British Airways’ parent company, International Airlines Group, is seeing some long-haul booking spikes accompanying announcements of possible easing of the UK federal lockdown, according to the Carrier Group, which offers a silver lining to pent-up demand for business travel after a difficult fourth quarter in 2020.
IAG, also the parent company of Iberia, Aer Lingus and Vueling, reported on Friday a decline in passenger revenue in the fourth quarter of more than 87 percent year-on-year to 684 million euros. The company lost more than 1.6 billion euros in the pre-tax quarter. Still, IAG CEO Luis Gallego pointed to recent booking trends as a sign that there is pent-up demand, particularly for vacation travel, but also for some business travel, including long-haul travel.
Gallego cited increased booking activity after UK Prime Minister Boris Johnson announced one on Feb.22 Government review of procedures for resuming international travel.
“Bookings with BA have increased since the Prime Minister announced the UK government’s lockdown exit plans on February 22nd,” Gallego said on Friday during the airline’s quarterly earnings call. “On the day itself, bookings only rose by over 60 percent for flights and for BA holidays by 200 percent compared to the same period a week ago. On February 23 there was an even higher booking rate. For example for BA holidays in Compared to the previous week up by 560 percent. Booking activity was also strong for the rest of the week. “
While pent-up demand for business travel may not be quite as dramatic, Gallego still expects it to spike as lockdowns ease and vaccine numbers proliferate. However, reaching demand before the pandemic remains a multi-year process.
“When traveling for work, I think that first different companies and individuals have to accept the risk of travel during the pandemic,” he said. “But we believe that with these quarantines removed, a lot of customers will be ready to travel – and we know it’s not the same, and we’ve learned how to do business with Teams or Zooms this year.”[but] There are many activities that require face-to-face meetings. “
Still, Gallego said of the business travel volume: “As we’ve always said, we assume that we can return to 2019 levels in 2023, 2024.”
The passenger capacity of IAG was 26.6 percent in the fourth quarter, which corresponds to a decrease of 73.4 percent compared to the previous year. For the full year 2020, the passenger capacity was 33.5 percent, a decrease of 66.5 percent compared to 2019. The IAG’s passenger turnover for the full year was 5.51 billion euros, a decrease of 75.5 percent compared to the previous year, The airline’s annual operating loss in 2020 was almost 7.43 billion euros. compared to a profit of 2.61 billion euros in 2019.
Embleton named Aer Lingus CEO
IAG also named IAG Cargo Chairman and Chief Executive Lynne Embleton as CEO of Aer Lingus. Embleton, who also worked for British Airways, replaces Donal Moriarty, who has served as interim CEO since former CEO Sean Doyle was appointed BA CEO in October. Moriarty will return to his previous position as Aer Lingus’ chief corporate affairs officer, according to IAG.
