British Airways plans to spend £750 million on digital upgrades

British Airways Plc will spend £750 million ($952 million) on information-technology improvements including an overhaul of its website as part of a £7 billion push to modernize the airline.

The former flag carrier, owned by airline group IAG SA, will also release a new mobile app and upgrade its digital systems to improve on-time performance, the company said Monday. The £750 million will be spent over the next three years, and customers will begin to see improvements by the end of 2024, it said.

Repeated technology failures have led to canceled flights while a sluggish online experience for customers and lackluster on-time performance at London’s busy Heathrow airport have trailed rivals. Parts of British Airways’ website are more than 20 years old, the company acknowledged at an event on Monday.

“It’s the most significant transformation in our history,” said Chief Executive Officer Sean Doyle. “A lot of investment, a lot of improvement.”

The spending is part of a broader effort to invest across the carrier’s operations to rebuild a reputation that’s been tarnished as it fought to compete with budget rivals such as EasyJet Plc. The carrier also plans to invest in its fleet with new seats for short-haul flights and upgrade its lounges following a record year of profits for parent company IAG.

British Airways has been plagued by IT failures in recent years, with hundreds of flights canceled from Heathrow last May as systems failed. A lengthy disruption in February 2022 saw flights disrupted for days while long-haul flights were hit by another failure in December.

About 80% of British Airways’ flights were on time in January, close to 2019 levels, it said. A year ago, that performance was closer to 60%, Chief Operating Officer Rene de Groot said.

The carrier also plans to roll out new first-class training and a refresher for all its staff. It cut thousands of jobs during the pandemic and struggled to manage the rapid rebound of travel demand. That led to a lack of consistency in its service, said Lisa Tremble, the head of corporate affairs and sustainability.

Expanding Asia

The airline plans to restart flights to Kuala Lumpur and Bangkok later this year, two flights halted due to Covid. Asian routes have been lower on the priority list, while the region was slower to re-open, as the London-based carrier focuses on profitable routes to North America. Asian routes also take longer to fly as most carriers re-route around Russian airspace.

The expansion to Asia will make a small difference to rebalance BA and parent IAG’s reliance on North America. At the end of 2023, Asia accounted for just 3.5% of parent IAG’s capacity, compared with 9% pre-Covid. North America contributed about 32% of flight capacity last year, exceeding 2019 levels which stood at about 30%.

IAG said last week it plans to grow by around 7% as it delivered a record annual operating profit of 3.5 billion euro ($3.8 billion) in 2023.

BA chief customer officer Calum Laming said in January the airline was constrained in relaunching flights, particularly to Asia, as it faced a shortage of aircraft meaning it could not add new routes or additional frequencies.

Source: bloomberg