reason why this industry is not normal.”
However, Baldwin argued: “The problem comes at the [European Union] border. We tried to take open skies further, but we made no progress.”
Walsh also argued that cross-border rules on ownership “need to be applied consistently”. He said: “We are beginning to see that now with the EU questioning the control – not the ownership but control – of Etihad with Air Berlin and Delta with Virgin Atlantic.” Etihad Airways has been reported to be extending its 29% stake in German carrier Air Berlin and Delta Air Lines took a 49% stake in the UK-based Virgin Atlantic last year.
Former US deputy assistant secretary for transportation John Byerly told the conference: “If you are going to put a lot of money into something you are going to want influence. The question is what influence you are going to get without running into trouble with the regulator.”
Baldwin confirmed the EC is looking at four cases including Etihad’s stake in Air Berlin and Delta’s in Virgin Atlantic. He insisted: “We are going to apply the rules consistently. We would be stupid not to.” But he added: “We have not launched any formal investigation and people should not pre-judge the outcomes if we do investigate.”