In an exclusive interview with ABTN, British Airways CEO Willie Walsh, shares his thoughts on open skies and the airline”s move into Terminal 5 next year.
When the ”Open Skies” agreement between the EU and the US comes into effect next March, British Airways will be ready.
I believe the impact of the deal will be much less than some of the hype has suggested, and I am confident that we are extremely well placed to take advantage of the relatively limited opportunities that the new arrangements will create.
By the time the agreement is implemented, British Airways will be enjoying the benefits of our exclusive occupancy of Heathrow”s magnificent Terminal 5.
After years of cramped passenger conditions and periodic ”chaos” headlines, T5 is the start of Heathrow”s fightback. The airport experience for our customers will be transformed. T5 is light, spacious, modern and smart. There will be less queuing, faster baggage systems, better punctuality and smoother connections.
For standards of comfort and convenience, British Airways” new home will raise the bar ” and transatlantic customers will want to enjoy them as much as any others.
They will also want to enjoy the highest levels of comfort and service during their flight, and our new Club World cabin will meet their expectations in every way.
By March next year, this industry-leading premium product will be in place across the vast bulk of our long haul fleet, offering customers more luxury, more space, more choice, more privacy and an even better sleep in fully-flat beds that are 25% wider than the original version.
We will be ahead of the competition. And that includes any new competition that has come into Heathrow as a result of the Open Skies accord.
New entrants will not only have to find runway slots at convenient times ” a task neither easy nor cheap ” but also adequate terminal space. They will be searching for this space at a time when Heathrow”s ”old” terminals are in a high state of flux, with incumbent airlines preparing for moves that will follow our vacating of Terminals 1 and 4 ” and BAA facing a need to turn parts of the airport”s central area into a construction site as it redevelops Terminal 2.
We do not underestimate our competitors. But they will have an uphill struggle to find terminal facilities that can come close to what we will offer in Terminal 5.
One reason we have no fear of competition is because we face it all the time. One of the great myths in some of the public debate over Open Skies is that the old Bermuda II agreement effectively precluded competition on routes to the US from Heathrow.
As is well known, four carriers have been allowed to fly these routes: British Airways, Virgin Atlantic, American and United. That is more competition across the Atlantic than from any other European airport.
If you look at seats per week, you find that British Airways faces at least five times as much competition to the US from Heathrow as Lufthansa faces from Frankfurt or Air France from Paris.
If we did not believe in competition, we would have not led the way in making the case for mixed-mode operations and a third runway at Heathrow. Both these projects will favour new entrants at Heathrow and dilute our overall slot share.
If we did not believe in competition, we would not have spent the last four years pressing the European Commission to keep to its mandate and negotiate an Open Aviation Area with the US in which all the traditional limitations on traffic rights and airline ownership are removed.
It is an Open Aviation Area that will deliver real benefits to consumers, just as deregulation has within Europe.
We have known such a negotiation would not be easy ” which is why we said Europe should not surrender its primary bargaining chip, access to Heathrow, until the US signed up for a genuine, even-handed liberalisation.
We are pleased the UK Government has inserted a clause in the new deal to provide for an automatic termination of this first phase of revised arrangements if the US has not made real progress toward a full Open Aviation Area by 2010. This has not made a bad deal good, but it has made it better.
We will monitor these negotiations very closely over the next three years ” and we will hold the Government to its word to achieve a real breakthrough for European aviation and its customers, or revoke the concessions the US has just been granted.
Willie Walsh
British Airways CEO