jsled

November 11, 2008
British Airways' chief executive Willie Walsh holds out little hope that the United States will open up its air travel market under US President-elect Barack Obama and a Democrat-controlled Congress.

European airlines had hoped the second stage of the US/EU Open Skies agreement, now under discussion, would force the United States to lift foreign ownership restrictions on its airlines by 2010, and open up domestic routes to overseas carriers.

President George W. Bush supported that goal, but US labor groups and Democrats have opposed the idea, fearing it would mean job losses for financially weak US airlines.

"I wouldn't be very optimistic about making significant progress," said British Airways CEO Willie Walsh, after a presentation to analysts and media in New York, when asked about Open Skies.

"I think it's very clear Obama has taken a strong line in relation to any change in the ownership and control regulations," said Walsh. "So at this point I would not be expecting any major progress to be made."

The first stage of the Open Skies accord, which took effect last year, allowed any carrier to operate from any point in Europe to any point in the United States and vice versa, and opened London's Heathrow Airport to all airlines.

Despite pressure from the Bush administration, Congress has resisted moves to lift the 25 percent cap on foreign ownership in US airlines.

Given those restrictions, British Airways has focused instead on a plan to co-operate with American Airlines on transatlantic flights, although the plan has not yet received approval from US antitrust regulators.

The upcoming change in administration was "neutral" to British Airways' antitrust immunity application, Walsh said.

Walsh was also pessimistic about the state of the global economy, saying the "eye of the storm" was still ahead.

"Economic conditions will remain poor for 18 to 24 months, and consumer confidence in key markets will probably continue to decline," said Walsh. "I don't think we've seen the full effect of job losses yet in some of the major economies."

He said the falling price of oil might mitigate some of the pain, and British Airways was protected by its strong position at Heathrow, one of the world's busiest airports.

He also expects capacity to be taken out of the air travel market as more competitors go out of business, on top of the dozen or so carriers which have exited the business this year.

"How many airlines will fail between now and next winter?" asked Walsh. "I suspect there will be quite a few. That may deal with the necessary capacity reduction that the industry needs to take."

However, he said that his airline had "limited visibility" about trends next year, given the economic turmoil and volatile fuel prices

Molon Labe

Well, after the stellar performance of Duetsche-Post, in it's pseudo takeover of Astar and ABX via DHL, I suspect that foreign ownership of US aircarriers will not be met kindly. 10,000 lost jobs in Wilmington Ohio alone will be a wonderful rallying cry in the battle to keep ownership american.

johnso29

I agree. The DHL situation is a perfect example of why to keep foriegn ownership OUT!

⌐ AV8OR WANNABE

I agree, only US owned airlines have proven to be successful! UAL, USAirways, TWA and others have showed the world how it should be done!

PS. I agree that our airlines should stay majority US owned; I was being sarcastic regarding DHL being used as an example. If so, there are plenty of examples which would prove otherwise, that's all.

johnso29

It's not about foriegn airlines being able to get it done. It's about cabotage, it's about wet leasing airplanes AND crews to US airlines. It's about PROTECTING our jobs. DHL just outsourced 10,000+ jobs, and it effects the US economy. Keep foriegn ownership OUT!