BA boss attacks US “protectionism”
A senior British Airways executive has hit out at American “protectionism” which is keeping many US carriers afloat.
BA’s general counsel Robert Webb attacked state hand-outs to carriers in the US and Europe.
Speaking at a Carlson Wagonlit Travel Northern Europe conference in London, he said it was impossible to ignore the huge amounts given by the US government to its airline industry.
“We are opposed to US protectionism and state aid in general,” he said. “We are currently trying to stop various European carriers getting state aid. If that culture is allowed to continue for long you get raped.”
Referring to BA, he said: “We are not drowning, but we are not safe, in part because of American protectionism.”
Mr Webb added: “There has been $2 billion given to United Airlines alone. The costs of enhancements to security were mainly borne by the US government and there has also been significant relief from pension commitments.
“It’s surprising how there are still people who believe BA gets support from the government. It does not. Our insurance bill was £25 / $45 million a year before September 11. It is nearly £100 / $180 million now – and we pay that.”
Referring to BA’s profits of £230 / $415 million last year, with a five per cent operating margin, Mr Webb said: “We want an operating margin of 10% to fund the business. In 1998 our shares were £7.20. In the following four years they dropped to 89 pence. They are currently £2.50.
“The company is now worth nearly more than the deficit in the pension fund. We have to honour our pension fund. People are living longer and all pension schemes are under strain.
“We are a £2 / $ 3.6 billion company with an £8 / $14.5 billion pension fund. Being a start up airline is far easier than being a legacy carrier.”
Report by Phil Davies
Phil Davies
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