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Welcome to London Air Travel’s Monday Briefing for the week beginning 7 September 2020.
Calls Grow For Rapid Airport Testing
It’s not often you see headlines sympathetic towards airlines on the front page of the Daily Mail – the master of the SEASONAL TRAVEL CHAOS front page headline – let alone three in the space of four days.
The Mail has joined the Telegraph in a growing campaign for the UK government to introduce rapid COVID-19 testing for arriving passengers at all ports and airports. This would replace the current whack-a-mole approach to mandatory 14 day quarantine restrictions. Tests would be paid for by passengers for a small charge.
In a letter obtained by the Telegraph a number of airports have warned the Prime Minister and Chancellor that a decision must be made on testing as soon as this week to avoid causing irreparable damage to the industry. MPs are due to debate the matter in the House of Commons on Thursday.
Virgin Atlantic went as far as it could last week to effectively say its survival depends on the reopening of transatlantic routes.
A cursory scan of BA’s September schedule where a number of business heavy short-haul routes have been suspended for the month suggests that business travel simply will not return without a radical change in approach. Willie Walsh pointed out in The Times last week that business travellers coming to the UK will not accept a mandatory 14 day quarantine when they typically stay for less than 7 days.
In a sign of how bad things are for the hotel industry the 474 room Hilton Times Square is closing – not a location many would choose in New York, but symbolic nonetheless. (CNBC)
Willie Walsh Departs IAG
IAG holds its Annual General Meeting tomorrow. What should be a pedestrian affair will be anything but.
Shareholders will be asked to vote in favour of a €2.7 billion rights issue. There are calls for shareholders to vote against IAG’s annual remuneration report which includes a £883,000 bonus for outgoing CEO Wille Walsh, based on IAG’s performance in 2019. The vote is non-binding, but a vote against will still cause embarrassment. Even fairly sympathetic voices towards IAG have suggested the bonus should be waived, as it has in the past.
Giles Agutter and Robin Phillips will also join IAG as non-Executive Directors, as requested by its single largest shareholder Qatar Airways.
Back to the rights issue, there is the question of will this be enough to see IAG into 2021 and whether it will need to seek state support. Speaking to Richard Quest on CNN International last week, Willie appears to have softened his views towards state support:
I have changed my views a little bit because as you know I’m strongly opposed to state aid, and I’ve always defined state aid or a bailout as something to help a company or in this case an airline that has failed or is failing. I think in this situation, many of the airlines that have received state aid were in good financial shape before this crisis and deserve to be helped.
The thing that we have to focus on Richard is a lot of this state aid has come in the form of debt. So the balance sheet of all of these airlines will be severely stressed as a result of this.
Now we’ve taken the view that before you can ask for help, you’ve got to help yourself, you’ve got to do everything you can. within your own power to as best you can address the challenges you face and that’s what we’ve been doing. So, I don’t believe we need state aid, I can’t rule it out so obviously I’m finishing up next Tuesday. My successor Luis Gallego will have to make these decisions going forward.
This probably isn’t the last you have heard from Willie Walsh. He has according to an interview with The Irish Times been offered a number of non-executive positions.
BA CityFlyer Launches Belfast
BA CityFlyer launches is inaugural route from London City to Belfast City airport today.
Also at London City, BA CityFlyer returns to Berlin Tegel and Frankfurt today.
In case you missed it:
British Airways’ Africa franchise partner Comair plans to resume flights in December. (London Air Travel)
The bmi Heathrow remedy slots have been re-advertised, but are subject to a legal challenge from an unidentified source. (London Air Travel)
Also of note this week:
Far be it from us to indulge in salacious gossip, but The Sun has obtained a “secret dossier” of celebrity antics on board BA and Virgin flights. What would Our Graham say? (The Sun)
BA criticises plans for Heathrow’s aborted third runway costs to be passed on to airlines. (Telegraph)
Late post publication updates:
[Reserved for updates throughout the day]
British Airways has confirmed it will retire another Boeing 747, G-BYGA, tomorrow. The 86 Club World Seat aircraft entered into service in December 1998. Its last scheduled flight was from New York JFK to London Heathrow on 21 March 2020.
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