Airline bosses criticise UK government over fall in pound
The head of Virgin Atlantic has called on the UK government to “consider reversing” course after its mini-Budget sent the pound tumbling to a record low and undermined investors’ confidence in the economy. Chancellor Kwasi Kwarteng’s plan to borrow more to pay for the biggest package of tax cuts since the 1970s unleashed turmoil in financial markets, with the pound plunging to as low as $1.035 on Monday. Virgin Atlantic CE Shai Weiss said Tuesday that he was concerned about the direction of PM Liz Truss’s government since it took office less than a month ago. “Truss said she would take difficult decisions upon entering into the role,” Weiss said. “Maybe they need to take more difficult decisions to reverse the decline of the pound and ensure this country is not left with . . . perceived weakness in international markets. “Sometimes all of us in this room should be humble enough to say that if I said something that is not working, maybe I should reverse course. That is not a bad thing to do,” he added. While the pound had already been dragged lower this year by the strength of the dollar, the currency’s decline accelerated after Kwarteng’s fiscal plan raised alarm over the sustainability of the UK’s public finances. With many of their most significant costs, including fuel, priced in dollars, airlines are among the most exposed to sterling’s weakness. Sixty per cent of Virgin’s costs are in dollars, while it generates only 30 to 35% of its revenue in the US currency. Willie Walsh, head of global airline lobby group Iata and former head of British Airways, said he had “a lot of sympathy” for Weiss’s intervention. “I think his criticism is well founded, particularly the additional challenge it will create for his company, given he will have a lot of sterling revenues and significant dollar costs,” he said. “It is very frustrating when you see these knee jerk government responses to some of the challenges they face. Clearly in an effort to make themselves look popular with the electorate, taking decisions that have massive economic impact on companies,” Walsh added.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2022-09-28/general/airline-bosses-criticise-uk-government-over-fall-in-pound
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Airline bosses criticise UK government over fall in pound
The head of Virgin Atlantic has called on the UK government to “consider reversing” course after its mini-Budget sent the pound tumbling to a record low and undermined investors’ confidence in the economy. Chancellor Kwasi Kwarteng’s plan to borrow more to pay for the biggest package of tax cuts since the 1970s unleashed turmoil in financial markets, with the pound plunging to as low as $1.035 on Monday. Virgin Atlantic CE Shai Weiss said Tuesday that he was concerned about the direction of PM Liz Truss’s government since it took office less than a month ago. “Truss said she would take difficult decisions upon entering into the role,” Weiss said. “Maybe they need to take more difficult decisions to reverse the decline of the pound and ensure this country is not left with . . . perceived weakness in international markets. “Sometimes all of us in this room should be humble enough to say that if I said something that is not working, maybe I should reverse course. That is not a bad thing to do,” he added. While the pound had already been dragged lower this year by the strength of the dollar, the currency’s decline accelerated after Kwarteng’s fiscal plan raised alarm over the sustainability of the UK’s public finances. With many of their most significant costs, including fuel, priced in dollars, airlines are among the most exposed to sterling’s weakness. Sixty per cent of Virgin’s costs are in dollars, while it generates only 30 to 35% of its revenue in the US currency. Willie Walsh, head of global airline lobby group Iata and former head of British Airways, said he had “a lot of sympathy” for Weiss’s intervention. “I think his criticism is well founded, particularly the additional challenge it will create for his company, given he will have a lot of sterling revenues and significant dollar costs,” he said. “It is very frustrating when you see these knee jerk government responses to some of the challenges they face. Clearly in an effort to make themselves look popular with the electorate, taking decisions that have massive economic impact on companies,” Walsh added.<br/>
