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British Airways will look to expand its operations in Madrid rather than London after it merges with Iberia, chief executive Willie Walsh told Friday’s Financial Times newspaper.
Walsh said BA would turn to Madrid if the new British government failed to address rising demand for flights.
Prime Minister David Cameron’s Conservative-Liberal Democrat coalition has scrapped plans for a third runway at London Heathrow Airport, the world’s busiest international passenger airport, which is BA’s home hub.
“You’ve got a fantastic airport in Madrid that has excess capacity that the Spanish government has invested in (and) Madrid’s local government has invested in, and we’ll grow there,” Walsh said.
“Growth is not going to go away. Growth will just leave the UK and go to other parts of Europe.
“BA will be able to access that growth because our assets are mobile and we can focus on developing Madrid rather than… London.”
Besides Heathrow, Cameron’s government has also ruled out new runways at London Gatwick, Britain’s second busiest airport, and its fourth, London Stansted.
BA, which is cutting costs and merging with Spanish rival Iberia in an attempt to return to profitability, has been hit hard by the global economic downturn, which curbed demand for air travel.
The flag carrier announced Thursday that Walsh has turned down his annual bonus for the second year in a row as the loss-making airline seeks to save cash.
BA said in its annual report that Walsh had declined to take his bonus worth 334,000 pounds (404,000 euros, 487,500 dollars), adding that no-one would receive cash bonuses for the second successive year.
The struggling airline published the 2009/2010 report as cabin crew returned to work after staging the latest wave of strikes in a long-running dispute over pay and working conditions.
Since March, BA has suffered 22 days of strike action, costing the company 154 million pounds, according to estimates from the Unite trade union.
Although the third wave of strikes ended on Wednesday, more action is widely expected to be announced unless a resolution to the dispute can be agreed.
The strikes were initially called over working conditions but the two sides have now resolved their differences on that issue but disagreement on the company’s removal of travel perks from striking staff remains to be solved.