Friday 30 September 2022, JW Marriott Grosvenor
November 2022, Virtual
21 November 2022, Hilton London Metropole
British Airways’ decision to launch hand baggage only fares at Gatwick is paying off with higher load factors on flights from the airport.
BA started trialling the lower fares for passengers without hold luggage in February on a handful of routes from Gatwick and quickly extended it to all services from the airport within a few weeks.
Willie Walsh, chief executive of BA’s parent company IAG, said the move had helped to improve BA’s performance at Gatwick and resulted in higher load factors.
“I was initially a bit cynical about it as I thought why not just say that you are charging for bags,” admitted Walsh during a presentation to financial analysts. “But it has been very successful and very well received in the market.
“It has made BA much more competitive in terms of pricing and we have seen an almost double digit improvement in seat factor.”
BA increased its operating profit during the first half of 2013 to €175 million from last year’s profit of €13 million, according to results released today (August 2).
The airline is planning to increase capacity by 5.7 per cent in the final three months of 2013 compared to the same quarter last year. Around 1.7 per cent of this increase will come from the introduction of BA’s first A380 superjumbos on routes from Heathrow to Los Angeles and Hong Kong.
Walsh added that he did not expect the proposed transatlantic joint business between Virgin Atlantic and Delta to threaten BA’s own tie-up with American Airlines.
“I’m pleased with it because it’s very clear that the dominating force in that relationship will be Richard Anderson, the CEO of Delta,” said Walsh.
“He is very focused on return on capital and very rational. He knows that BA is never going to leave Heathrow and will not try to force us out of Heathrow.”
Walsh said he expected that the new Delta-Virgin operation would have a “neutral” impact on BA’s transatlantic business.
“We are not concerned about it,” he added. “If it had been somebody else coming in, I may be saying something different. But Richard Anderson and Delta are extremely rational. On balance I think it’s a neutral development.”
Walsh said that BA may benefit from getting access to the US Airways hubs of Philadelphia, Charlotte and Phoenix, once US Airways’ merger with American Airlines is completed later this year.
BA also said the former Bmi mainline operations which it took over last year had broken even for the first time in the second quarter of this year, compared to a €50 million loss in 2012.
BA chief executive Keith Williams said that it had cancelled half of Bmi’s former flights and used the slots at Heathrow to introduce services to Zagreb, Leeds Bradford and Rotterdam.
“We will grow the long-haul network and see some of these Bmi slots going to long-haul,” he added.