IAG 1st Quarter Results – Analysts Q&A Session

London Air Travel » Page 148

British Airways / Iberia Logos
British Airways / Iberia Logos (Image Credit: British Airways / Iberia)

As previously mentioned, International Airlines Group published its 1st quarter results in Friday.

On the morning of the announcement, as per standard protocol, it held a webcast for analyst and the question and answer session that follows provides a lot of useful insight into current strategic developments at the airline group.

Here is a summary of some points of interest from the call:

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IAG publishes its 1st Quarter financial results

London Air Travel » Page 148

British Airways / Iberia Logos
British Airways / Iberia Logos (Image Credit: British Airways / Iberia)

International Airlines Group (IAG) has just published its financial results for the first quarter of the year.

Once again, the results are a tale of two airlines with a stark divergence in the performance of British Airways and Iberia. IAG made an overall operating loss of €278 million. However, IAG had to also take another exceptional charge of €311 million in connection with the restructuring of Iberia. This is in addition to the exceptional charges and provisions IAG took at the end of 2012. The overall loss after tax for the quarter was €630 million.

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Vueling demonstrates its value to IAG with a strong set of 1st Quarter results

London Air Travel » Page 148

Vueling Airbus A320 (Image Credit: Vueling)

Although Vueling is now majority owned by International Airlines Group (“IAG”), the airline remains a listed entity and it has today published its results for the 1st quarter of 2013.

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BA launches London Gatwick – Larnaca

London Air Travel » Page 148

British Airways Logo (Image Credit: British Airways)
British Airways Logo (Image Credit: British Airways)

British Airways has announced it is to launch a new, thrice weekly, route from London Gatwick to Larnaca.

The route launches on 30 June 2013 and will operate in addition to BA’s daily service from London Heathrow.

The flight operates on Sunday, Monday and Thursday. As is common for Garwick the flight operates at different times on each operating day.

Flight BA2674 departs at 08:35 on Monday (returning from Larnaca at 16:10), 14:40 on Thursday (returning at 22:05) and 09:25 on Sunday (returning at 17:00). The flight will be operated with a Boeing 737 aircraft.

Flights are on sale now at ba.com

From a network development point of view there are a couple of interesting points to note.

First this is another new London Gatwick route which, like Barcelona and Las Vegas, operates in parallel to Heathrow. In recent times London Gatwick and Heathrow have tended to maintain broadly distinct networks but the latest Gatwick routes are a reversal of this trend. Heathrow has also moved into Gatwick’s leisure territory with seasonal routes to Palma de Mallorca, Ibiza and Gran Canaria.

Secondly, this is a relatively long range route which indicates where BA sees growth in the difficult short haul market at Gatwick.

Changes to BA London Gatwick short-haul timetable for Winter 2013

London Air Travel » Page 148

British Airways Logo (Image Credit: British Airways)
British Airways Logo (Image Credit: British Airways)

British Airways has confirmed changes to its London Gatwick short-haul timetable for the Winter 2013 season, which starts at the end of October.

The changes announced for so far are relatively minor, but in the context of perennial uncertainty over the future of BA’s London Gatwick short-haul operation, that is no bad thing.

Flights to Salzburg increase from 7 to 8 a week, with an additional flight on Tuesday.

Flights to Paphos continue twice weekly on Mondays and Fridays until 29 November 2013. Flights currently operate four weekly in the summer season.

Flights to Marrakech increase from 7 to 10 weekly, with additional flights on Monday, Wednesday and Saturday. Note that each additional flight has a different departure and arrival time. Flight BA 2668 departs London Gatwick at 11:35 on Monday (returning 15:50), 06:45 on Wednesday (returning 11:00), and 06:55 on Saturday (returning 11:10).

BA confirms changes to Heathrow short-haul timetable for Winter 2013

London Air Travel » Page 148

London Heathrow Terminal 5 (Image Credit: British Airways)
London Heathrow Terminal 5 (Image Credit: British Airways)

British Airways has confirmed changes to its London Heathrow short-haul timetable for the Winter 2013 season, which starts at the end of October.

The changes are relatively modest and mainly concern small increases and decreases in frequencies on certain routes.

Frequency Increases

– Agadir increases from two flights a week to three.

– Basel increases from 21 to 26 flights a week.

– Amsterdam, Athens, Hamburg and Nice also benefit from small increases of 1-2 flights a week.

Frequency Decreases

– Flights to Manchester reduce from 72 to 68 a week.

– Prague also reduces by five flights from 33 to 28 flights a week.

– Aberdeen, Barcelona, Budapest, Dusseldorf, Edinburgh, Frankfurt, Paris Charles de Gualle, Rome, Stockholm and Zurich also reduce by 1-3 flights a week.

The daily flight to Larnaca also reverts back from a night-time departure to a day-time departure from London Heathrow, with the flight from Heathrow leaving at 12:05 and returning to Heathrow at 19:40.

There are also timetable changes to Rotterdam with BA’s three daily flights moved to earlier times. There are also relatively modest changes to timings for BA’s twice daily flights to Bergen and Stavanger.

Summer Seasonal Flights

BA’s weekly summer Saturday flights from London Heathrow to Ibiza and Palma de Mallorca also finish on Saturday 26 October 2013. The airline will continue to fly all year round to Ibiza and Palma de Mallorca from London City airport.

Delta purchases of two Heathrow slot pairs for $47m

London Air Travel » Page 148

Virgin Atlantic & Delta Air Lines Aircraft (Image Credit: Delta Air Lines)

Delta continues its focus on growing its presence at London Heathrow having today, 23 April 2013, announced that it has purchased two pairs of take off and landing slots at Heathrow for $47m.

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International Airlines Group gains control of Vueling

London Air Travel » Page 148

Vueling Airbus A320 (Image Credit: Vueling)

International Airlines Group (“IAG”) confirmed today that its offer to acquire the 54% of Vueling’s shares that it does not already own has been accepted by the majority of Vueling’s shareholders. 

This means that IAG will control just under 91% of Vueling, effectively giving it control of the airline.  Vueling will officially become part of IAG from Friday 26 April 2013.

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What does International Airlines Group have planned for Vueling?

London Air Travel » Page 148

Vueling Airbus A320 (Image Credit: Vueling)

The offer by International Airlines Group (“IAG”) to acquire the 54% of Vueling’s shares that it does not already own expired on Friday 19 April 2013.

The airline group initially made an offer priced at €7.00 per share which Vueling management chose not to recommend. IAG subsequently increased its offer to €9.25 per share. However, the minimum acceptance level was reduced to just 4.16% of Vueling’s capital to leave IAG with at least overall control of Vueling, if not 100% ownership.

Assuming the transaction completes this will be the second airline acquired by IAG since its formation in 2011 and the third member airline of the group (the first acquisition, bmi, being subsumed into British Airways).

Why is IAG so interested in Vueling and what does it have planned?

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IAG orders 18 Airbus A350-1000 aircraft for BA

London Air Travel » Page 148

British Airways Logo
British Airways Logo (Image Credit: British Airways)

International Airlines Group has just announced that it has ordered 18 Airbus A350-1000 aircraft for British Airways for delivery between 2017 and 2023 and has secured a further 18 options.

The group has also secured delivery slots for Iberia, in anticipation of a future order for Iberia, subject to a satisfactory restructuring of the airline.

This follows the recent exercise of 18 Boeing 787 options for BA and acquisition of 787 delivery slots for Iberia and both airlines are moving towards a common long-haul fleet.

Whilst this is not the first long-haul order for Airbus by either BA or IAG, for Airbus this is still a significant long-haul order by BA as the A350-1000 aircraft is likely to form a major part of BA’s long haul fleet as a replacement for the Boeing 747-400.