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

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.  You can download the entire 117 pages as a PDF here.


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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Important dates for your diary
Bits: Shop Small registration for supps, Flybe Firecracker sale, IHG sale ending
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  1. Interesting summary, ty. I had gone through all the slides yesterday but missed some of the info you’ve highlighted.

    Note: MAD-JNB was an IB route that was suspended sometime after IAG was formed in 2011. I remember thinking about using my staff travel benefits on the route, around about the time of the merger, but then the route was cancelled.

    • FIRSTclstraveller says:

      Correct, I flew on this route as well in late 2002 when it was operated by an A340 in 3 class configuration.

  2. Not sure I’m excited by 220-seat Vueling A321s in the pipeline. 🙁

    JNB would be a revived destination rather than new. I had the misfortune to use them in the late 90s. Connecting at MAD at midnight was no fun when the incoming ex-LHR flight was late. On board service was minimal.

    I’m sure they’d be better now and, hey, it could just work for us to SA.

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

    No sure what this means! Could be that lots more people are flying IAG from regions which given the acquisition of are Lingus could be true.
    Perhaps the Lonfon Airways Brand is beginning to hurt.
    A million Avios every 5 minutes was another interesting fact. Pretty pointless however as the level of redemption will be a fraction of this.
    The masters of spin continue with their magic. Bottom line nothing new here continue with ex EU and quality carriers

    • I am pretty sure that the number of people who have joined Avios in 2015 purely to be able to redeem on Vueling from the regions (which is not advertised as a BA redemption partner and requires that person to open an Iberia account, have some activity, wait 90 days and then do a transfer) is precisely zero.

      Unless somehow the Leeds Bradford service has led to a massive surge of new members across Yorkshire!

      • Flybe also scrapped their scheme and switched to Avios although I suspect the average points earned by a collector in Dartmouth is slightly lower than one in Kensington or Reading. 50% of members does not equate to 50% of points or flights.

        • If 50% of members now come from the regions then why did they screw us on short haul connection redemptions….

  4. The way the info on the A350 is worded makes me think they’ll have identical cabin layouts across brands. Could this be as far as identical seats, inc a brand new Club World?!

    • And did you spot (as a friend pointed out to me) that they plan a “densification” not only of the 777 (removal of 1st/reduction in CW) but also of the 787?

      See slide 15.

  5. Phillip says:

    Interesting to see that IE’s 757s are staying for the time being!

    • I would expect them to stay until replacement by A321LR aircraft, which are pretty much ideal for EI.

  6. OT on Facebook Avios are advertising 50% off (the Avios needed) to various destinations for next weekend only. Economy only.

    • Yes, this is a new service. They sent me the details yesterday, will run it tomorrow.

      • Simon Schus says:

        A new service? As in we expect it to be a recurring feature?


      • Erico1875 says:

        New service? Do you mean like Accor Happy Mondays?
        Cant wait to find out.
        Avios are starting to get interesting again 🙂

        • More like a flash sale, I think. They are being more proactive about identifying where they can fill empty seats @ short notice, everybody wins.

          Eg if Raffles runs it tomorrow, you’ll see it’s limited destinations, limited dates opportunity, great price.

          But the seats would have been empty without the flash sale.

          Load factor etc plus keeping Avios users happy.

        • This is a new weekly ‘thing’.

        • Then I congratulate the Marketing team, it’s very good marketing.

  7. James67 says:

    A LCC boss to become CEO at BA – how appopriate, a perfect match for their vision and aspirations.
    I wish they would just scrap the 777s altogether; are the 772s not already very old aircraft?

    • In general they are younger than the 747s. The oldest are around 20 years now, but some of the 3 class aircraft are only 7-8 years old from memory.

      Did they say all were being refitted to 3 class? The slide pack isn’t clear. If so, that’s a huge reduction in F capacity and a slightly odd one given the 787-9s being delivered now with an F cabin. Some of the aircraft have only had their New First cabin for 2.5 years.

      • Also odd given that the G-ZZZx aircraft were recently (past 2 years) refitted with New First.

        • I’m thinking it actually just means the 9 RR powered 12F aircraft that have up now operated the longer 4 class 777 routes which may be better covered by 787-9s. That would give BA a fleet of 19 3 class 777s, perhaps with some reconfigured in a 40J layout to be based at Gatwick.

        • …that’s excluding the four (three without the Vegas crash aircraft) 3 class GE 777s based at Gatwick which are already in a 40J layout….

  8. Interested about the configuration of the A350 which BA are working with Airbus to optimise. With other Airlines, passenger comments regarding the A350 are far more complementary than the 787 “Nightmareliner” where operators have opted for the higher density 3-3-3 layout in the economy cabin compared to the original Airbus proposed 2-4-2. Does this A350 optimisation indicate that IAG are going to try to squeeze in extra seats again at the expense of comfort?

  9. 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?

  10. 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.

    • 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.

  11. 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?

  12. 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.

  13. 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!

    • 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…

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

  15. 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.