The head of British Airways expects to see further consolidation within the airline industry, and suggested the UK carrier could play a dominant role in that transformation.
Chief executive Willie Walsh believes mergers will benefit the industry, which has struggled in recent years because of increasing terror threats and rising fuel costs. A growing number of industry executives and analysts have touted a reduction in the number of carriers as a way to improve the industry's health.
He said there will be transformative consolidation opportunities, and British Airways will be in a leading role to take advantage of that consolidation.
BA, one of Europe's largest carriers, earlier this year joined a consortium led by US private equity firm TPG Capital to make a bid for Spanish carrier Iberia. The UK airline holds a 10 percent stake in Iberia.
Walsh said BA's review of Iberia's books is progressing more slowly than planned because of difficulties in the financial and credit markets.
He said the deal is still going forward and BA is very excited about potential synergies from the deal.
In the meantime, BA is planning to launch its first direct service between the US and continental European destinations beginning next summer. He described the expansion plan - code-named Project Lauren - as a relatively low-risk opportunity.
Walsh said the airline expects to announce destinations for those new routes later this month. He said BA is looking at airports that are considered primary business destinations.
In September, BA's commercial director said the potential routes to New York could include Paris, Frankfurt and Amsterdam.
The new routes are possible because of the open skies initiative between the US and the European Union, which goes into effect March 30. That deal lets European airlines fly from anywhere in the European Union to any city in the US, and vice versa.
While the agreement will allow BA to boost the number of lucrative trans-Atlantic routes it offers, it will also bring more competition to the carrier's home turf at London's Heathrow Airport, one of the world's busiest airports.
Continental Airlines and Delta Air Lines are planning to begin service from Heathrow next year. Northwest Airlines is also seeking a slot at the airport.
Northwest spokesman said it is interested in serving Heathrow and have talked with its alliance partners about securing a spot.
BA, which generates much of its profit by ferrying business and first-class passengers across the Atlantic, is currently one of just four airlines offering multiple daily non-stop flights between Heathrow and the US. It will be the sole occupant of a new terminal being built at Heathrow that is scheduled to open next year.
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Source: cargonewsasia
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