British Airways chief pours scorn on Richard Branson's space odyssey

IAG chief Willie Walsh (left) and Sir Richard Branson
IAG chief Willie Walsh (left) and Sir Richard Branson

The boss of British Airways owner IAG has poured scorn on Sir Richard Branson’s groundbreaking plans for space tourism.

After years of trading insults over Transatlantic flying, IAG chief executive Willie Walsh took a swipe at Sir Richard’s Virgin Galactic spaceflight firm, which debuted on the New York Stock Exchange on Monday.

In response to whether he felt Sir Richard could make space tourism successful, Mr Walsh joked: “He won’t have much competition. He’s not very successful when he does have competition.”

Shares in Virgin Galactic have fallen by more than a quarter since it went public at the start of the week, wiping more than $600m (£464m) off its value.

Sir Richard Branson’s space tourism venture became the first company of its kind to trade publicly on Monday after a merger with Social Capital Hedosophia, a blank cheque investment firm, in a so-called “reverse IPO”.

The deal valued Virgin Galactic at $2.3bn but shares have steadily declined since then. After opening at $12.34 a share on Monday they fell as low as $9.03 yesterday, a drop of 27pc.

The company has said it does not expect to begin space flights until next summer, a timeline that could lead to it breaking even in 2021. It is believed that investors in Social Capital may have used the listing as an opportunity to sell out.

IAG chief executive Walsh and Virgin Group founder have endured a tempestuous relationship for some time.

In 2012 Mr Walsh attacked Sir Richard’s representations that a BA takeover of BMI would reduce competition as “irrelevant”.

In the same year, Mr Walsh bet his nemesis that Virgin Atlantic would not be around in five years time with a pledge that whoever won would get to knee the other in the groin - a wager that both parties claimed they had won.

Despite the jibe, Virgin Galactic - which floated with a value of $2.4bn (£1.9bn) - does face a few rival attempts to commercialise space travel from the likes of Tesla chief Elon Musk and Amazon founder Jeff Bezos.   

Virgin Galactic founder Richard Branson poses before ringing the bell to commemorate the first day of trading on the New York Stock Exchange (NYSE)
Virgin Galactic founder Richard Branson poses before ringing the bell to commemorate the first day of trading on the New York Stock Exchange (NYSE) Credit: JOHANNES EISELE/AFP

Mr Walsh’s barbed comments came as he repeated statements earlier this month that he is confident BA can reach a deal with warring pilots, whose industrial action over pay sparked a wave of cancellations and holiday chaos earlier this year.

Strikes by both pilots and airport staff cost the flag carrier €155m  (£134m) in the three months to Sept. Third-quarter profit fell 8pc to £1.3bn - in line with City expectations.

Aviation onlookers are waiting for the outcome of the sale of Thomas Cook’s take off and landing slots, the most valuable of which are at Gatwick.

Mr Walsh said IAG had bid for three slots but added that the timings on offer were not particularly attractive. Airline typically value morning take-off times more than those in the middle of the day.

He also appeared to soften his tone on cash-strapped airline Norwegian, insisting that IAG no longer had an interest in buying the low-cost carrier.

The IAG chief reserved judgement on whether Norwegian would make it through the lean winter trading months. He is one of a number of airline bosses to have previously claimed that Norwegian will be the next carrier to fail.

“I do wish them well,” Mr Walsh said. 

IAG’s results came as continental rival Air France KLM disappointed analysts with a profit of €900m for the third quarter of 2019, down 15pc on a year earlier.

While stock brokers are quietly optimistic about the future of IAG -a group which includes Aer Lingus, Vueling and Iberia as well as BA - the row with pilots remains concerning.   

Damien Brewer, an analyst at Royal Bank of Canada, said: “Until BA’s dispute with its pilots is not yet settled there is scope for further material disruption and subsequent profit downgrades remain for the key Christmas travel period.

“The lack of new strike date announcements is encouraging, we think.”

Gerald Khoo of Liberum said that IAG’s share price does not adequately reflect a major boost in the amount of profit it squeezes out of passengers, with margins now matching the leading low cost airlines. 

Mr Walsh, 58, also hinted he could retire soon, saying: "I will not be in this job when I’m 60."

When he got the job in 2005, Mr Walsh claimed he would be retired at the age of 55.

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