Rationalising Europe's airspace could reduce aircraft CO₂ emissions

British Airways chief executive officer Willie Walsh, addressing the European Aviation Club in Brussels, dwelt in detail on some of the issues handled at British Airways in the past two years and what the airline is planning for the future. He spoke about some of the vital policy issues being dealt with in Brussels, and what British Airways sees as the priorities in those policy areas in the year ahead.

Referring to the financial results announced last week, Mr Walsh said the airline achieved a 28 per cent improvement in operating profit compared with the previous year, and its long-term goal of a 10 per cent operating margin for the full year remains achievable.

"If we succeed in reaching 10 per cent, it will be the first time in British Airways' history - and, I might add, a result significantly in excess of the operating margins of the other large European network carriers," he remarked.

"The soaring cost of fuel is a problem across the industry - and one that is beyond our control. The intensity of competition in our markets means that it is not possible just to pass on all this extra cost to our customers."

He said he was proud to be the first CEO of British Airways to have ordered Airbus aircraft for its long-haul fleet, adding that the A380 is a testament to European cooperation, technology and vision.

In terms of CO₂ emissions, the airline expects its A380s to be 17 per cent more efficient than the Boeing 747-400s they will replace. British Airways has ordered 12 A380s for delivery between 2012 and 2014, and has options on seven more. The airline is looking closely at their suitability for high-density routes to the Far East, such as Hong Kong and Singapore, and to Los Angeles and San Francisco on the American West Coast.

Referring to what he described as "Heathrow hassle", Mr Walsh said Terminal 5 will open for business on March 27. This, he added, will be an outstanding facility that will rank with any airport building in the world - and it will be for the exclusive use of British Airways. BA customers will enjoy a far more comfortable terminal experience, with less queuing, faster baggage systems and better punctuality.

He said the airline has invested €60 million in the world's largest airport lounge complex, which will offer the highest standards of luxury and refreshment for its premium customers, whether departing or arriving.

On runway capacity Mr Walsh said the UK Government is conducting public consultation on its plans to allow full utilisation of the two existing runways and the construction of a short, third runway, subject to meeting strict environmental safeguards. A third runway would reinforce the gains in punctuality and reliability, and allow Heathrow to add 75-80 new destinations to its existing global network.

Referring to the EU emissions trading scheme, Mr Walsh said this is one of the most visible examples of the crucial work that is done in Brussels in relation to the European aviation industry. The Commission has also played a key role in harmonising rules on security. It is surely now beyond question that an EU-wide approach on security is effective and efficient for airlines and has real benefits for customers.

The proposed Airport Charges Directive and proposed revision of the CRS Code of Conduct are good examples of sensible regulatory action.

The aim must be to ensure that competition is fostered wherever possible, and that appropriate regulatory measures are taken if there are natural monopolies where competition is not a practical possibility.

He described the year ahead as "crucial" for aviation policy-makers in Brussels. The Single European Sky is one of British Airways' priorities. This issue has become much more than one of operational efficiency, vital though that is with improvements in routings offering airlines savings of as much as €3 billion.

Rationalising Europe's airspace could reduce CO₂ emissions by up to 12 per cent. It is potentially the biggest environmental win the industry can achieve for itself in the short term. The second priority issue is the work that will determine the final shape of the EU's Emissions Trading Scheme. For the EU, this is an opportunity to show the rest of the world that carbon trading can work, that it is the most effective mechanism for ensuring that reduction of greenhouse emissions and promotion of economic growth can go hand-in-hand.

In the UK, air passenger duty generates €700 million in revenue from British Airways flights alone. That revenue is not spent on any environmental project. If it were spent on carbon offsets, it could offset the emissions of the entire British Airways fleet twice over.

Referring to EU-US agreement, Mr Walsh said stage one of the agreement provides a limited but useful liberalisation of the previous regulations, which it was intended to fully exploit. From March 30, British Airways will begin flying to Dallas Fort Worth and Houston from Heathrow rather than from Gatwick. "In addition, we will increase frequency on our Heathrow-New York JFK route from 51 flights a week to 55. We will increase frequency on the Heathrow-Seattle route from 10 flights a week to 13, and on Heathrow-Washington from 21 services a week to 24."

Stage One of the EU-US agreement has also enabled BA to become the first European airline to launch a network of routes from outside its home country to the US.

This network will be operated by its new subsidiary which, partly in honour of the Stage One agreement, has been named OpenSkies. It will start operations in June with daily flights from Brussels or Paris to New York.

By the end of 2009 it is planned to have an OpenSkies fleet of six aircraft, operating between a wider range of major European business centres and the US.

Genuine deregulation of transatlantic aviation would drive efficiency and bring consumers the kind of benefits seen in the EU since the Commission's historic deregulation in the 1990s.