Profits Up
Oct 31, 2014, 8:47 am
#16
Join Date: Jan 2009
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Oct 31, 2014, 9:26 am
#17
Join Date: Jun 2008
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Oct 31, 2014, 9:29 am
#18
Suspended
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Not really the fault of the airline then, these issues should be taken up with the passengers employer not BA. Perhaps they should strike over poor working conditions?
Oct 31, 2014, 12:01 pm
#20
Join Date: May 2014
Posts: 7,237
Plus, if you look the revenues per RPK you'll see that it has barely moved at all. That means they managed to keep on selling 10% or so more seat at pretty much the same prices. That means that they didn't have to discount them too much and that these are all new customers. That takes some skill, especially in such an economic environment.
Besides, have you seen the leased adjusted margin in the .ppt available on IAG's website? It shows that Iberia's margin is practically equal to BA's, an improvement of over 7 points in a year. BA deserves a bravo, Iberia a 90-minutes long round of applause for that, especially because it's come the hard way, via massive layoffs and cuts.
Oct 31, 2014, 12:22 pm
#21
Join Date: Jun 2008
Programs: TK*G (E+), IHG Plat Ambassador
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I hope it will also be noted by all these folks who not long ago were moaning on this forum how terrible move the BA/IB merger was...
Oct 31, 2014, 1:05 pm
#22
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Join Date: Mar 2013
Location: London
Posts: 17,007
Sure, profits are up (and there are even rumours of a dividend) but that's driven by having more seats, not by increasing revenue per passenger, so I would suggest it's a bit of a stretch to say "the focus on customer service is paying off";
So, more enhancements ahead???
- Available Seat Kilometres [ASK] +10.5%
- Revenue Passenger Kilometres [RPK] +9.5%
- Seat Factor -0.7pts
- Passenger revenue per ASK -1.1%
- Passenger revenue per RPK -0.2%
So, more enhancements ahead???
). First, increasing capacity does not automatically lead to a proportional growth in demand, particularly I would suspect in the short term. Though the increase in ASKs is rather substantial, it actually appears that IAG have grown their capacity rather cautiously, taking advantage of increased demand rather than hoping demand will materialize later. Second, one only needs to look at their rivals, AF-KLM and the LH group, who have a whole host of problems, not least the threat of debilitating strikes hanging over them, to think that IAG is in good hands.
Oct 31, 2014, 1:17 pm
#24
Join Date: Jul 2011
Programs: BAEC Gold, LH M&M Member
Posts: 2,705
Well, by a whopping 1.1% at revenue per ASK versus a 10% increase in ASK as per the post you originally quoted. That's really small, especially if one compares it to the likes of Turkish Airlines.
Plus, if you look the revenues per RPK you'll see that it has barely moved at all. That means they managed to keep on selling 10% or so more seat at pretty much the same prices. That means that they didn't have to discount them too much and that these are all new customers. That takes some skill, especially in such an economic environment.
Plus, if you look the revenues per RPK you'll see that it has barely moved at all. That means they managed to keep on selling 10% or so more seat at pretty much the same prices. That means that they didn't have to discount them too much and that these are all new customers. That takes some skill, especially in such an economic environment.
I think you've taken a pessimistic view. Let me give my comments (untainted by either experience or knowledge ). First, increasing capacity does not automatically lead to a proportional growth in demand, particularly I would suspect in the short term. Though the increase in ASKs is rather substantial, it actually appears that IAG have grown their capacity rather cautiously, taking advantage of increased demand rather than hoping demand will materialize later.
). First, increasing capacity does not automatically lead to a proportional growth in demand, particularly I would suspect in the short term. Though the increase in ASKs is rather substantial, it actually appears that IAG have grown their capacity rather cautiously, taking advantage of increased demand rather than hoping demand will materialize later.So it's maybe not so much due to the "tight rein on the purse strings and focus on customer service" as was mentioned earlier.
Oct 31, 2014, 1:32 pm
#25
Join Date: Apr 2003
Location: Seattle, Wash. USA
Posts: 1,531
If BA bought fuel on the spot market, they might drop the surcharge. But about 80% of their fuel costs are currently hedged/contracted at a price higher than the spot price -- no one anticipated the steep drop in crude prices over the last few months.
Oct 31, 2014, 1:54 pm
#26
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Oct 31, 2014, 2:27 pm
#27
Join Date: Jul 2011
Programs: BAEC Gold, LH M&M Member
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Rod Eddington
a lot is said about hedging strategy, most of it is well wide of the mark. I don't think any sensible airline believes that by hedging it saves on its fuel bills. You just flatten out the bumps and remove the spikes. [...] When you hedge all you do is bet against the experts of the oil market and pay the middle man, so you can't save yourself any money long term. You can run from high fuel prices briefly through hedging but you can't run for very long.
Oct 31, 2014, 2:37 pm
#30
Join Date: May 2014
Posts: 7,237
Don't get me wrong, I wasn't saying the ASK/RPK figures were terrible, but I was suggesting the increased revenue was more-or-less directly in line with increased capacity.
So it's maybe not so much due to the "tight rein on the purse strings and focus on customer service" as was mentioned earlier.
So it's maybe not so much due to the "tight rein on the purse strings and focus on customer service" as was mentioned earlier.
My question is, though: how long will these results last? We all know LHR is full and no runways will be built, no matter what Davies says. How long before the Germans or the French or the Dutch get their house in order and start nicking BA's passengers, thanks as well to the new wave of xenophobia that's spreading across the UK?