IAG wants to launch British Airways’ new London Gatwick subsidiary next March, according to the airline group’s CEO Luis Gallego. The IAG leader made the comments to Bloomberg during a recent interview and noted that only negotiations with ground staff at the airport remain outstanding.
As a result of COVID-19, British Airways totally paused operations at London Gatwick Airport. Some long-haul flights have since returned. In an attempt to boost competitiveness, the airline is seeking to re-evaluate its offering from the airport, which at this point seems to entail launching a new carrier for short-haul operations.
So, what’s the latest?
It seems as though IAG, the owner of British Airways, is making progress with its proposal to launch a new subsidiary out of London Gatwick. In an interview with Bloomberg, IAG’s CEO, Luis Gallego, commented that talks with flight attendants are making progress. Previously, an agreement had been reached with the airline’s pilots, green lighting the way for the airline.
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However, it’s not all plain sailing yet. It seems as though an agreement still needs to be reached with ground staff before the preparations can truly begin. Gallego told Bloomberg that it will start flying from Gatwick with its new entity in March 2022, assuming that everything goes to plan with negotiations.
Why is this even being considered?
In simple terms, British Airways’ London Gatwick operations haven’t been profitable for the airline. This was the case even before the pandemic started impacting profitability across the board. In September, British Airways told Simple Flying,
“After many years of losing money on European flights from the airport, we were clear that coming out of the pandemic, we needed a plan to make Gatwick profitable and competitive.”
It seems to be to do with British Airways’ competition out of the airport. Of 47 short-haul routes from Gatwick served by British Airways, only four aren’t operated by another carrier (Algiers, Cologne/Bonn, Genoa, and Manchester).
The majority of routes that are served by other carriers are operated by a trio of low-cost giants, including easyJet, Ryanair, and Wizz Air. Of course, with a ticket costing £9.99 next to full-fare tickets at a full-service airline, it is hard for British Airways to remain competitive, suggesting that a critical part of the Gatwick strategy will be lowering operating costs.
Exactly what the new undertaking will entail is unknown at this time. However, according to the Bloomberg report, Luis Gallego commented that the Gatwick proposition would not take the form of a low-cost carrier but rather a more efficient British Airways.
What do you make of IAG’s plans for London Gatwick Airport? Let us know what you think and why in the comments!