IATA’s Walsh clearly mocks Biden, Johnson and their failure to reopen the US-UK travel market

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What should a poor group of US and UK airline CEOs do when President Joe Biden and Prime Minister Boris Johnson announce with great fanfare the creation of a “New Atlantic Charter” which they say will eventually reopen air travel between their two countries but that in fact gives the carriers nothing at all like the reason they were loudly demanding from the two leaders a week ago.

Well, in this case, they presumably brought in the heaviest hitter in all of global aviation activity to tell Johnson and Biden, in his famous and brutal way, where they can put their gaudy but otherwise empty “Charter”. .

On Friday, Willie Walsh, CEO of the International Air Transport Association, retired CEO of British Airways and creator of International Air Group, the multinational holding company that controls BA, Spanish airlines Iberia and five other international airlines, ridiculed Biden and Johnson personally in an unusual situation. Friday edition of his IATA blog.

“Roosevelt and Churchill
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, who took real risks to meet face-to-face in a submarine-infested ocean, would be appalled if their vision of 1941 was associated with such a cautious approach, “Walsh said of what he called The two leaders ‘on the road’ “kick in the box” on reopening the economically critical travel market between the US and UK.

The night before, Biden and Johnson tried to sell their deal as the second coming of the WWII Atlantic Charter negotiated between US President Franklin Roosevelt and UK Prime Minister Winston Churchill. The original Atlantic Charter explained how no country would be allowed to gain any territory or world economic advantage after the war was over and the Axis Powers defeated. It is other objectives included:

  • The right to political self-determination would be restored to all nations
  • International trade restrictions would be drastically reduced
  • Global economic and social cooperation would be considerably strengthened
  • All people in the world would be free from fear and want.
  • The freedom of the seas would be restored for all nations
  • The use of force by nations against other nations would be prohibited and aggressor nations would be disarmed.

This famous agreement became the basis for the creation of NATO, the General Agreement on Tariffs and Trade (GATT) still in force and the United Nations.

On the other hand, Biden and Johnson’s new Atlantic charter, which lacks details and targets, calls for US-UK travel to be reopened – sometimes in the indefinite future, but only after always unscheduled meetings. between a newly created working group of seasoned technical experts in transport and economic policy from each government. It’s unclear when the task force is expected to reach an agreement to reopen normal travel between the US and UK, but it seems increasingly likely that by the time such rules can be established and that airlines will be able to make the necessary changes to their flight. schedules, staffing schedules and fleets, the economically critical second peak summer season will be largely or entirely lost.

This has surely disappointed the CEOs of British Airways and Virgin Atlantic in the UK, and of US airlines, Delta, United and JetBlue in the United States. On June 7, the CEOs of these six carriers held a rare joint video press conference to publicly plead their respective political leaders to announce an immediate reopening of the entire US-UK air transport market. United, closed since March 2020 in response to the global Covid-19 pandemic. This unusual joint begging session was prompted by the recognition by carriers that neither side had done much to make the issue an important topic for their personal meeting or the upcoming G7 summit. Airline bosses have all warned that failure to reopen travel between the two countries will cause them to miss a peak second summer season at a collective cost of $ 278 billion in lost travel industry revenue and wages of workers in both countries.

It is not clear whether Walsh was asked to respond by one or more of the airline chiefs, or whether he simply took it upon himself to convey the harsh message that the airline chiefs, still subject to political retaliation. potential from their respective political leaders, could not. Either way, he exploded with anger and disparagement against Johnson and Biden.

“To put a bit of context, many EU states already welcome vaccinated passengers without restrictions, while the UK and US (two of the countries with the lowest infection rates and rates highest immunization rates in one of the world’s major economies) are unable to make the decision to reopen their borders without appointing a committee to discuss it, ”Walsh said on his blog.

He concluded his blog, which was built around America’s upcoming celebration of Independence Day and the “freedom” of unrestricted travel, by demanding, “No more talk. No more “working groups”. Action is what is needed. Put the world back on the path to freedom.

He also demanded that Biden and Johnson change course and take advantage of the G7 summit last weekend to announce the reopening of travel between the United States and the United Kingdom by July 4. However, they did not. Next, Biden flew to Europe after the G7 summit to meet with NATO leaders on Monday and today in Brussels, and then with Russian President Vladimir Putin in Geneva on Wednesday.

When no announcement regarding the opening of the US-UK air transport corridor emerged from the G7 summit, Walsh presented a disturbing threat to Johnson in particular. Walsh told reporters on Sunday that he believed IAG
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may be forced to re-transform a rapidly declining British Airways company as a separate company because it is so dependent on revenue from transatlantic flights; income that is still denied to him after nearly 16 months of market closure imposed by the government.

Walsh, an Irishman, was CEO of British Airways when in 2011 he led the creation of International Airlines Group, now simply IAG. It was a mechanism designed by Walsh to merge airlines from different European countries without having to rewrite the foreign property laws in each country as well as the competition rules of the European Union. Walsh, who had tremendous success turning Aer Lingus in Ireland and then turning an already strong British Airways into a financial juggernaut, sees IAG’s creation, growth and financial success before the start of the pandemic as his crowning it all, whoever positioned its main unit, BA, is arguably the most influential airline in the world and the most successful in Europe. He retired from IAG a year ago before taking up his post in April as head of IATA, the industry’s global trade group.

Walsh’s intimate familiarity with BA, IAG, their financial situation and the competitive situation of struggling European airlines means he understands how much this would be a blow to British pride, BA’s financial health and the economy. British to see BA essentially emptied the international air conglomerate that it had founded ten years ago and of which it had effectively been the controlling entity since its creation.

And, as Walsh surely expected, his public suggestion that BA could be humiliated and spit out from IAG prompted a swift market reaction on Monday morning. IAG’s American Depository Receipts lost 3.5% of their already deflated value when OTC trading began this morning in New York. These ADRs remained lower for the remainder of the day and closed at $ 5.53.

Yet neither the United States under Biden nor the United Kingdom under Johnson seem in a rush to do anything about the still-closed US-UK travel market, even as both countries are rushing to open travel. between them and many other countries, including most European countries. On the contrary, both seemed much more interested in repositioning themselves and / or their nations in the post-Brexit era for Johnson and the post-Trump era for Biden.

Their agreement on the new Atlantic Charter, which is over 600 pages long, focuses much more on a new agenda far different from that promoted by former President Donald Trump and with which Johnson mostly agreed after taking the presidency of the Prime Minister in July 2019. In place of the prior approach emphasizing economic development and strong actions to counter aggressive behavior by Russia and China, Biden’s new Atlantic charter and Johnson emphasizes improving the climate crisis, the need to protect biodiversity, the further development of emerging technologies, building the capacity of both nations in cyberspace and emphasizing sustainable global development. These are all progressive political positions that Biden defended during the 2020 campaign and that he has strived to implement since taking office in January, and very different from the political direction Trump had set.

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