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19 May 2012 |

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Willie Walsh and BA

The jury is still out on the merger plans

Eugene Gold Eugene Gold
Wednesday 29 September 2010

I have been uncharacteristically undecided in my views of Willie Walsh.aa-ba-ib-tailfins2.jpg

My first instinct was that I did not like him. He reminded me of Michael Edwardes, the very combative CEO of British Leyland in the 1980’s.

Edwardes took on a company that was in self-destruct mode, torn by Union strife and producing vehicles that were transformed from world leaders to uncompetitive rubbish. He fought and won but probably destroyed the company in the process. I am not sure that he did anything wrong – it was just one of those impossible situations.

I look at BA in a similar light. The airline had some great days. Lord king was a leader in the right place at the right time and he will generally be remembered with affection and respect for his time at the top. It seems to have all gone downhill since then.

Willie Wash is clearly a tough corporate cookie. He has taken on the unions and, despite the remaining ragbag of threatened strikes, has clearly won.

What Walsh has also done, and this is where my jury is still out, is to recognize the importance of size and market consolidation. I strongly dislike the idea but have to accept that, in the next few years, size will matter. Big airlines will survive, passengers will suffer and the smaller operators will be swallowed up or be lost.

The BA-Iberia tie up frightens me but I do see its economic logic. The BA-Iberia and American Airlines alliance may still be a big step too far and risks putting far too much power, not to mention Heathrow landing slots, in the hands of one company.

There are a plethora of arguments to be considered and much of this may be good for Britain and protect London’s position as a centre of business travel. But, how about me with my hard-earned trips to the USA? How about Mr and Mrs Smith and their two-children off to Disney Land?

There will always be winners and losers. My worry is that Willie Walsh may win whilst BA and its customers may still suffer. Echoes of British Leyland?

Don Potter
Don Potter
29 September 2010, 04:13PM

What scares me is the control BA and now American will have over the Heathrow landing slots. If here is no third runway, Walsh can squeeze the other airlines out of the market and then put up the prices.
Virgin Atlantic have been a fabulous counter-balance to an over-rampant BA. Without them, we could see prices go out of control.

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Peter Bond
Peter Bond, Bristol
30 September 2010, 01:50PM

One does have to wonder about the logic here. BA have a massive pension deficit which seems to get bigger each time the figures are revealed. The Iberia board of management had a chance to walk away but decided to accept the deficit as part of the deal.
Now, either Willie Walsh is one top dog salesman or there is something else that we are not being told about.

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Glenda Morgan
Glenda Morgan
4 October 2010, 10:02AM

I am worried about this BA expansion. It is bound to push up prices and may even mean the end of Heathrow as a premier hub.
I have flown into Madrid and it is a truly superb airport. I can see the new BA-Iberia-AA alliance using that as their point of preference.

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Brian Burden
Brian Burden
18 May 2011, 01:35PM

Love them or hate them. you have to hand it to this guy Walsh. He has made his airline a financial and powerful force. I am not sure that it is good for passengers but perhaps that is not what he is paid for.

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