“All of our MARKETS have been quite

strong. So what we are seeing from an AIRLINE point of view is not what we are seeing from a MARKET point of view”

I t was a gap, but one that Willie Walsh had been meaning to fi ll for some time. The Irish-born chief executive of International Airlines Group (IAG) fi nally visited the southern hemisphere’s largest city, Sao Paulo, this summer. Like many business executives, Walsh

had previously focused on the growing Asian markets, clocking up his frequent fl yer rewards with visits to cities like Mumbai and Hyderabad; Shanghai and Hong Kong; even Moscow. It meant that the ‘B’ in the BRIC acronym, designating the four largest emerging economies (Brazil, Russia, India and China), had remained largely unexplored territory. In fact, until this year Latin America as a whole had not been a top priority. British Airways (BA), where Walsh used to be the boss until this year’s merger with Spain’s Iberia, fl ew to Sao Paulo (on the way to Buenos Aires) and Rio de Janeiro. But Walsh admits the investment was not on the scale it could have been. The merger with Iberia has changed all that and now the Spanish- and Portuguese-speaking countries on the continent are very squarely in Walsh’s line of sight.

He has been in Sao Paulo to see the BA and Iberian operations and also to lead a trade mission of 12 small and medium-sized enterprises (SMEs) from the UK with his London Chamber of Commerce and Industry president’s hat on.

STRONG MARKETS Walsh has been keen to fi nd ways to encourage more SMEs to trade overseas and not miss out on the opportunities available in Brazil, which is forecast to remain one of the world’s healthiest economies this year, despite its reliance on global demand for its commodities. The wood-panelled lounge of

OneWorld Alliance partner United Airlines at Sao Paulo’s Guarulhos International Airport is more a nod to the redwoods of North America’s west coast than the Amazon rainforest. But it is here that Walsh shares his thoughts on the state of business travel and IAG’s plans. He says neither IAG nor the London Chamber have seen the expansion in numbers of SME exporters that they would like. The low cost of modern communications technology should mean

that more SMEs can trade overseas more easily. But that does not necessarily mean they are jumping on planes to meet their overseas customers. “We have not seen a big change,” he states. “ It is one of the things we are trying to do with the Chambers. We did a bit of research recently that showed that very few SMEs are exporting and very few are considering exporting. “But in terms of travel patterns, we have not seen any major shift. It is something that we do look at closely. All of our markets have been quite strong. So what we are seeing from an airline point of view is not what we are seeing from a market point of view.” Walsh says, SMEs aside, demand for

his premium-priced seats was strong in the fi rst half of the year. “We would expect that to slow down as we are getting to what we thought was the peak back in 2007,” he asserts.

“The general mood is very pessimistic at the moment and we all remember what happened in September 2008. Remember back before then it was all fi nancial services, credit crunch, everybody worried. But things were still

12 November 2009: BA confi rms a preliminary agreement to merge with Iberia, creating the world’s third-largest airline in terms of annual revenue

21 January 2011: BA / Iberia merger is completed, formally creating the International Airlines Group (IAG)

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