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British Airways and Iberia finally sign up.

British Airways and Iberia have finally signed the long-awaited merger agreement the two flag carriers have been negotiating since July 2008.

The deal is critical to BA's efforts to compete with larger European rivals and will create a combined group with 408 planes flying to 200 destinations and carrying more than 58 million passengers every year.

The two airlines will retain their existing operations and their individual brands, but both will be owned by a new holding company called International Airlines Group (IAG).

BA's chief executive Willie Walsh will be the chief executive of the new group. Antonio Vazquez, his opposite number at Iberia, will become IAG's first chairman.

BA shareholders will receive one ordinary IAG share for each BA share, while Spanish investors will receive 1.0205 shares for every Iberia share. The arrangement leaves BA's stockholders with 55 per cent of the new company, Iberia's with 45 per cent. IAG will be listed in London, but it will be taxed in Spain and its shares will be traded in both countries.

Mr Walsh yesterday stressed the benefits of the deal to passengers. "The merged company will provide customers with a larger combined network," he said. "It will also have greater potential for further growth by optimising the dual hubs of London and Madrid and providing continued investment in new products and services."

But its central aim is to cut costs, and the merged company is aiming for annual savings of up to €400m (£350m) by its fifth year. Mr Vazquez said: "This is an important step in creating one of the world's leading global airlines that will be better equipped to compete with other major airlines and participate in future industry consolidation."

Negotiations over the merger dragged on for nearly 18 months before a memorandum of understanding was finally signed last November. Part of the problem was a protracted wrangle over the two companies' respective shares of the new organisation, as BA's profits tumbled, its share price dived, and its pension deficit ballooned in the second half of 2008.

The vast pension deficit soon became an obstacle in its own right. By December 2009, the black hole stood at a whopping £3.7bn. And the merger agreement makes the specific point that Iberia retains the right to terminate the deal if the pension recovery plan agreed between BA and its pension trustees is not satisfactory, "in Iberia's reasonable opinion".

Civil aviation authorities in both Britain and Spain have signed off the deal, but it still needs to be cleared by Europe's competition authorities. If all goes according to plan, the deal will be put to a shareholder vote in November and will take effect one month later.

The merger is vital if BA is to catch up with the rash of consolidation as major European rivals fight to survive in the intensely competitive global aviation industry. Without Iberia, the company cannot maintain its position as a major player, according to James Halstead, an independent aviation expert.

"BA's unique position at Heathrow could help it survive for a short while, but in the long run it needs more than just Heathrow," he said. "The main point of the Iberia deal is to be able to cut costs and put the combined company in the position that Air France-KLM and Lufthansa are already in."

The next step is BA's planned tie-up with American Airlines, which is under review by competition watchdogs on both sides of the Atlantic and facing bitter opposition from Virgin Atlantic.

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Heathrow Airport on sea gets thumbs down                                  March 1 2010

The world’s leading airline operators today dealt a body blow to the Mayor of London over plans to replace Heathrow Airport with a new airport in the Thames Estuary.

A £40bn six-runway airport built on reclaimed land dubbed “Boris Island” would bury Heathrow’s third-runway expansion and trigger an end to flights over south-west London, with the airport’s ultimate closure.But the Board of Airline Representatives UK - which makes up 90 per cent of Heathrow’s operators - said there was an insurmountable safety risk concerning the estuary’s bird colonies, which could strike aircraft.

British Airway’s chief executive, Willie Walsh, also claimed in a survey commissioned by Medway Council how closing Heathrow would create a “vast wasteland west of London”.

BAA, the owners of Heathrow Airport, are naturally totally opposed to the plans for a new airport.

US Contintal Airlines starts Mobile Boarding Passes at Heathrow Airport     February 27 2010

Continental Airlines announced  the expansion of its mobile boarding pass service to London’s Heathrow Airport, becoming the first carrier to offer paperless boarding passes on nonstop flights from the United Kingdom to the U.S. The service allows customers to receive boarding passes electronically on their mobile phones or personal digital assistants (PDAs) and eliminates the need for paper boarding passes.

“We are pleased to add Heathrow to the growing list of airports we serve with mobile boarding passes,” said Martin Hand, Continental’s vice president of reservations and eCommerce. "Customers have told us this is the type of product improvement they want, and we will continue to expand the self-service technology to more of our domestic and international destinations.”

Mobile boarding passes display a two-dimensional bar code along with passenger and flight information, which scanners at the security checkpoint and boarding gate validate. The technology prevents manipulation or duplication of the boarding passes and heightens security.

Continental operates five flights per day from Heathrow - three to its New York hub at Newark Liberty International Airport, and two to Houston.  The airline announced recently that it will add a fourth daily service to the Heathrow-New York route in March and a fifth daily service in October, bringing the total number of Continental daily departures from Heathrow Airport  to seven.

The Wandsworth Guardian carried this story today:

"The economic case for expanding Heathrow was “fatally” overstated by the Government, which also failed to prove roads and public transport could cope with extra passenger demand, the High Court heard today.

Lawyers representing a coalition of local councils - including Wandsworth, Richmond and Hounslow - and green groups made the claims on the second day of a judicial inquiry into the Government's decision to expand the airport.

The coalition wants the High Court to rule last January's decision – which includes plans for a third runway and new terminal to increase capacity – unlawful, as it said final plans differed greatly from those consulted on.

The Government lawyer said it had not broken any law and the economic case was not relevant to the consultation and would be developed at a later stage along with transport implications.

Additionally, he said, the Government had decided expansion at Heathrow prior to the public consultation in 2007, and it was merely seeking views on how expansion would take place.

Acting for the coalition, Nigel Pleming QC, said the Government's forecast of a £5.4bn net benefit from expansion was incorrect.

Despite not being part of the public consultation, the Government had agreed to implement plans to reduce carbon levels to 2005 levels by 2050, he claimed, and had overestimated passenger numbers while underestimating the price per tonne of carbon as part an off-setting scheme.

A Climate Change Committee report, produced 11 months after the Government decision, showed Heathrow could expect fewer passengers, he said, and revealed the price of carbon per tonne by 2050 would be £200, against the Government’s figure of £63.

“It would almost bring it [the net benefit] back to zero from £5.4bn,” Mr Pleming said. “If this had gone through the consultation process we say it would have significantly, if not fatally, undermined the case for a third runway.”

Nathalie Lieven QC said the Government also failed to address how it would meet extra demand on the Tube, trains and roads.

While it had taken account of the net benefits of expansion it had not accounted for the “dis-benefits” from stretched road and rail services, she said, adding businesses and local economies around the airport would also suffer.

“It is very clear these costs undermine the economic case,” she said. “He [the secretary of state] chose not to 'monetarise' the dis-benefits and failed to take into account a material consideration.”

The Government lawyer, Jonathan Swift QC, said the public consultation served only to seek views on how extra capacity should be met and when it should take place.

“The policy in favour of expansion at Heathrow was taken in 2003, the 2009 consultation decision was consulting on options for expansion,” he said. “The 2009 decision was simply one step. It is not the final destination of that process.”

He said the secretary of state had been “consistent” and there would have to be consultations when groups would “have their say” on transport and economic concerns.

He said: “There is nothing unreasonable, let alone unlawful in this approach.”

Lord Justice Carnwath asked Mr Swift about the timing of the Government's January decision, given it knew an important report from the Climate Change committee was imminent.

He asked whether the Government had considered in waiting for a report “that people may find it critical to what happened in the long term”.

Mr Swift replied: “The short answer is it could have been done that way but there is no reason it couldn't have been done the way the secretary of state did it.”

He added: “The present policy position is that they [the Government] supports expansion at Heathrow, subject to air quality and noise conditions being met.”

He conceded they had not been met in the Government's January decision, but added it “only said they could be met, not that they were met”.

The review continues."

Arguments over the third runway at Heathrow Airport will run and run

Third Runway at Heathrow Airport  will boost UK economy                       February 22 2010

The BBC carries this report today:

"A third runway at Heathrow airport would provide a £21.7bn boost to the UK economy, the British Chambers of Commerce (BCC) has suggested.

This is the single largest benefit from 13 key transport projects that would boost the economy by £85bn, it said.

The business group said spending on key UK infrastructure projects must not be cut despite tight public finances.

UK firms believed investment was "essential to the future success and growth of regional economies", it said.

The Labour and Conservative parties have said they would cut public spending to reduce the budget deficit.

"Transport infrastructure cuts must not become a politically convenient way to slash spending after an election, especially when there are huge savings to be made in far larger budgets, including health, education and welfare," said David Frost, the BCC's director general.

"Cutting or scrapping plans for regional transport improvements means fewer jobs, and ultimately fewer businesses driving recovery."

The BCC put the total cost of the infrastructure projects, which include London's Crossrail train link, a third runway at Heathrow airport, as well as road and rail improvements, at £29.8bn.

The public sector would contribute £3.1bn a year for five years, with the private sector making up the remaining £14.3bn.

Transport Secretary Lord Adonis said: "Even in tough economic times, we must continue to invest in vital transport infrastructure which benefits jobs, businesses, our economy and the environment."

Some Americans upset with Heathrow Airport body scanners                January 29 2010

Many American passengers are not happy that  passengers will have no right to refuse to go through a full-body search scanner when the devices are introduced at Heathrow Airport next week, ministers have confirmed.

The option of having a full-body pat-down search instead, offered to passengers at US airports, will not be available despite warnings from the government's Equality and Human Rights Commission that the scanners, which reveal naked bodies, breach privacy rules under the Human Rights Act.

The transport minister Paul Clark told MPs a random selection of passengers would go through the new scanners at UK airports. The machines' introduction would be followed later this year by extra "trace" scanners, which can detect liquid explosives. A draft code of practice covering privacy and health issues is being discussed in Whitehall.

Air New Zealand introduces beds from Heathrow Airport                     January 27 2010

From next April, those flying economy from London Heathrow to Auckland on Air New Zealand will be able to put it to the test on the gruelling 26-hour journey.

The pioneering design has been developed specifically to cater for young families or older couples on the high-end tourist route. It takes up no more space than a conventional economy seat, so the airline will not lose passenger numbers — although a couple will have to buy a third ticket at half the standard fare to be able to lie together.

The bed is activated on rows of three seats, which look like standard economy seating until a button on the armrest is pressed. This raises what looks like an elongated foot rest, which becomes a mattress panel abutting the seat in front. Passengers sleep across the cabin. Two adults can just about lie shoulder to shoulder, but the bed would be more comfortable for an adult and two young children.

“The days of sitting in economy and yearning to lie down and sleep are gone,” said Rob Fyfe, the chief executive of Air New Zealand, which has spent several million pounds developing the concept. The company is not yet willing to say how much a London-Auckland fare will be, but its long-haul boss, Ed Sims, acknowledged that prices might rise if they proved popular.

Better things to do at Heathrow Airport                                            January 23 2010

The big news from Heathrow Airport today was that Victoria Beckham was seen arriving on a plane from Milan. Wow. Even more exiting was the news that she been to Milan to see husband David, and they spent several happy hours shopping in fancy Milan shops. Wow, wow.

Pathetic, isn't it?

No British Airways strike at Easter                                                      January 22 2010

Passengers from Heathrow Airport will be pleased to learn that there will be no British Airways strike at Easter.

Although an initial trial was cancelled in 2008, body scanners are now once again to be introduced at Heathrow Airport.

Third Runway at Heathrow Airport will mean more domestic flights         January 17 2010

The UK Department of Transport has said that a third  runway at Heathrow Airport will mean more domestic air travel.

“Additional runway capacity would clearly provide more opportunity to cater for demand for regional air services,” it said.

A BAA spokesman said: “There is a powerful argument that regions of the UK need to be connected to Heathrow in order to do business around the world.”

Bizarre behaviour at Heathrow Airport                                                January 16 2010

The following day, Miss Boyle, who has learning difficulties, had a tantrum in the British Airways VIP lounge at Heathrow Airport.

She was seen dancing and singing with a mop in front of fellow first class passengers. She also shouted obscenities and tried to polish a passenger's shoes with the mop.

The incidents are another sign that Miss Boyle, 48, could be becoming overwhelmed by the demands on her after her success on ITV's Britain's Got Talent.

A source close to Miss Boyle said she felt she was being pulled in different directions by her managers - Andy Stephens who used to work with George Michael, U2's former accountant Ossie Kilkenny and one of her nieces, Kirsty.

The source added: 'No wonder Susan may be a bit frazzled - it's all a bit too much to take in.'

The first of the latest incidents came on Monday at The Mill Cafe, near the council house in West Lothian, where Miss Boyle has lived since she was a baby.

One staff member - who asked not to be named - said the singer was 'effing and blinding' when she walked in. 

She then started complaining to others about her personal assistant - believed to be another niece - who, according to Miss Boyle, had said she needed to go on a diet.

The cafe worker said: 'When my boss came in with a delivery, I was sitting talking to her and Susan shouted over, "You better not be ****ing talking about me". 

BMI reduces flights on Dublin services to Heathrow Airport                    January 10 2010

BMI staff  are at risk of redundancy after the airline today announced it was cutting the number of daily flights from Dublin to Heathrow Airport to four for its summer schedule, ending the necessity to base an aircraft at Dublin.

"Currently, bmi flight operations between Dublin and London Heathrow requires one aircraft to be based at Dublin and one at Heathrow, with the additional cost of retaining aircraft and crew at both bases," the airline said in a statement.Commencing with the summer 2010 flying programme, bmi will base the required aircraft at London Heathrow.

The airline said the move was part of further restructuring efforts as it focused on returning the company to profitability.

Incident at Heathrow Airport                                                             January 10 2010

Armed policeboarded a plane at Heathrow airport and arrested three men over a verbal threat

The Metropolitan Police said three people have been arrested.

Passenger Cameron McLean said one man was taken off the plane in handcuffs before sniffer dogs were brought in.

"Police just swarmed the guy and rushed him out.

"I think he was a white male. There was another one but I didn't see him."

An airport spokesman said: "I can confirm there has been an incident on the EK004 flight to Dubai.

Brunt added: "A verbal threat of some description was made. It was overheard. It was reported to members of the crew.

"They were understandably very concerned. "They stopped the plane. The plane was taken back to some part of Heathrow, at which point anti-terror police boarded the plane.

"I think, at the moment, this was just a verbal threat but, of course, an investigation ensues until police are satisfied.

Airports across Europe reported some flight delays Monday due to heightened security imposed after an attack on a Detroit-bound airliner, but advance warning from airlines kept disruptions to a minimum.

At London Heathrow Airport, Europe's busiest air hub, there were delays of about an hour on flights to the U.S., and small lines built up at departure gates. But most passengers took things in stride.

"It's Christmas as well, so you'd expect some delays," said Mary Lecarpentier, 45, who was traveling from London to New York for New Year's celebrations. "I've only just joined this line and it's fine. I'm nearly there."

British Airways told customers flying to the U.S. from London to limit themselves to a single item of hand luggage and expect any gifts they're carrying to be unwrapped at security. Virgin Atlantic posted a similar announcement on its Web site. Both airlines said delays had been minimal.

Marta Ostovich, a 28-year-old archaeology student returning from a two-week vacation, said the situation was "definitely not as bad as I thought it would be."

"I was worried but I think I came needlessly early, as it seems to be OK," she said.

Winter weather is continuing to cause disruption across the UK with road, rail and air travel all affected.

Channel Tunnel services remain badly affected after Eurotunnel closed its car shuttle service to new passengers.

British Airways cancelled all European and UK domestic flights leaving Heathrow Airport after 1900 GMT.

Many roads in the Home Counties are gridlocked and the AA said London and the South East were hotspots for vehicle breakdowns.

Luton airport is closed until 0030 GMT and London City airport is shut. Stansted airport is open but flights may be subject to delays or cancellations.

Easyjet said it had operated over 80% of its flights, "albeit with some delays", over the last five days despite the weather, but added that further snow on Monday night could result in continued flight disruptions.

A Met Office severe weather warning is in place for ice in many parts of the UK, where snow freezing on the ground is causing treacherous conditions.

Temperatures are expected to fall to 1C (34F) in central London overnight, -4C (25F) in Newcastle, -3C (27F) in Glasgow, -4C in Manchester and -1C (30F) in Cardiff.