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IAG Capital Markets Day - 21st November 2023.

IAG Capital Markets Day - 21st November 2023.

Old Nov 21, 2023, 1:53 am
  #1  
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IAG Capital Markets Day - 21st November 2023.

IAG is holding its first Capital Markets Day today since COVID-19. Hopefully there'll be some BA related announcements during the day. Here's a summary agenda from IAG:

https://www.investegate.co.uk/announcement/rns/international-consolidated-airlines-group-sa-cdi---iag/iag-capital-markets-day-2023/7893832

Speakers will cover:

- IAG's leading positions in the world's most valuable and growing aviation markets;

Strategy to deliver sustainable growth through our strong brands, attractive customer base and disciplined approach to capital allocation;

Further capital-light growth from partner airlines in high-growth markets, accelerated by IAG's market-leading Loyalty business, which delivers sustainable year-round cash flow;

How we are transforming our businesses to deliver higher customer satisfaction, sustainable operating profit, and world-class margins and return on capital;

Our objective to target over €1.5bn in operating profit from our Spanish businesses;

IAG's continued investment in, and leadership of sustainability as a long-term sector value driver;

Our plans to maximise total shareholder returns from earnings growth, an ordinary dividend and additional shareholder returns, underpinned by a strong balance sheet
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Old Nov 21, 2023, 5:47 am
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Heres the full slide deck. The BA specific slides are from 84 onwards:

https://www.iairgroup.com/media/acyp...tion_final.pdf

Its very operationally focused but does confirm that the Club Suite will be on all Heathrow aircraft by the end of 2026.
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Old Nov 21, 2023, 6:02 am
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I note the consistent elite tiers on slide 69, which I take as consistency between BA, IB, and maybe EI. Im going to take this as meaning changes to BA tier point earning are on the way and that theyll likely be harder to achieve rather than the same.
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Old Nov 21, 2023, 6:22 am
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Slide 28 is interesting where it refers to selective growth in certain markets like Australia, Canada, India, Middle East and New Zealand via DOH & MAN.

There have of course been rumours that BA could serve Australia via DOH.
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Old Nov 21, 2023, 6:30 am
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That MAN reference is interesting. I thought it was a reference to EI's MAN ops at first but interestingly the US doesn't get mentioned as a region of target. Presuming they're not about to launch MAN-Aus/NZ flights, that leaves India, Canada, Middle East and intra-Europe as the options. EI to Toronto and some sort of Vueling base at MAN wouldn't shock me.
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Old Nov 21, 2023, 6:46 am
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Very little that excites me where BA customers are concerned, sadly:
  • A 'step change' in NPS is mentioned but, tellingly, no data on what it is now, what the target is, and in what time frame (Iberia's NPS IS mentioned)
  • Page 55, I don't understand the differentiated vs. competitive diagram, is the former meant to be superior to the latter? If so, then I am taking this with a very large pinch of salt as BA thinks its lounges are superior to the competition...
  • 7B in 'transformation' which is almost all on replacing aircraft at the end of their usable lives
  • Page 87, 'Upgrading our end-to-end customer journey' - Global Lounge Refurbishment - is this what's happened at T5B? I see here it's called a refresh not a refurbishment... Am genuinely confused as to whether that's the standard we should expect to see at T5A eventually?
  • Food is mentioned as 'enhanced' (gulp) and 'evolved' which does not make me think anything ambitious or radical is planned
IAG has net debt which is way higher than AF/KL or LH so I get that they are trying to claw their way out of that hole, but with the forthcoming economic situation I doubt they will be able to continue to command high fares with such a tired product compared to the competition (and even Iberia)
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Old Nov 21, 2023, 6:54 am
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There's some fascinating stuff here, e.g. the below on IAG's most profitable routes:

My guesses would be:
1. NYC
2. EZE or SCL (this one doesn't totally make sense)
3. BOS
4. LAX
5. GRU
6. ORD
7. MIA
8. DXB
9. SFO
10. IAD
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Old Nov 21, 2023, 7:42 am
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Originally Posted by lost_in_translation
There's some fascinating stuff here, e.g. the below on IAG's most profitable routes:

My guesses would be:
1. NYC
2. EZE or SCL (this one doesn't totally make sense)
3. BOS
4. LAX
5. GRU
6. ORD
7. MIA
8. DXB
9. SFO
10. IAD
Interesting chart. And interested in hearing other views on this. Agree that NYC is #1. Trying to work out the chart based on where Level flies to (which is NA is NYC, MIA, BOS, LAX and SFO). So only #1, #3 #4 and #9 can be one of those destinations. So I think #7 cannot be MIA since Level does not fly there, therefore I think MIA is actually #9.
And the Gold stars? Might be F routes perhaps?
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Old Nov 21, 2023, 7:46 am
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Slide 126 suggests BA network will be increased significantly thru to 2026 relative to its peer brands.

I also think references to DOH in slide 28 simply mean more connections to QR thru DOH rather than an increase in BA metal over DOH. There is another slide later (cant find it now) suggesting more reliance on network expansion through the various joint business relationships with Finnair and JAL, QR, and China Southern.

BA likely to further expand US network and frequencies - as always!
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Old Nov 21, 2023, 7:55 am
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Originally Posted by BA or bust
Interesting chart. And interested in hearing other views on this. Agree that NYC is #1. Trying to work out the chart based on where Level flies to (which is NA is NYC, MIA, BOS, LAX and SFO). So only #1, #3 #4 and #9 can be one of those destinations. So I think #7 cannot be MIA since Level does not fly there, therefore I think MIA is actually #9.
And the Gold stars? Might be F routes perhaps?
The gold stars are North American routes. I thought that with #7 but there's something weird going on there with Aer Lingus having a negative amount of profit from the route so I ignored Aer Lingus and Level, and it's the only North American route I could think of where IB's profitability will be able to rival NYC. #9 cannot be MIA as MIA is one of IB's flagship routes.
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Old Nov 21, 2023, 8:07 am
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Originally Posted by BA or bust
Interesting chart. And interested in hearing other views on this. Agree that NYC is #1. Trying to work out the chart based on where Level flies to (which is NA is NYC, MIA, BOS, LAX and SFO). So only #1, #3 #4 and #9 can be one of those destinations. So I think #7 cannot be MIA since Level does not fly there, therefore I think MIA is actually #9.
And the Gold stars? Might be F routes perhaps?
The Stars may just mean that these are JV revenue-sharing routes so not all the profit is earned on BA metal?

I think #7 might be DFW
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Old Nov 21, 2023, 8:19 am
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Originally Posted by southlondonphil
The Stars may just mean that these are JV revenue-sharing routes so not all the profit is earned on BA metal?

I think #7 might be DFW
I am still fairly sure that one is MIA.
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Old Nov 21, 2023, 8:33 am
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A lot of self-congratulating going on in this slide that doesn't align with reality, any NPS or empirical evidence today; or 2024... or beyond.

Would really like to see Aer Lingus join OW given they are part of the JV and have just cut ties with United and increased code-share with AA.
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Old Nov 21, 2023, 8:37 am
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Has the Q&A been made available yet? That’s usually quite enlightening.
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Old Nov 21, 2023, 8:49 am
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So no plans in this for Club Suites at LGW, which leaves Gatwick passengers flying on a hard product thats 20 years old for some years to come and no mention of a new First product.

I see cost cutting is enhanced to strong cost discipline and cost efficiencies.

Lots of words and figures about IT investment so thats a positive providing its done well.
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