Outlook: No sign of banana skins at Royal Bank of Scotland Group

Airlines grounded; Greenspan/Aging; Six Continents

To varying degrees, all the big clearing banks have looked glum this reporting season, with rising bad debt provisions and falling profits. All, that is, except Royal Bank of Scotland Group, whose chief executive, Fred "the Shred" Goodwin, looks ever more pleased with himself every time he appears in public. He's got good reason. Thanks to the NatWest takeover three years ago, profits and revenues are still rising, even as rivals struggle to achieve growth.

NatWest is beginning to look like one of the most value creative takeovers of all time. Mr Goodwin can take a good deal of the credit. The integration has been flawless, and he has more than delivered on his cost cutting and synergy benefit promises. But there's more to it than that. Unlike most of its rivals, RBS seems to be generating some genuine organic growth, with revenues in the second half up an impressive 12 per cent on a year earlier.

Not one to hide his light under a bushel, Mr Goodwin proudly boasts that over the past three years RBS has grown an Abbey National in terms of income, though thankfully not in any other respect.

It's only a matter of time before he slips on a banana skin, envious rivals mutter, but there's very little sign of mistakes being made or problems building for the future. The only obvious danger would seem to be that margins are just too high to be sustainable. HBOS and others want his customers, and they are cutting prices to get them.

Mr Goodwin remains sanguine. Growth will plainly be more difficult from here on in. There are no more transforming deals he can do domestically, and cautious Scottish banker that he is, anything of real size overseas would be far too high risk for him to contemplate. Good levels of organic growth plus some bolt-on acquisitions in the UK and US are none the less still possible, he insists, and given his record, who would doubt him?

Airlines grounded

Concorde has never recovered from the blow to its credibility that was dealt by the crash near Paris three years ago. The atrocities of 11 September just made matters worse, with one chief executive who once regularly flew the Atlantic on Concorde telling me candidly that he's never used it since because it is too obvious a target for a terrorist rocket attack.

For some, yesterday's news that an Air France Concorde lost part of its rudder in mid-flight will be the final straw. But the main reason British Airways has grounded two Concordes and is considering the retirement of the remaining five is that the boom is over, and the investment bankers that used regularly to pack these extraordinarily beautiful, if environmentally unfriendly, supersonic jets, many for no other purpose than to say they flew Concorde, have vanished, some of them for good.

Those that remain in jobs have found they don't need to fly so much, even when they've got a deal on, and with the boom times over, the extravagance of bygone years seems in any case somehow inappropriate. War against Iraq will certainly ground the entire fleet, at least for the duration, and if the war proves prolonged, they may never return.

It is impossible to know how important Concorde is to British Airways. Its value went way beyond the not inconsiderable profits it once generated; it was also a totem, a prestige service shared only with Air France that was an integral part of the BA brand. It is symptomatic of the degree of pressure on airlines to cut cost and uncommercial activities that BA should even consider scrapping the service, for once it is gone BA becomes just another airline, with little to distinguish it from others.

BA's central strategy of focusing on business travel has been poleaxed by the downturn, and just to stay in business it has been forced to compete in the same space as the low-cost airlines, offering deep discounts to passengers willing to fly at unpopular times. Survival is the name of the game, and if that means cutting Concorde, so be it.

Greenspan/Aging

It seemed more than appropriate that Alan Greenspan should have been summoned yesterday to give evidence before the Special Senate Committee on Aging. He is, after all, 76 years of age, and at a time of life when the zimmer frame beckons, Mr Greenspan continues robustly to head the US Federal Reserve, where he still likes to run up the stairs given half the chance.

Mr Greenspan's message was a reassuring one – that although an aging population poses plenty of policy challenges, it doesn't necessarily mean economic stagnation and decline. Fortunately, he concluded, the US economy is uniquely well placed to make the necessary adjustments, with its open labour markets, innovative capital markets, and an open society receptive to immigrants.

On the other hand, he wasn't so sure about Europe and Japan, where the problem of declining fertility and increased life expectancy is expected to produce an even more acute problem than in the US. Britain, as ever, stands somewhere in between, both in terms of the demographics of its age profile and the policy choices it poses. It shares some of the attributes of the US, and some of those of Europe too.

Greater life expectancy is, of course, a wonderful thing, particularly when combined with the growing likelihood of decent health into the twilight of your years. But it also brings with it an increase in the ratio of elderly to the working population. The so-called elderly dependency ratio has been rising for 150 years, with only a brief interruption for the baby boom generation born in the immediate aftermath of the Second World War. As that generation reaches retirement age, which it begins to less than 10 years from now, the ratio will rise markedly reaching levels of perhaps 30 per cent or higher by 2030 in some regions of the world.

Countries best placed to cope with the phenomenon are those with the most highly developed private pension arrangements. Those that have little or none, or which haven't addressed the implicit contract of state provision, will be in deep trouble. According to Mr Greenspan, the phenomenon makes existing social security and Medicare programs unsustainable in the long run even in the US, short of major increases in immigration rates, a dramatic acceleration in productivity growth well beyond historical experience, a significant increase in the age of eligibility for benefits, or the use of general tax revenues to fund the benefits.

By implication, the position in Europe and Japan is a whole lot worse. Countries that don't address these issues now will find themselves having to impose an ever higher burden of taxation on an ever smaller proportion of the population, the effect of which would eventually be to drive out the best of the young talent to the US and other low-tax regions.

Mr Greenspan thinks higher productivity and increased working life might provide some of the solution, and he cites various historical examples to show that labour shortage can of necessity be a spur to labour-saving innovation. But outstanding rates of productivity growth also requires economies to be flexible and competitive. Some of our European neighbours have an awfully long way to go.

Six Continents

Put up or shut up, Six Continents will no doubt say in response to the non appearance of Hugh Osmond's bid this week. Patience, responds Mr Osmond, who is still sounding out the institutions as to what they really want. The bid will be on the table probably early next week, when shareholders will be asked to chose between Mr Osmond and the present management's plans for a demerger. If Six Continents pushes ahead with the demerger EGM and loses, then it's game, set and match to Mr Osmond. A vicious proxy battle looms.

jeremy.warner@independent.co.uk