ALEX BRUMMER: Bid for Heathrow mastery as British Airways targets Aer Lingus

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British Airways owner IAG has never seen a landing slot at overcrowded Heathrow Airport that it does not like.

It already controls some 53 per cent or so and could increase its domination if it were allowed to take over Aer Lingus which has the third largest number of slots at the UK’s most important hub airport.

If the next thing in air travel is long distance point-to-point, with more flights to Europe from the fast growing Pacific trade, then the more slots BA can get its hands, on the better it will be for investors.

Aer Lingus is an obvious target but not an easy one. If BA is to succeed, the feisty Irish boss of IAG, Willie Walsh, will have to win over Ryanair, the Irish government and UK regulator the Civil Aviation Authority. It will also need to convince shareholders that it is not paying over the odds.

Busy terminals: Heathrow is Britain's most important hub airport

Aer Lingus’s initial response to a potential offer was to reject it, but that may simply be a matter of price. Ryanair might bargain for more slots at Gatwick or other airports in exchange for putting its Aer Lingus stake up for sale. Having been blocked from a full takeover of the Irish flag carrier, Ryanair boss Michael O’Leary cannot have much reason to hang on.

The far bigger question at Heathrow is one of capacity. Sir Howard Davies, who heads the government’s airport commission estimates a £19billion bill for a new runway, which among other things will push up the landing fees, already the highest in Europe.

If London wants to be a modern city state and British airports are not to be outflanked by Schiphol in Amsterdam, Frankfurt and Paris the UK will need to stop prevaricating and get on with the job.

Negative thoughts

Plunging oil prices are having a dramatic impact on the way the world’s central banks go about their business. The rouble collapse has forced Russia to raise interest rates to 17 per cent. The eurozone, Switzerland and Japan are moving in the opposite direction.

Fear of deflation has been intensified within the eurozone that has had a negative -0.2 per cent rate on deposits since September.

Its objective is to stop commercial banks leaving money with the European Central Bank and to get them to lend instead. The ECB is under increasing pressure to begin quantitative easing despite the historic objections of its most powerful member, the Bundesbank.

Another central bank that has been forced to act as a result of events in Russia is the Swiss National Bank.

The rouble meltdown has led to capital flight from Moscow to Zurich and the Swiss have responded by imposing a 0.25 per cent negative interest rate. Still, the oligarchs might regard the 0.25 per cent as a price worth paying given the speed of the rouble decline and fears of some further kind of emergency action by the Kremlin, including a possible debt default.

In Japan, the governor of the central bank Haruhiko Kuroda is in a pitched battle to continue monetary easing again, amid deflationary fears of which Japan has more experience than most.

Falling oil prices look to be having the opposite impact in the fast growing Anglo-Saxon economies. Federal Reserve chair Janet Yellen said the US central bank would take ‘ a patient’ approach in deciding when to raise borrowing costs.

The next move would likely be upwards and is a couple of meetings away, which would probably mean April 2015.

Notionally, one would expect that the Bank of England might again postpone the evil date for normalising interest rates given the clear fall in inflation and the possibility that governor Mark Carney will soon have to make his excuses to the Chancellor for undershooting the 2pc inflation target.

Carney also has said the drop in oil prices is ‘unambiguously positive’ for UK growth. That suggests that if the economy should accelerate and the interest rate-setting Monetary Policy Committee could move to increase rates earlier rather than later, if only to kill off a consumer bubble.

If anything the oil price plunge has accentuated the difference between Europe and its Anglo-Saxon counterparts.

Ice Queen

Very slowly but surely the taxpayer is starting to see the return of some of the cash in laid out in the financial crisis.

The Treasury has announced that it has managed (amazingly given the state of the Icelandic economy) to repatriate a further £1.36billion of the money it put into Icesave, an account run by Landsbanki that was wiped out in 2008.

With the latest payment from Reykjavik it has now recovered £3.82billion for the Exchequer, or 80 per cent of what it provided to the Icelandic institution, and it has only taken six years.

Negotiator Andrea Leadsom, the economic secretary to the Treasury, deserves a dip in the steamy Blue Lagoon.