British Airways’ ‘fight for survival’ is over - Times Online
Willie Walsh, the chief executive of British Airways, has signalled that the immediate crisis facing the airline has receded and it is no longer in a “fight for survival”.
He added that the airline’s merger with Iberia should be completed before the end of the year. Mr Walsh has also expressed an interest in buying bmi, the former British Midland, from Lufthansa, although no formal talks have been held.
The BA boss was speaking aboard BA001, the new business-class only service launched on Tuesday, from London City airport to New York, whose operation yesterday was delayed because of an engine fault.
Mr Walsh said: “I think we have done what needed to be done to address the immediate crisis we faced. Strengthening our cash position was a critical issue and we are taking the right steps to profitability. The situation is no longer as critical.”
His bullish outlook for the talks between BA and Iberia, the Spanish flag carrier, comes despite 14 months of difficult negotiations.
Mr Walsh warned in June that BA faced a fight for survival after the carrier lost £401 million the previous year and was burning through cash reserves at about £1 million a day.
Since then, BA has raised £680 million, cut costs and launched an aggressive pricing strategy.
BA raised money from investors in July via a convertible bond in order to bolster its balance sheet. The carrier has also cut capacity so its aircraft are flying fuller and is reducing costs, eliminating 1,450 jobs since the end of the last financial year.
However, Mr Walsh played down any suggestion that BA was entering a recovery phase. He pointed out that the International Air Transport Association (IATA) recently increased its estimate of how much global airlines will lose this year to $11 billion.
“We’re not banking on a significant or quick recovery,” he said.
The fragility of BA’s recovery means that the airline will continue to seek cost savings. It began three days of talks with unions representing its 14,000 cabin crew yesterday and Mr Walsh is determined that operational changes will be made.