Bill Gleeson: Gill’s second choice - but he’s still first rate

Jan 9 2008 by Bill Gleeson, Liverpool Daily Post

LIVERPOOL Vision chief executive Jim Gill now knows how Steve McClaren must have felt when he was appointed England manager.

Mr Gill must be delighted that he has got the top job at the new business support and inward investment superquango that Liverpool City Council is setting up. Who wouldn’t be? After all, it comes with a salary of £150,000. Equally, though, he must have qualms about the fact that, like Mr McClaren, he very obviously wasn’t the first choice.

Just as Big Phil Scolari turned down the FA before the job was offered to McClaren, so the first person to be offered the role of chief executive of Liverpool PLC (to give the new quango its working title: the real name has yet to be decided) turned it down.

After having been offered the job, Michael King decided he would be better off staying put doing a similar economic development job in sunnier Jersey.

The idea that McClaren was second choice was recalled by the press every time England lost a game they were expected to win, which was quite often really. The same could happen to Gill every time there is some hitch in the running of the new quango.

But there is one crucial difference between the pair: Gill should have been the first choice all along.

He has worked in Liverpool, with Liverpool Vision and English Partnerships, for many years. Before that, he worked for Amec and the Government as a senior civil servant. He is both experienced and knows the patch as well as anybody, and will be able to provide continuity at what is an exciting time for the city.

EASYJET and Ryanair both saw their share prices fall after EasyJet revealed its load factors had fallen during 2007.

Both airlines have been busy expanding rapidly in recent months, buying new planes and starting new routes. Liverpool John Lennon Airport has been one of the principal beneficiaries from the airlines’ investment.

Now, however, City investors fear yesterday’s news about falling load factors is a sign that the no-frills airlines have been over- optimistic in their assessment of the market place and that the sector is struggling to absorb all of it’s expanded capacity.

EasyJet said its load factors were down 2.2 percentage points last year to around 79%. Future profits, the analysts worry, will be lower than previously forecast. As a result, the airline’s shares fell 14% to 460p, which compares to a year high of 743p in April. Ryanair’s shares were down 5% too.

Another sign of the current troubles is that Ryanair appears to have embarked on a campaign of distress marketing when yesterday it launched what it said was its biggest-ever January seat sale. It is offering 2m seats for £10, including taxes and charges, and has a buy one, get one free deal for passengers who book flights online today or tomorrow.

The City analysts are attributing the share price falls to current economic uncertainties arising from high oil prices and belt- tightening by consumers in the wake of the credit crunch, but this may be only half the story.

If the analysts are correct, then the hope remains that the passenger market, and the airlines’ growth, will resume at some point in the not too distant future. But this could be too optimistic. Consumers could be taking fewer flights for reasons other than temporary nervousness about high interest rates. Airlines are increasingly criticised for their environmental impact. If that trend escalates, then the consequent down-turn in passenger traffic may make temporary wobbles about the credit crunch look insignificant.