This is how the new British Airways low cost subsidiary at Gatwick will work

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• ThePenguin says:

  4 Sep4 September 06:28

  I wonder what happened to that guy who used to post about his investment in IAG shares?
  Seem to remember he was doing rather well.

  • Rhys says:

    4 Sep4 September 07:25

    I have some. Underperforming recently (good time to buy!) but confident they will come back in the next 2-5 years.

    • Brighton Belle says:

      4 Sep4 September 07:56

      A business that uses machines that emit large quantities of CO2 is in trouble. They’ll need sustainable aviation fuels soon and that’s not low cost.

      • Rhys says:

        4 Sep4 September 08:05

        The stock doesn’t need to rise much for me to make a profit. But it’s also just a little side bet. Most of my investments are in passive.

        • Brighton Belle says:

          4 Sep4 September 08:13

          I’ve had some BA shares since shareholders got flight discounts. It’s been a dreadful investment so I keep them for nostalgia. But I’d make more cash with a begging bowl on Brighton seafront. I’m not selling them though.😵‍💫

      • Andrew says:

        4 Sep4 September 10:33

        Find a business that doesn’t emit large quantities of CO2.

        If you were truly worried, you wouldn’t be connected to the internet or have a mobile phone. Data centres and crypto mines are massive emitters.

        • Nick says:

          4 Sep4 September 11:16

          Data centres can be powered by renewables. Aircraft engines can’t.

    • GenX says:

      4 Sep4 September 12:41

      Re IAG shares. Lots of debt, lost earnings, no growth, dividends stopped, which is a taboo in itself. £1.56 a share is attractive, however P/B is high and D/E is just shocking. It does have a bit of cash though. I’m sitting on a fence whether it’s an investment for me. Who knows, the company may pick up again from 2023. I hope so.

    • Ken says:

      4 Sep4 September 16:33

      Underperforming recently or underperforming for the last 30 years ?
      Will profitable PE recover?
      I would say yes, aging, fatter, richer leisure travellers happy to pay more for a bit of comfort.
      Will J recover to pre-pandemic levels?
      I doubt it. Blended office working, a desire to cut travel budgets, a desire to show ‘sustainable’ credentials all suggest it won’t.
      Even if it did, the competition is still there, BA still utterly reliant on monopoly of Heathrow slots.

      I think BA/IAG will prove just as bad an investment over the next 3 decades as the last 3 decades.

      • GenX says:

        5 Sep5 September 00:27

        Thanks Ken, some good points there. BA (IAG) probably won’t go kaput but that’s all there is to it.

  • TGLoyalty says:

    4 Sep4 September 10:38

    If you bought around the time of the share issue you’re sitting on a 80% profit right now.

    I think that commentator is still extremely happy

• KBuffett says:

  4 Sep4 September 07:33

  Seems like an exercise to shaft BA’s Gatwick Staff. Everything else remains the same.

  • Rhys says:

    4 Sep4 September 08:02

    BA told us Gatwick wasn’t even profitable during the 2019 peak summer season.

    • Jonathan says:

      4 Sep4 September 08:20

      I can easily believe this. Flying BA from LGW was often substantially cheaper than Ryanair/Easy/Jet2 from MAN/LPL/LBA etc pre Covid. Considering a decent proportion of the passengers will also have had status then it’s not surprising the margins were negative.

      In such a competitive environment if you know you can never really match rivals costbase in a market that is fundamentally price driven then you may as well give up. If people want CE & a lounge they can get themselves to LHR.

      • swifty says:

        4 Sep4 September 16:55

        because of the airport tax to Heathrow do you think? I was happy as from Brighton like belle, and dislike the drive to Heathrow. Always ended up shelling out for an overnight hotel plus a pizza for the teens

    • Memesweeper says:

      4 Sep4 September 09:06

      Why on earth are they returning with the same model then? Trimming a few staff costs won’t change the fundamentals. As a shareholder Rhys you should be up in arms… they’re burning your cash!

    • Dubious says:

      4 Sep4 September 09:20

      I was once lead to believe that BA see their Gatwick operation as a place for business travellers who are used to using Heathrow to come when they want to take a leisure break with their status benefits and points redemptions…
      ..i.e. even if the Gatwick operation makes a paper loss, overall it might be driving some business to BA at Heathrow (away from other airlines at Heathrow).

    • Rob says:

      4 Sep4 September 10:26

      You can define ‘profitable’ 100 different ways. This is why you get film stars sueing studios who claim Star Wars etc were not profitable so the profit share is not due.

      • KBuffett says:

        4 Sep4 September 12:55

        My accountant always says ‘Accounting is an art’

  • Briand says:

    4 Sep4 September 08:32

    Here we go again…..

  • ChrisW says:

    4 Sep4 September 09:37

    Aren’t all cabin crew on the single cheaper contract now thoigh? Are they planning to pay them even less?

    Is this whole operation just to pay a few hundred pilots a bit less money?

    • Rob says:

      4 Sep4 September 10:18

      Seems so.

      • Tim says:

        4 Sep4 September 10:52

        For now… before they find a way to move it to short haul LHR and then to long haul somehow. This will drive a massive wedge between old and new pilots. It’s essentially fire and re-hire.

        • Journeying John says:

          4 Sep4 September 17:31

          Fir and rehire… As BA have done to their entire workforce except pilots and executive management…
          … the select committee put it best “a national disgrace” despite the fact that in reality BA is the UK division of a Spanish multinational, focussed only on profits and dividend. Customers & staff come last.

    • Journeyingjohn@gmail.com says:

      4 Sep4 September 16:31

      Given the “regular” BA Mid and Short haul planes already; charge for luggage and seat choice, have been densified to greater extent than eg Ryanair and that BA deliver aess responsive customer services and a far less reliable set of IT systems, it’s difficult to see how a new venture would compete in the low cost space without drawing business from other BA flights. Admittedly BAs fares are almost double what equivalent carriers offer but I’m fairly sure that the poor value of BA flights & reality of 2021 service means that this too will fail.

• Rui N. says:

  4 Sep4 September 07:39

  Can the slots at Gatwick be sold?

  • ChrisC says:

    4 Sep4 September 07:58

    Yes. But probably not the best time to do it to get the best price.

    There are other slots floating about that would be available for free from the pool (ex VS for example) so an airline wanting to start or expand at LGW might try for those first.

  • Rob says:

    4 Sep4 September 10:27

    Yes.

• Kishan Majithia says:

  4 Sep4 September 07:57

  How do you think this will impact the 2022 summer schedule at Gatwick. For example, the flights to Kos during May half term are completely sold out. Will the schedule change and/or additional services added as a result?

  • Rob says:

    4 Sep4 September 10:27

    16 aircraft is a fraction of what BA used to operate so who knows?

• Simonbr says:

  4 Sep4 September 08:15

  Is this why my flight to Turin from LHR next March returns a few days later to LGW rather than LHR? Or is it a mistake?

  • Richie says:

    4 Sep4 September 08:37

    The summer timetable starts 27 March 22 when Gatwick SH is planned to re-start.

• Tom says:

  4 Sep4 September 08:29

  This doesn’t sound like good news! I was hoping for all of the LGW flights would transfer across to LHR because I’m looking to book a flight to TFS which is out from LHR and back to LGW.. was hoping the latter might move! Sounds like they might be keeping the schedule after all?

  • Rob says:

    4 Sep4 September 10:24

    It will, legally, be a different airline so any move would let you cancel for free.

• Briand says:

  4 Sep4 September 08:34

  @KBuffet

• ChrisW says:

  4 Sep4 September 09:35

  I never thought BA were trying to compete on price with EasyJet at Gatwick. Their cost base will always be too high.

  I thought the whole point was there was enough passengers who would pick BA even if it was more expensive than EasyJet for leisure routes because they wanted a full-service experience, had status, wanted to earn Avios etc. The well-heeled who want a comfortable start to their ski trip or Greek island holiday.

  I.e. I thought BA and EasyJet were going after completely different customer segments.

  • C says:

    4 Sep4 September 10:06

    Not completely different, but differentiated.

    But with business travel down, the appeal of status as a marketing lever may be declining. For many years I have picked BA for leisure travel even with a small price differential, because of status benefits. But I have 0 TP business travel forecast for the foreseeable future (instead of Silver or Gold continuously for the past 15 years), and I’m sure I’m not the only one who will be reassessing strategies and brand preferences over the next few months.

    • ChrisW says:

      4 Sep4 September 10:53

      That’s a good point. There’s likely to be a lot less BA elite status holders next year because people won’t be earning status through business travel.

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