wb1969

The Daily Telegraph is reporting IAG has asked BA to look in to leaving Gatwick permanently and switching all operations to Heathrow in order to protect its LHR slots.

The story is behind a paywall so I’m a bit wary of pasting the content. Suffice to say the future of BA at Gatwick looks bleak.

Bohinjska Bistrica

Unless air travel picks up soon, which it isn't going to if HMG think that just about no country on earth is safe to visit without some form of quarantine on return, coupled with the refusal to exempt the fully vaccinated from testing requirements, I'm struggling to see how BA can continue to justify use of both airports whilst it loses money.

The Heathrow slots are undoubtedly the more valuable.

skipness1E

Yet LHR is about to get yet more expensive as HAL takes advantage of their position to close the hole in their finances, some form of LGW operation is surely the only leverage BA have got!
I could see consolidating the long haul to LHR but the fleet size of the A320s would be razed if LGW was shuttered. Tough times.

choosethedrew

Here are the relevant parts of the article:

BA raised the spectre of quitting Gatwick more than a year ago in anticipation that demand for air travel will remain depressed for a number of years. Given Heathrow’s popularity, take-off and landing slots are highly sought after and can be traded by airlines for tens of millions of pounds

In normal times, airlines are required to operate 80pc of the maximum possible flights to retain their slots. Failure to comply would result in slots being handed back to a central authority and reallocated to other airlines. Grant Shapps, the Transport Secretary, issued a waiver of such “use it or lose it” rules. If Mr Shapps decides not to extend the waiver until demand returns to pre-pandemic levels, BA may need to focus on airports such as Heathrow where the slots are worth the most so that they do not lose them.

Luis Gallego, chief executive of IAG, told analysts last month: “Gatwick is an important decision that we need to take as a group. It’s true that we have the issue with the slots. Gatwick has some strategic value, but we need to be competitive there. This crisis is going to change the profile ... of the demand. So we are analysing the different options.”

BAeuro

I never thought BA would completely leave Gatwick, but then again I never thought we’d still be pretty much unable to travel in June 2021.

My personal view is that the BA brand is a lot more valuable than Vueling or Level (plus you have a business cabin) and it would be a mistake for BA to ditch all of Gatwick. Travel will rebound and LHR will fill up again, so I am very confident by the end of the decade BA will be operating at Gatwick (whether there’s a pause in the middle I don’t know). I guess the short term benefit of giving slots to Vueling is that BA can get the slots back at the clap of their hands.

In the next few years though, while business travel is down, BA can easily fit Gatwick leisure in the spare slots. If FRA was 7 daily, they could make it 5 daily and boom you have 14 weekly slots spare. That’s enough for all DBV ops for example. Do this on a few business heavy routes and you’re sorted. That won’t work when things recover though.

JerseyPilot

Worth pointing out that this is likely Gallego putting his own stamp on and revisiting ground that would have been covered this time last year under the stewardship of Walsh where (arguably) things were much worse ie no vaccine, no realistic timetable for any improvement. The decision at that time was to retain the presence at Gatwick. If anything the landscape is more positive and certain in the sense that Summer 2022 should be far better (as long as some common sense prevails), in that case I can’t see why Gallego would make a different decision than Walsh did. But time will tell of course and if anything this whole sorry state of affairs has been very difficult to predict.

TedToToe

Can anybody honestly see business travel returning to pre-pandemic levels? Regardless of the benefit of face to face meetings, businesses have had to embrace Teams, Skype and Zoom! A proportion of these meetings won’t go back to the old norm and how much of a dent this puts on air traffic remains to be seen. Looking at BA’s frequencies from LHR to the major business centres of Europe, so long as they maintain early morning and early evening rotations, I’m sure they could free up sufficient slots in between for a sizeable leisure offering. I’d say BA’s days at LGW are numbered!

JerseyPilot

Quite frankly? Yes. The demise of business travel has been much predicted over the years. The big thing that has been completely overlooked here is it will literally just take that first company to send someone to a face to face meeting and they will gain such a competitive advantage from doing that that other businesses will be forced to respond and will fall like dominos behind them.

BAeuro

Also, if the 80/20 rule doesn’t come back into play until S22 - BA would be foolish to quit LGW now. They’d be best to push this decision back until the slot rules are back and then evaluate the market/demand at that time.

TedToToe

For those with the purpose of going out and ‘winning business’, sure! But after that, the routine progress meetings and updates? I can see corporate travel policies changing across the globe - Can the purpose of this meeting be achieved remotely? Yes/No. If ‘No’ please provide a justification. I would imagine budgets being trimmed accordingly, too. Both of these is true of the company I work for. The in-house travel agent has gone and, post-pandemic, I can’t see it coming back.

BAeuro

Mods, it may be worth combining this thread with the existing one on Gatwick’s future:

BA at Gatwick 2021

TedToToe

The 80% rule is one thing, but a policy of wait and see is not what the board of directors and shareholders will be looking for. In the very near future, I imagine BA needing to make decisive decisions about its routes, fleet and employees.

KeaneJohn

Sean Doyle interview in today’s Sunday Times magazine basically saying we are still evaluating our options at Gatwick. Nothing majorly new in the article.

sxc

Agree. The internal type travel of “back office” is gone or will be massively curtailed.

Gastrocnemius

I read this as IAG trying to keep the slot waiver at LHR going- suggesting to HMG that if they don’t, they will leave LGW