https://ift.tt/pjr0Cqu Easter Vacation Rush Won’t Warrant A Great Future For BA – Cryptovibes.com – Daily Cryptocurrency and FX News

An Easter Vacation Rush Won’t Warrant A Great Future For BA – Cryptovibes.com – Daily Cryptocurrency and FX News

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Even as the flag carrier still has ownership and IT issues to deal with, Brits appear to be rushing to book flights with the airline once more.

Will the Easter getaway help in the revival of British Airways (BA) and its owner International Airlines Group (IAG), or will the computer say no? According to IAG forecasts, the start of the summer season and the first big holiday break of the year should bring a bumper crop of passengers after the grim first two years of the pandemic.

This summer, the national flag carrier expects to fly at full capacity on its most lucrative transatlantic services. In the past week, the airline returned to some outposts that it had abandoned at the peak of the pandemic: London’s Gatwick, City airports, and Sydney in Australia.

Nonetheless, it has become clear that BA has yet to rid its systems of bugs of the fear of Covid – if not the actual rate of infection – is reducing.  Customer service has been a repetitive complaint – getting rid of thousands of staff can’t have helped – and in recent weeks, it was put to the test. The airline suffered ripples of presumably self-inflicted cancellations caused by a series of IT failures.

BA has a background in IT problems. The reappearance of this particular problem will have upset passengers as well as investors and seems to have overshadowed previous nightmares. But, BA and IAG have had years to sort out these dodgy tech issues as much as a pandemic is a decent excuse.

Whatever the Germans and French want, at the European level, they get. I think it is assured that BA will be forced out of IAG.

Five years ago, the biggest failure — in days when such disruptions were front-page news — came, with thousands of passengers stranded at Heathrow and around the world. The relatively new BA boss Alex Cruz’s response to the crisis, criticized – fairly or not – as sluggish, appeared to spell the beginning of the end for the Spaniard.

Even though the current leadership has seen more serious problems, solving this one could turn out to be a headache for IAG boss Luis Gallego, who once worked under Cruz in Spain. Claims that outsourcing the IT services had been the problem; a single worker had accidentally tripped the power was angrily rejected by Gallego’s predecessor, Willie Walsh.

The unfortunate engineer who pulled the plug back in 2017 is likely no longer quivering in the toilets, with Walsh gone. Gallego, obviously less combative and markedly less public, has yet to win over industry observers eighteen months into his tenure.

However, especially since Brexit, the change at the top underlines that Spain is now officially where the IAG action is. Although IAG insists this issue has long been concluded, prominent voices disagree. Even though IAG wearily repeats that it has done everything necessary to satisfy regulators, Andrew Lobbenberg, HSBC analyst has not retracted from his view that EU ownership and control rules could come back to bite the group.

A passenger at Heathrow Terminal 5

Nonetheless, the issue may not be regulators. Wickedly stirring the pot last month, Ryanair chief executive Michael O’Leary said that state-owned rivals Air France-KLM and Lufthansa were still “gunning for the breakup” of IAG, adding:

“At the European level, whatever the French and Germans want, they get. I think it is inevitable that BA will be forced out of IAG.”

Even though an IAG without British Airways might seem like the Beatles without Lennon and McCartney, the group’s most recent talks have been about boosting its Madrid hub, with a deal that keeps options open for bid target Air Europa.

Gallego noted that Madrid is certainly cheaper than Heathrow, which has ruthlessly raised charges. Both IAG and Heathrow have strong links with Qatar, which owns 20% of both, and Qatar Airways has been establishing closer operational partnerships with BA.

A summer revival, in the meantime, has been clouded by the rising jet fuel prices and the backdrop of war in Ukraine: IAG’s share price dropped to its lowest since 2021 caused of the Russian invasion.

Customers’ defiance towards predictions that global uncertainty and the spiraling cost of living would dampen demand appears to be good news for IAG.

Brits who really cannot take it any longer and would preferably spend their falling pounds on flying abroad than on insane energy bills are set to at least fill British Airways planes this summer. They and IAG will, fortunately, get there. But, is this momentum sustainable for the long term?

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