A summary of BA news at IAG’s 2016 Capital Markets Day

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International Airlines Group - Aer Lingus, BA, Iberia, Vueling
International Airlines Group – Aer Lingus, BA, Iberia, Vueling

International Airlines Group, the parent company of British Airways, Iberia, Aer Lingus, and Vueling, held its annual Capital Markets Day on Friday 4 November 2016.

Whilst the event is very much aimed at investors with industrial quantities of Powerpoint, there are number of announcements of interests to passengers. You can view the full side deck here.

Here is quick race through some of the announcements and general themes of the day, and some things that were not announced:

1. BA is to introduce business class on UK domestic routes

More details here.

This is no doubt driven by the decision to introduce Buy on Board catering on all short-haul flights and ensures connecting first and business passengers to/from long-haul flights receive complimentary catering.

2. BA is to increase the number of seats in World Traveller economy on some Boeing 777 aircraft from 9 to 10 seats a row.

More details here.

This is a clearly a competitive response to the growth of Norwegian at Gatwick. Whilst initially only 25 Boeing 777s will be converted to 10 seats a row, you can expect the financial impact & customer response to be monitored very carefully.

This is also likely to coincide the removal of First Class from a number of Boeing 777 aircraft (and, by extension, routes).

The theme of, to use IAG lexicon, “densification” continues with yet more seats being added to short-haul aircraft which will put pressure on leg room and space for cabin baggage.

3. BA is investing in its long haul Club World business class

More details here.

This is clearly a response to the fact that its 2-4-2 “ying yang” seating arrangement is no longer competitive against many other airlines, but don’t expect anything too radical.

4. BA is upgrading ground facilities at London Heathrow, Gatwick and Boston airports.

As previously reported, BA is to open a direct security channel from check-in to lounge for first class passengers and Gold Executive Club cardholders at London Heathrow Terminal 5.

There will be new premium check-in and lounges when BA moves to the South Terminal at London Gatwick in January 2017 and the Boston lounge facilities will also be upgraded.

Interestingly, there was no mention of any lounge/check-in investments at San Francisco nor New York JFK airports.

5. IAG will be rolling out WiFi across the long and short-haul fleets of all its airlines in 2017

IAG will be adding WiFi to both short and long-haul aircraft from 2017. Digital is a major area of investment by IAG so it will be interesting to see what new initiatives this prompts.

6. More passenger self-service and automation is coming to London Heathrow

This will include automated boarding gates and passenger operated bag drop facilities.

7. BA will continue to operate the Boeing 747-400 until 2024

BA is prolonging the life of its Boeing 747 by deferring the retirement of four aircraft until 2024. This will please fans of the Boeing 747. BA has also previously announced that is extending the life of its Boeing 777 fleet to 30 years.

8. Royal Air Maroc, Aer Lingus and Vueling will shortly adopt the “Avios” frequent flyer currency

IAG has signed a Memorandum of Understanding with Royal Air Maroc which should eventually adopt the Avios frequent flyer currency which means that members of the British Airways Executive Club and Iberia Plus frequent flyer programmes should be able to earn and redeem miles with Royal Air Maroc.

Aer Lingus is expected to relaunch its frequent flyer programme which will use the Avios frequent flyer currency by the end of the year. Vueling is expected to adopt the Avios currency in its frequent flyer programme in 2017.

The overall theme of the day was one of very cautious and targeted investment. There were no new aircraft orders. And the theme of presentations by other IAG airlines was largely a consolidation of recent route network expansions and continued operational efficiency.

3 thoughts on “A summary of BA news at IAG’s 2016 Capital Markets Day”

  1. I’m not particularly pleased to hear about the densification of the 777. I hope they don’t decide to do it on their CHI/LHR route.

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