Branson predicts spectacular airline casualties
LONDON - There will be "spectacular casualties" in the airline industry over the next 12 months, billionaire Richard Branson, the owner of Britain's No. 2 long-haul airline Virgin Atlantic, was quoted as saying on Saturday.
The U.S. airline industry - including Virgin America - has been battered by soaring fuel costs that are pinching even the healthiest airlines.
"The financial state of the world is just about the worst I've ever known it," Branson told The Times newspaper in an interview. "It's getting perilously close to being worse than the 1990s.
"You have the perfect storm - you've not only got the banking crisis and the housing crisis, you've got the soaring fuel prices as well. One of the big American carriers will almost definitely go."
Branson confirmed Virgin was interested in buying British airline bmi, 50 percent plus one share owned by entrepreneur Sir Michael Bishop.
The carrier has long been expected to change ownership in 2009 due to a private agreement between Bishop and 30 percent minus one share co-owner Lufthansa.
Despite barely making a profit in 2007 - and with the outlook far worse for 2008 - bmi's value is in its control of 11 percent of the highly prized airline slots at Heathrow.
The billionaire also called for an end to BAA's monopoly of Britain's major airports.
Part of Spain's Ferrovial since 2006, BAA has owned the three main airports serving London - Heathrow, Gatwick and Stansted - as well as Scotland's Edinburgh and Glasgow airports since it floated over 20 years ago.
"It's been embarrassing to be British looking at foreigners queuing up to come into the country," said Branson.
"I certainly think that BAA should be broken up. Each individual terminal at Heathrow should be privatised so they can compete against each other. BAA just creams off more and more every year."
Britain's Competition Commission is investigating whether problems faced by airline travellers through Britain, as highlighted by the chequered opening of Heathrow's Terminal 5, are caused or exacerbated by BAA's monopoly.
uk.reuters.com
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Comments
Always remember, as news media covers, aviation is just one of the businesses of Richard Branson and the Virgin Group.
Just think about this:
virgin, lufthansa, bmi, southwest and perhaps singapore and Thai airlines as a world airline combo.here you have effective management...and a profit making combination..
Richard is not a dummy... like many other airline ceo's. he knows what he is doing.
CS
Good for Richard,
at least he is using HIS OWN, self made money and is not asking for grants or "gifts" from govermnemt.He effectively runs his businesses....and if they do not produce.....he closes them.. without seeking Chapter 11 protection.
Perhaps Sir Richard should be put in charge of UA, AA or Delta.....or all of them...and clean them up.
As far as BAA is concerned......to call it a JOKE is non descriptive.
How do you describe ineffective inability hiding behind an endless pit of $$$$$$$$$$$ ????????
have a great day..
HB
In response to the comment: "It's been embarrassing to be British looking at foreigners queuing up to come into the country..."
All I can say is, Try being an American -- The world is buying up everything here..
Kind regards,
Helena
PS I use to be a Virgin - I worked for Virgin Atlantic in NYC
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