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Interesting news from the British Airways / IAG Capital Markets Day in the City

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Yesterday was the annual International Airlines Group Capital Markets Day, where IAG gives a public presentation for its bondholders on the performance of BA, Iberia, Vueling and now Aer Lingus.

The slides are made available to all.


On the off-chance that you have something better to do on a Saturday than read 117 slides, here are a few key points:

Keith Williams is to retire as CEO of British Airways next year.  He will be replaced by Alex Cruz, who is currently CEO of Vueling, IAG’s Barcelona-based low cost carrier.  (This is not in the slide pack but was announced separately.)

The contribution of Avios to cost savings and profit improvement was €20m over budget, partially due to “improved access to capacity”

Total IAG fleet to grow from 483 aircraft today to 578 by 2020

15%-25% of savings from falling fuel prices are expected to be ‘retained’, the remainder will pass through into lower fares

“Every 5 minutes over 6 IAG aircraft depart and AGL issues over 1 million Avios”

“Greater connectivity and choice prompts more IAG relevance across the UK regions – 50% of UK [Avios] collectors now come from the regions”

Total Avios membership of 7 million, of which 5.4 million are in the UK and mainland Europe

“Investor seminar in January to explain [Avios] business fundamentals, future targets and Group accounting” (I look forward to a HFP reader forwarding me the slides from this ….)

Short-haul A320 design (excluding the seats) to be harmonised to allow aircraft to be swapped between BA, Iberia, Vueling and Aer Lingus with no need for additional crew training

Seat configuration of the new A350 aircraft still a secret – see page 77

Wi-fi on 90% of long-haul aircraft by 2019.  Wi-fi to be added to short-haul aircraft starting in 2017, no timetable for speed of roll-out.

British Airways short-haul has “returned to profitability” (although this is always a debatable point because no-one knows how BA does – or should – allocate a £2,000 Amsterdam – Heathrow – New York and back fare between short-haul and long-haul)

Short-haul punctuality out of London is better than Ryanair or easyJet

Club World to lose 10% of seats on the Gatwick Boeing 777-200 fleet

First Class to be removed entirely from the Heathrow Boeing 777-200ER fleet

Boeing 787-9 likely to be used to open up new markets in Latin America

The nine ex-Virgin Little Red slots at Heathrow have returned to BA

11 Boeing 787-9 to be delivered in 2016 along with the two A380’s (takes BA to 12 in total)

Johannesburg under serious consideration as a new Iberia long-haul destination

Vueling increasing legroom in rows 1-4 for business class passengers and adding cabin dividers

More, lots more, in the slides if you want it.

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Comments (45)

  • shd says:

    How come Vueling is going to offer more legroom in Business rows 1-4 when BA have worked so hard to make sure Club Europe features Economy legroom throughout the fleet?

  • pauldb says:

    Despite the separation and standardisation of availability, it didn’t sound like AGL was being prepared for a sale. They seem to talk about it being too important to the IAG platform to let it out of the group’s control.

    • Rob says:

      I agree, and the examples of companies where it has spun off have not been pretty. The programme stops being a tool you can use to flex your yields and simply becomes a trading partner to whom you sell 2 J and 4 Y seats on every flight at a deep discount.

  • Jeff says:

    Completely O/T

    Uber started in Edinburgh yesterday. Not exactly a fan of these geezers myself but will happily use a discount code as a one-off…if any good ones exist?

  • JamesWag says:

    I hope they showed the new Emirates advert with that Rachel from Friends in as it’s absolutely spot-on.
    BA is a joke compared to Emirates, IAG need to step up their game.

    • dicksbits says:

      Another good point! All my colleagues laugh at BA compared to many other carriers. Even in Y.

  • Trevor says:

    Will be good if/when the bring back the JNB route to give better value redemption option to SA. But as commented above, let’s hope it’s better than before.

    Can’t believe how slow BA is at bringing in wi-fi when so many other airlines are so far ahead already.

    Can’t believe BA has better punctuality than the low-cost carriers. In my experience they generally leave on time, while I can’t recall a BA flight that ever left on time!

    • Stats says:

      Airline Punctuality reported by the CAA is normally based on pushback time from their stand…that can happen whenever the captain says the aircraft is ready…doesnt matter what the arrival time is…

  • MIM says:

    Seriously? BA uses the term “the regions” in 2015, to refer to the 87% of the population who live in Notlondon…?

  • Anthony Dunn says:

    The entire focus of the 2015 Capital Markets Day presentation was on cost savings and generating synergies across the IAG stable of brands/operating companies. Now, from an accounting/shareholder perspective, that makes complete sense. However, notwithstanding that the clue may have been in the title (!), the entire focus was financial and the only mention that the dear old fare-paying passenger received was in the context of increasing Revenue (per) Available Seat Kilometres (RASK) and reducing/containing Cost (per) Available Seat Kilometre (CASK). So some 90% of IAG planes are to have onboard wifi by 2019. Big bloody deal! It’s only there as an additional revenue generator, not as a freebie. The only other mention the passenger got was in the context of seat “densification”… Trash the language first and then passenger blood circulation next.

    Frankly, if the CMD was meant as an advert for anything, it has been to demonstrate comprehensively that the only perspective that counts is that of the finance/accounting function. Forget the passenger experience or customer service.

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