British Airways (BA) is the only International Airlines Group (IAG) carrier yet to return to 2019 capacity, according to second quarter financial results. In embarrassing news for UK aviation, BA is not expected to recover by the end of 2023 and is to blame for the group as a whole failing to reach 100% of its pre-pandemic offer.
1. Letting the side down
Every other IAG carrier is predicted to exceed 2019 capacity, reports Simple Flying. Ireland’s Aer Lingus and budget Spanish carrier Level are doing particularly well, with third quarter projections of 103% (Lingus) and 143% (Level) compared to 2019.
Despite other IAG carriers exceeding 2019’s seat offer, the group overall is expecting to be at 97% capacity by the end of the year. BA is letting the side down with only 94% capacity for Q3 and a full year projection at just 91%. The only other airline whose Q3 projection is not equal to or above 2022 is Iberia, at 99%, but it is expected to exceed 100% by year end.
2. London exposure, strikes, corporate travel, supply chain and staffing
IAG described operations as “not where we would want them to be”, attributing some group issues to French Air Traffic Control industrial action. It blamed BA’s comparatively poor performance on its “London exposure at both Heathrow and Gatwick and complex schedule.”
A number of other factors are behind the BA figures. Corporate travel is taking longer to return to ‘normal’. Recruitment and retention and supply chain issues affecting available aircraft numbers are also causing problems.
3. What’s the solution?
In addition to a new call centre in Delhi, the group filled 4000 vacancies during the first half of 2023, focusing on ground staff. In addition, “wet leases”, that’s to say, aircraft leases that include crew, are helping to boost capacity, with four Finnair Airbus A320s, one Air Belgium A330 and three Avion Express A320s at Gatwick, according to Travel Weekly.
With that in mind, the flagship UK carrier is not expected to return to pre-pandemic levels of “non-premium” capacity until 2024. Long-haul capacity will take even longer, not projected to reach 2019 levels until 2025. With corporate and business travel still down on pre Covid-19 levels and lagging behind the leisure travel sector, BA’s premium capacity will not recover until 2026, according to IAG.
4. Profits
When it comes to the bottom line rather than capacity, IAG has had a good first half of 2023, hitting record profits. Operating profit reached €1.26 billion ($1.38 billion), up by more than €1.7 billion on 2022’s losses.
