Comment: Walsh flying high as IAG returns to profit

WHAT does Willie Walsh do next? Only 52, the pugnacious Irishman and ex-Aer Lingus pilot has done the impossible and flown his unwieldy International Airlines Group (IAG) back into the black.

IAG consists of BA and Spain’s flabby flagship carrier Iberia, plus BMI (now absorbed into BA) and the Spanish budget airline Vueling.

The group posted an operating profit of €770 million (£631m) for 2013, compared with an equivalent loss the previous year. Passenger revenues are up and fuel costs down.

Walsh took over BA in 2005, just as oil prices went stratospheric and the global economy headed for disaster. Then in 2010, transatlantic airspace was closed by the eruption of a volcano in Iceland. Who’d want to run an airline in these circumstances? Answer: Walsh, who is good at keeping his nerve.

Last year, losses at Iberia were running at some £820,000 a day. But Walsh faced down the Spanish pilots’ union (he’s an ex-trade unionist himself) and has just signed a deal freezing wages till 2015. Walsh wants Iberia because (properly run) it is the brand that can command access between Europe and the growing Latin American market. Meantime, armed with the Heathrow access slots acquired by taking over BMI, Walsh has focused BA on developing profitable long-haul routes to China.

Walsh’s IAG faces a threat in the shape of competition from Gulf-based rivals Eithad, Emirates and Qatar Airways. These have access to private oil wealth and are using it to turn the Gulf into a global hub. Eithad, which plans to start operating from Scotland next year, has been buying into under-performing European carriers, and has Italy’s Alitalia in its sights.