British Airways owner slaps down Brexit alarmists as profits take off

British Airways’ parent IAG on Friday hit back at Brexit scaremongering over EU access as it shrugged off a bank holiday power failure to notch up soaraway profits.

IAG chief executive Willie Walsh said EU officials would strike an “easy” deal with the UK over airline access because tourist hot spots in places like Spain and Ireland rely on a flood of Brits to survive.

“These are issues which will be relatively easy to address. This is something where there is absolute alignment. The British citizens travelling abroad are a significant element of EU tourism and EU trade. I’m confident this will be dealt with,” he said.

Branson beef hots up

The spat between IAG boss Willie Walsh and Sir Richard Branson intensified today after Walsh accused the billionaire of “trying to rewrite history”.

Branson goaded Walsh yesterday over a 2012 bet to accept a “knee in the groin” if the Virgin Atlantic brand had disappeared by 2017.

But Walsh maintains: “I said if Richard Branson is claiming he’ll be a 51% shareholder of Virgin Atlantic five years from now, that’s a bet I’ll take. He’s not going to be a 51% shareholder. It’s exactly what I predicted. I’ve got no interest in meeting this guy. It’s nice to be right but it’s not an issue.”

Branson yesterday cut his stake in Virgin Atlantic after selling a 31% share to Air France-KLM. US airline Delta will retain its 49% stake in the company, leaving Branson’s Virgin Group with 20%.

Rivals like Ryanair chief Michael O’Leary have warned UK jets could be grounded if negotiators fail to strike a bilateral trade deal to replace the EU Open Skies agreement when the British leave in March 2019. But Walsh said the problem was “specific” to Ryanair, adding there was a “good history” of territories striking air-service agreements.

“I am much more optimistic than Michael. I think he’s highlighted some issues and in his own style he’s turned these issues into a crisis,” he added.

IAG took a 65 million (£58 million) compensation hit and 20 million revenue loss linked to BA’s power failure over the May bank holiday, which left thousands of passengers stranded.

The company apologised but, to the chagrin of many customers, it took the disaster in its stride with profits jumping an eye-watering 45%. Earnings for the three months ending June were €805 million and full-year figures are also expected to show a double-digit rise.

Lower fuel costs and a good performance in Spain propelled the increase.

The Anglo-Spanish giant has nearly €8 billion of cash sitting on its balance sheet. Walsh ruled out a bid for Alitalia, the struggling Italian flag carrier put up for sale in May. “You had to submit an expression of interest last Friday and we have not done that,” he said.