The chief executive of British Airways, Willie Walsh, says his company is “fighting for survival” but don’t expect Sir Richard Branson to show too much sympathy.
The maverick billionaire, whose various Virgin airlines are in competition with British Airways, has moved to give British Airways a solid kicking while it’s down, urging the British Government not to bail the company out.
“We and others are standing by ready to take on their routes and runway slots at Heathrow if they get into serious trouble. I thought the US Government’s bail-out of the car companies was a bad idea and it’s the same for BA,” Branson thundered.
He says Virgin has looked at bidding for BA, but the company’s debts – and particularly the large amount it owes in pension commitments – are just too big.
“It’s not worth much anymore because of the liabilities. We were thinking about [bidding]… but it would be better to wait for its demise.”
For its part, BA has responded that it has not asked for state-aid and has no plans to.
That might be right, but Branson would know that governments around the world tend to think of national airlines in the same way they think about national car companies – letting them fall over is not a good look.
Branson doesn’t want the bailout to happen and is waiting in the wings – Virgin’s airline business would be a huge winner if BA was to fall over – and so he’s got the boots in nice and early.
And make no mistake, Branson’s opinion does carry weight – BA’s shares dropped 8% overnight and the company appears to be a in a troubling tailspin.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
