BA threatens to favour Madrid

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British Airways will expand in Madrid rather than at Heathrow after it merges with Iberia if the government fails to address rising travel demand now that it has scrapped plans for a third runway at Britain’s biggest airport, Willie Walsh said.

“You’ve got a fantastic airport in Madrid that has excess capacity that the Spanish government has invested in [and] Madrid’s local government has invested in, and we’ll grow there,” the BA chief executive told the Financial Times in a video interview.

“Growth is not going to go away. Growth will just leave the UK and go to other parts of Europe.

“BA will be able to access that growth because our assets are mobile and we can focus on developing Madrid rather than . . . London.”

The UK’s coalition government confirmed last month it would not allow any new runways at the country’s three largest airports, Heathrow, Gatwick or Stansted, prompting applause from environmental campaigners and frustration in the aviation industry.

Ministers say any increase in demand for air travel in the south-east of the UK – predicted to grow from 117m passengers in 2000 to 300m in 2030 – can be soaked up by regional airports and new high-speed rail links.

But the aviation industry questions how this would work, especially since Heathrow is the only true international hub airport in Britain.

Mr Walsh said the runway issue reinforced the merger plan with Iberia due to be completed by the end of the year.

His comments on Thursday came as BA issued its annual report revealing Mr Walsh had foregone a £334,000 bonus last year, but could get a larger one this year if he meets a range of criteria including an improvement in industrial relations.

The report was issued hours after the Unite union, which represents most of BA’s 13,400 cabin crew, told the airline it planned a fresh strike ballot, which could see another wave of stoppages in the summer.

The ballot is over travel concessions stripped from striking staff; disputed disciplinary measures against some strike supporters, and the use of replacement crew working on reduced terms during the stoppages.

Mr Walsh said that he had shown that the union could no longer close down the airline.

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