updated 9/22/2005 4:36:41 PM ET 2005-09-22T20:36:41

Sir Rod Eddington on Thursday used his last public speech as British Airways chief executive to berate the U.S. for its use of "protectionism" to prop up failing domestic airlines.

"America, the land of the free, is turning itself into the land of the free ride," he said.

Eddington's comments came just a week after Delta Air Lines and Northwest Airlines filed for U.S. bankruptcy protection, which means that four of the country's leading airlines are operating under Chapter 11 administration.

BA argues that Chapter 11 is used as another form of state aid and keeps the industry bloated at a time when it would benefit from a sharp reduction in airlines. "In the last four years, the U.S. airlines have soaked up $15 billion to $20 billion (€12 billion-€16 billion) of public subsidies and loan guarantees," Eddington Rod said. "They're operating in protected markets, they're hoovering up public funds and still they can't make a profit."

The European Union had been much better at turning down requests for help from failing airlines, he argued, with the "shaming exception" of Alitalia.

"The U.S. airlines are dumping capacity on the north Atlantic, distorting competition... They struggle to compete and, at some, the workforce has been demoralised. The more the government has tried to help, the worse things have become."

He accused the U.S. of hypocrisy in its approach to global free trade. "The lessons America has been imposing on third world markets with an almost pitiless ferocity apply to America just as much."

Eddington argued that the global airline industry, which had sales of $400 billion last year but losses of $5 billion, needed to be slimmed down radically. "The international industry is structurally unsound. There are too many flag-carrying fleets making vanity flights around the world."

He said the world did not need 300 airlines, which only existed because of "political demand", and called for easier rules on takeovers and "genuinely open skies" but accused the U.S. of blocking both.

"This is offensive because it is stupid, because it doesn't benefit anyone, because it encourages inefficiencies, rewards bad habits, drives out good money and replaces it with bad."

Eddington will be succeeded by Willie Walsh, the former chief executive of AerLingus, at the end of this month.

He also used the speech, delivered at an Aviation Club lunch in London, to stress that last month's industrial dispute involving Gate Gourmet, BA's catering supplier at Heathrow, was "not going to change the way airlines outsource."

© The Financial Times Ltd 2013. "FT" and "Financial Times" are trademarks of the Financial Times.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%