One of Europe’s largest aviation groups, IAG is today holding its annual Capital Markets Day – the event is a great opportunity for the owner of British Airways, Iberia and Spanish low-cost airline Vueling, as well as Aer Lingus and LEVEL to update analysts and shareholders on the state of the business and what plans they have for the year ahead.
After posting some pretty impressive financial results for the first nine months of the year, IAG now says it thinks it might beat its own long-term goals between 2019 – 2013. IAG says its managing to reduce its non-fuel related costs faster and deeper than some of its biggest European rivals such as Lufthansa and the Air France-KLM Group – in part by reducing staff costs far more successfully than its competitors.
So far, so good. Part of IAG’s success seems to be down to it building a portfolio of what it calls complimentary airline brands. For example, British Airways and Iberia are the Group’s premium “full service” airlines, while Aer Lingus and Iberia Express are considered “value” airlines. Meanwhile, Vueling and new long-haul carrier LEVEL are the group’s low-cost brands.
Now IAG wants to further differentiate these brands. It says that its airline brands can’t be all things to all people. They should instead, “focus on resonating strongly with target demand segments” – something which could still be improved says IAG.
Of course, one of the most exciting things about the Capital Markets Day is the opportunity to hear updates on key products – and the most highly anticipated product updates is the replacement of the current British Airways long-haul business class seat – or as BA calls it, Club World.
We already know that the new seat will feature direct aisle access at every seat and will be launched initially on the airline’s Airbus A350 aircraft – the first of which is to be delivered in 2019. But now, IAG has teased us with a little more information:
- A larger seat
- Gate to gate in-flight entertainment
- Increased privacy
- Increased stowage
By the end of 2019, the seat will feature on four A350’s and will also be retrofitted on at least two Boeing 777’s. The rollout will then “accelerate” in 2020, although further details weren’t made available.
Some analysts have gone so far to suggest BA might be about to install the QSuite as its new Club World product – that might be going a little too far.
On top of that, we now know that British Airways plans to change the seating configuration in the Economy cabin on more of its Boeing 777 aircraft – going from 3-3-3 to the less popular but what has turned into the industry standard 10 abreast 3-4-3 configuration. The additional 57 seats have increased profits per flight by 20%.
Premium Economy cabins will also grow in size, with updated seats and in-flight entertainment to make an appearance on more planes. Alex Cruz, the airline’s chief executive, even told investors that a big change might be coming to BA’s FIRST seat – although no further detail was shared.
Other improvements include:
- Short-haul WiFi to be complete by the first three months of 2019
- Over 80% of the long-haul fleet to feature WiFi by end of 2019
- New food, bedding and amenities in First Class from May 2019
- Improved food and drink in lounges
- Unspecified “Euro Traveller” improvements
The Euro Traveller improvements are really interesting – this could just mean power at every seat and WiFi availability or perhaps something bigger. British Airways introduced a buy-on-board concept last year but its parent company now says the airline can’t be all things to all people – could this be a move to make BA a more premium airline brand? We’ll have to wait and see.