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British Airways

Volume 23: debated on Monday 10 May 1982

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asked the Minister for Trade when he expects to receive the annual report of British Airways on its accounts for the year ended 31 March 1982.

Have not British Airways' subsidiary companies contributed £20 million profit a year to British Airways as well as an important cash flow throughout the financial year? As these are well-run and profitable nationalised concerns, will the Minister confirm a report in The Guardian on 29 April that there is no intention to sell off profitable subsidiaries such as British Airways Helicopters and International Air Radio?

No, Sir. I shall not confirm any report in The Guardian newspaper. I shall, however, tell the hon. Gentleman that if the board of British Airways decides that it wants to sell off the subsidiaries, that is its decision and we shall not stand in its way.

In expressing my full confidence in the chairman of British Airways, may I ask what discussions my hon. Friend has had with him about deregulating air fares between this country and Europe? It now costs more in terms of seat pence per mile to fly economy to any capital city of Europe than to fly Concorde across the Atlantic.

I have had extensive discussions with Sir John King and other members of British Airways about the position in Western Europe. I assure my hon. Friend that it remains the policy of Her Majesty's Government to introduce much greater liberalisation into the European regime.

Have the Minister's discussions with the chairman included any examination of the position whereby first-class, senior officials of British Airways are now being made redundant? Is he taking any steps to make sure that their expertise is not lost to an important sector of industry?

That is mainly a matter for the board of British Airways. I am certain that the hon. Gentleman's point will be well taken by the board.

Is my hon. Friend aware that the accounts of British Airways would be greatly improved and the service to the travelling public greatly enhanced if such activities as retail shops, building maintenance, aircraft cleaning and, above all, catering, were hived off to private enterprise—none of these services is at the moment profitable—leaving British Airways to conduct its proper business of running aircraft.

My hon. Friend makes an extremely interesting point which will be noted, I am sure, by the board of British Airways. Among the main objectives of Sir John King and his board are restoring British Airways to profit and giving a better service to the travelling public.

Will the Minister recognise that most airlines are going through difficult times? Will he ensure that no Government pressure is applied on British Airways to break up and sell off various parts of the airline? Does he realise that we have already lost Laker Airways and that other airlines may go bankrupt if British Airways are not maintained?

I assure the hon. Gentleman and the House that there will be no improper pressure from the Government for British Airways to sell off subsidiaries. But, if that is the decision of the British Airways board, we shall not stand in its way. It is our wish to see British Airways profitable as soon as possible and privatised as soon as possible.

Will my hon. Friend assure the House that the Government will do nothing by their policies to impede progress by British Airways towards the profitability that we all seek? In this regard, will my hon. Friend facilitate the concentration of British Airways scheduled services at Heathrow airport, enabling them, especially, to transfer from Gatwick to Heathrow their scheduled services to the Iberian peninsula?

In regard to the latter part of my hon. Friend's question, I cannot give him any such assurance at this time. As he knows, complicated and intricate discussions are taking place. On the first part of his question, my hon. Friend can be certain that no Government in the history of this country will do less than this one will to stand in the way of British Airways returning to profitability.

What did the Minister mean by saying that no "improper" pressure will be brought to bear on British Airways? Will he bring any pressure to bear on British Airways to sell off subsidiaries? Will he say whether the Price Waterhouse report proposed a major reconstruction of British Airways, whether it considered the possible injection of £600 million into British Airways and whether it considered the possible sale of subsidiaries? Is it not disgraceful that a British nationalised industry should be treated in such a cavalier fashion by the Minister, who will not even publish a major report of significance to a national institution?

On the first part of the hon. Gentleman's question, I plead guilty to tautology in talking about improper pressure. No pressure that I brought to bear would ever be improper. I need to bring no pressure on British Airways to restore itself to profitability. Sir John King has the airline on the right lines towards exactly that end.

The Price Waterhouse report was commissioned by British Airways. It is for British Airways to decide whether they want to publish the report. British Airways have decided that they do not want to publish it. I shall not quarrel with that decision.