IAG boss Willie Walsh: Cork Airport will not go out of business if charges are cut
Willie Walsh, the boss of airline conglomerate IAG, which owns Aer Lingus, said that airports will have to cut charges they levy airlines and that Cork Airport’s financial health will not be harmed if they do so.
His comments come after Cork Airport managing director, Niall McCarthy, said he was “extremely concerned” and that the sustainability of the airport was “fundamentally threatened” by the regulator’s proposals to cut airport charges at Dublin Airport by 22% in the coming years.
The knock-on effects would wipe out Cork’s operating profits and cut annual revenue at Cork Airport by over €4m, he said.
But Mr Walsh — who negotiated with the Government to buy out Aer Lingus four years ago, for it to join British Airways, Iberia, and Vueling under the IAG corporate banner — said that Cork and Dublin could still thrive and investment plans at the airports wouldn’t be threatened by lower charges.
Asked at a briefing to comment on Mr McCarthy’s remarks, Mr Walsh said airports have room to cut charges without threatening their financial security.
“Has an airport gone out of business anywhere in the world? I can’t think of one. I can think of hundreds of airlines that have gone out of business.
"I can’t think of a single airport that has gone out of business. It is not unusual for an airport to say that they are finding it tough.
"But, quite honestly, they are not and there is plenty of scope,” Mr Walsh told reporters.
Mr Walsh reiterated that the main growth plans for Aer Lingus remain focused on Dublin, and not on Cork and Shannon, because the capital’s airport was an international hub that can attract key transatlantic and short-haul routes, he said.
Citing such routes out of Cork to Dubrovnik, Aer Lingus said it will continue to look at Cork and Shannon, when it spots opportunities.
Mr Walsh said that developing a hub in Cork and Shannon, that attracts both transatlantic and short-haul routes, wasn’t feasible, because the potential market was far too small.
The IAG chief executive again outlined general plans to hugely expand transatlantic routes out of Dublin in the coming years, but said it has no immediate plans to announce new routes.
IAG shares soared 7.5% as it reassured investors about its outlook, after reporting a surge in operating profits, to €960m, in the three months to the end of June.
Over the full six months to the end of June, Aer Lingus contributed €78m to the operating profit of over €1bn that IAG generated in the same period.
Aer Lingus increased capacity across the Atlantic by opening routes to Philadelphia and Seattle in 2018.
Mr Walsh said that there was no specific threat to Aer Lingus operations, if Britain were to crash out of the EU at Halloween, although the impact on the British economy would have to be assessed.
“It keeps going. There is no impact. The impact of Brexit — be it a hard Brexit, soft Brexit, managed Brexit, whatever label you want to give it — it is all around, for us, the economic impact it will have on the UK and, from a regulatory point of view, we recognise there are new issues, but we have dealt with them and we are not concerned from that point of view,” he said.
And he said it was seeing no current effect from Brexit uncertainty.
Mr Walsh was also hopeful that a threatened strike by pilots at British Airways wouldn’t go ahead and that mediation over the airline’s “generous offer” would fix the dispute.
