IAG boss hits back at criticism of airline sector profits

11th Apr 2014 11:21

International Consolidated Airlines (IAG) boss Willie Walsh has slammed claims that carriers flying over the Atlantic are making money 'hand over fist'.The head of the parent company of British Airways insisted on Thursday that the airline industry was not "hugely profitable"."The airline industry has never covered its cost of capital. It operates on tiny margins and faces massive costs of investment," he said at the Centre for Aviation Airlines in Transition conference outside Dublin, according to Travel Weekly."We do not make sufficient profits. The level of profits is nowhere near enough."His comments came in response to criticism from European Commission director of air, aviation and international transport policy, Matthew Baldwin."There is evidence people are making money hand over fist on long-haul, particularly over the Atlantic," Baldwin told the conference. Walsh hit back by saying: "That is nonsense. That is typical of a bureaucrat. You are so out of touch."However, Irish Aviation Authority Chief Executive Eamonn Brennan said the industry was not devoid of profit, supported by European open skies.He noted that many airlines exist on cash flow and when cash runs out they are propped up by governments. Walsh also butted heads with European Aviation Club chairman Rigas Doganis who told the IAG boss to "stop whinging" about the extent of regulation in the aviation industry."Your problems are not the regulators," he said."Things have changed dramatically. easyJet and Ryanair have established bases all over Europe. The problem is that legacy carriers in Europe have stuck their heads in the sand. BA, Air France, Lufthansa have decided to stay in their hubs."IAG shares fell 4.20% to 11:37 on Friday.RD