British Airways (Hansard, 10 May 1982)

§ 11. Mr. Jim Marshall
asked the Minister for Trade if he expects British Airways to make a profit in the current financial year.

§ Mr. Sproat
I expect British Airways to make a big improvement in their financial performance this year over the two previous years. I hope that they will make a profit.

§ Mr. Marshall
With the reconstruction of British Airways into three operating divisions, will the Minister give an absolute assurance that no division will be sold off until the three individual divisions are all profitable?

§ Mr. Sproat
I thought that I should be able to agree easily to that question by saying that it is not the present intention of Sir John King to sell off any of those three divisions piecemeal, but it is not dependent on when those individual profit centres become profitable. Privatisation of British Airways will go ahead as fast as possible in overall profit.

§ Mr. Bill Walker
Does my hon. Friend agree that British Airways are unlikely to make a profit if they are plagued by idiotic strikes, such as that by the baggage handlers, and by practices such as flying empty aircraft from Belfast to Glasgow every evening? Would it not be better to take the example of the Scottish division, which shows the way forward to making a profit?

§ Mr. Sproat
I am grateful to my hon. Friend for drawing to the attention of the House the satisfactory conclusion that has been reached in Scotland, where a predicted £6 million deficit has been turned into a predicted £1½ million profit. I hope that British Airways as a whole may benefit from that.

§ Mr. John Smith
The Minister will be aware that there have been repeated press reports that the Government may write off £600 million of British Airways indebtedness to facilitate the floating of shares on the private market. Will he give a clear undertaking to the House that the Government will contemplate no such thing, which would be a gross fraud on the British taxpayer.

§ Mr. Sproat
The right hon. Gentleman is always inviting me to comment on either press reports or hypotheses. That is a profitless hypothesis. I suggest that the right hon. Gentleman waits to see what happens. Privatisation cannot come soon enough for me, and I hope that the same is true for him.

§ 12. Sir William van Straubenzee
asked the Minister for Trade whether it is still his intention to sell shares in British Airways.

§ Mr. Sproat
Yes, Sir.

§ Sir William van Straubenzee
Does my hon. Friend realise that that is welcome news to a large number of my constituents who work for British Airways and who would much rather work for a private concern than for a nationalised one? Do I understand that previous exchanges across the Floor of the House mean that reorganisation within British Airways, which has been touched on, will not of itself hold up the Minister's medium and long-term intentions?

§ Mr. Sproat
The formation of a number of new profit centres will enable the British Airways management to obtain a far tighter grip on British Airways, thus enabling an even quicker return to profitability. I thank my hon. Friend for his remarks in support of the Government's policy of privatising British Airways. It is our intention to make British Airways into a profitable private sector company that can be looked on with pride by its staff and shareholders and by members of the public.

§ Mr. Hill
My hon. Friend, the chairman of British Airways, Sir John King, the board of British Airways and its staff should be congratulated on making what is a long overdue change to bring back continental and inter-continental departments in the routes that British Airways operate. It was a mistake in the past when BOAC and BEA were joined. Does my hon. Friend agree that British Airways should now be on a glide path to profitability? Will he help them in any way that he can so that they can re-equip with Boeing 757s and 767s as soon as possible?

§ Mr. Sproat
I shall certainly do everything that I can to encourage British Airways to get back to profit as soon as possible. I welcome my hon. Friend's suport for the measures that Sir John King has recently taken to get a tight grip on the management and future profitability of British Airways. I especially welcome it coming from a former member of the old corporation.

§ Mr. John Smith
Will the Minister make it crystal clear that there can be no question of the Government writing off British Airways' debt liabilities to facilitate the sale of shares? Will that option be in no way considered?

§ Mr. Sproat
I do not know how often I must answer these questions from the right hon. Gentleman.

§ Mr. Smith
Until the hon. Gentleman answers them.

§ Mr. Sproat
The right hon. Gentleman must wait for details of the privatisation of British Airways. When the time comes, he will see what we hope to do, and we hope to have his support.

§ Sir John Biggs-Davison
I welcome the Government's policy of privatisation, but will not prospective shareholders wish to know whether the craven refusal of British Airways's crews to stay overnight in Northern Ireland, which has cost thousands of pounds, has ended?

§ Mr. Sproat
Investors will wish to know that nearer the time. They will be told nearer the time. The exact details of the Belfast flights are a matter for the board of British Airways.