IAG (the parent company of British Airways) held its annual investor update on Tuesday, where it sets out its plans and priorities for the future. There were a few interesting nuggets during it. I would concentrate mainly on BA during this article.
In the overall aims for the group, investing in IT was mentioned, which is good as BA’s IT is absolutely shocking most of the time. The money they must lose by people giving up on bookings or people not booking direct must be substantial. Growing IAG Loyalty was also a top priority. We can see this already with the new initiative, such as earning tier points through the BA Premium Plus Amex that was announced yesterday.
In this post:
BA Seats and fleet
However, during the 2023 Capital Markets Day of IAG, the airline has stated that all Heathrow based long haul aircraft will feature Club Suites by the end of 2026, including the A380s, which they recently announced will be refurbished with a new First class as well. They have currently completed 60%; this will rise to 75% by the end of 2024 and 100% by the end of 2026. The A380 refurbishment program will start in late 2025.
Premium capacity is not expected to get back to 2019 levels until 2025 due to the high J configuration aircraft being retired. This would explain why business class is so expensive currently, as well as the general lack of capacity in the system and the increase in demand for premium cabins.
No mention was made of when they will complete the B777 fleet, which should have been completed by the end of 2022.
Routes
For those hoping for a return to Asia, it does not sound promising. IAG revealed that the majority of BA’s top earning destinations are within the US, and they plan to concentrate on that country still. The only mention of Asia was in reference to the joint partnerships with China Southern and Qatar in Asia. There were no destinations mentioned in the growth slide.
They expect to grow their Gatwick operation next year above the 19 aircraft they currently have, and Aer Lingus also expect to expand at Manchester.
Customer experience
Luis Gasllego, IAG’s CEO announced that there would be considerable investment in British Airways, in particular IT and customer experience. c.€2.5bn will be invested in customer experience over the next three years.
The business has become more leisure-focused, with 75% of BA’s market being leisure travellers. They plan to continue to be the market leader in London. They want to improve customer satisfaction in premium cabins through staff engagement and a large improvement in punctuality (which is very poor currently, as anyone who flies a lot with BA will testify to). They admitted that over two-thirds of the cause of delays is down to BA, not external influences.
Full-scale refurbishment of Heathrow lounges is mentioned. It’s an interesting choice of words as currently, some have had a change of furniture, but areas like the toilets have not had more than a light refresh with some new handles etc.
IT improvements
BA is making its biggest investment ever in its app and website. The new ba.com website should roll out next year, but the app will relaunch in 2025. This will enable customers to manage everything online, which is good news. They plan to have a leading IT system when it is all complete. IT resilience is also key, with half the desks at Heathrow can still work if the system is down.
Avios
IAG Loyalty has a revenue of £1 billion and is increasing profits by 10% per year. Their profit is up by 65% versus 2019. The theory is that it will attract more customers to the brand with non-flying earning opportunities. 60% of collection of Avios is now through non-flying methods (and will probably increase its share thanks to the new, less generous earning on flights with BA/Iberia).
It was interesting that the Avios-only flights have not sold out completely with 25% of the seats still available.
The company plans to implement a single virtual Avios balance across all its airlines, which you will be able to see in your account. Qatar already shows your joint BA/Qatar balance.
More improvements and changes:
- Consistent recognition of status across all the brands
- Consistent tiers across the airlines – no further detail was given, but this is a slightly alarming one given things such as the Gold Upgrade vouchers, which are unique to BA
- In 2024, there will be an improvement in pay with Avios, where you can discount the ticket down to £1 on most commercial fares
- Iberia will introduce Reward Flight Saver
- They plan to launch more opportunities to redeem for hotels and car hire in conjunction with BA Holidays
14 comments
I personally would be very surprised if they introduced a new website rather I think they will just make a lot of changes to the current one . I personally have had very few issues with the website and find it easy to navigate but the app I agree does need some improvement . It will be good to have the option to manage some more things online such as avios tickets without always need to call the contact centers though I imagine some things will remain this way for certain reasons . I am also interested to see what comes of the lounge refurbishment at LHR especially . The change to club check in has already happened I believe . The consistent teirs does slightly confuse me unless they just plan to change it so that benefits are valued on all airlines ( only BA offers upgrade vouchers). It will be interesting to see what is to come but I would not expect anything mega to change with the it for some time just making a range of much needed improvements which have been a long time coming especially for the app. Thank you for sharing Michelle
Make double tier points on BA holiday’s available to ALL customers. Some of us don’t live in the UK! Dedicated Gold line in North American would be nice.
Double TP holidays are already available ex-US.
Uber seem to manage the payment process without these problems
They need to beef up the security of the Avios website, having just had 50,100 Airmiles stolen and converted to Nectar points so the thief can realise the £250!
The consistent tiers does slightly confuse me as well given that I fly most of my trips on Qatar Airways, their Silver status isn’t equivalent to BA Silver, should it be?
Maybe they should focus on North America as they used to fly everywhere there – but Bangkok is a top destination and I am surprised they still don’t fly there yet. Also my flight to Miami was cancelled yesterday and I realised BA has only 1 flight a day there – and Miami without a doubt is a top US destination. It is very annoying as I booked the flight just month ago ( for April flight ) and wanted to try new first class ( 787-1 ).
I guess BA should improve service which dropped dramatically. Recently I flew in CW twice and I saw crew member twice during 12 hrs flight – when they served meals. Food is still poor – regarding boring selection ( beef-chicken or fish-pasta ),quality etc. It is a lot to improve I am afraid especially that prices are still high or very high.
As a BA employee, it makes me sad reading this as I’m aware of the big inconsistency in service. Please, please report it if you feel something is substandard – though I accept it’s one more nauseating thing to do on top of an already bad flight
Hi Dan. I do now complain when I have had a bad flight.
Not looking forward to RFS coming to Iberia. They already have very attractive redemption rates with low taxes. I don’t want those rates to go up.
Club suite completed by 2026 or by the end of 2026 (i.e. 2027)?
It has been confirmed as the end of 2026 as there was some confusion as they stated something different in the meeting.
“Consistent recognition of status across all the brands”
I would be extremely glad if my BA status was properly recognised by Aer Lingus but I won’t hold my breath.
It’s strange timing for IAG to make that statement. Head for Points did an article on 20th November stating that BA Gold and Silver members will no longer be able to access the lounge in Cork or Shannon when travelling with Aer Lingus to Heathrow or Gatwick. That’s a step in the wrong direction and contradicts what was said in the IAG investor update.
Also, it would be great if ALL Aer Lingus flights/bookings could earn Avios and Tier Points in a BAEC account. The current situation is extremely frustrating – if you book through Aer Lingus and provide your BAEC details, you are likely to get zero Avios and TPs. I know Aer Lingus are not in OneWorld but BA and Aer Lingus are both owned by IAG and have extensive code share agreement – the loyalty schemes need to be better inter-linked. All Aer Lingus flights/bookings should be eligible for BAEC Avios and TPs.
Where have we heard “Biggest investment in IT ever and total overhaul of the website” before? This was promised after the BA-Amex breach. It was “coming in the next year” since and sung about many times before. I’d hold my breath but would likely expire long before anything actually happened.
@jack You may think the website is ok but I’d invite you to view the site on two devices at once ( tbh being logged in rarely matters). Then view 2 identical itineraries and see what happens. If you really wanna see how bad it is then look at a holiday with everything like-for-like. I’ve had trips price up with 4 figure differences more often than them match. So much so that SOP in our house is to both search sat across from each other and book on whichever device comes in, hundreds or more, less.
Is that the case every time, no. Is it more common than not. Years and hundreds of booking searches indicate so.
@michelle merry double TPs on BAH bookings for north America based members has been online for some time now. That said, and whilst we all know people move etc, technically speaking a UK address is a base requirement for BAEC membership so it’s for sure a luxury being granted. None of us care and are happy to see you getting the chance of course but it’s a bonus.
If you’re not seeing it being offered then maybe VPN to a UK IP if calling CS fills you with dread ( a reasonable thing tbf lol)
The website works absolutely fine and I have not had any issues with it beyond it sometimes crashing and needing to be reloaded which I have also had on other websites . I have also used it on 2 devices and have just made a booking now and went through in around 30 seconds. Some work has definitely happened to the website as a lot of the options look new especially on the account pages . I also have not encountered any issues booking with BA holidays at all so it seems like you may have just had some bad experiences. All websites have the odd glitch . I also would not need to login on another device and I doubt many would as I would book on my primary device but when I have used 2 devices I have seen my bookings every time alike
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