There must be something in the water within Ireland, for it seems to produce more than its fair share of senior aviation professionals. There are of course Michael O’Leary of Ryanair and Willie Walsh late of Aer Lingus, British Airways, IAG and now the Director General of IATA. Further afield there is Alan Joyce, CEO of Qantas and coming back to these shores, Declan Collier ran Dublin Airport before becoming CEO of London City Airport for five years.
Following on in this long line is Sean Doyle, CEO of British Airways. Like Willie Walsh before him, Doyle ran Aer Lingus before taking the top position at BA in October 2020. Within four months of taking the job, the Corona pandemic was starting to impact airlines across the world, making life tough for seasoned airline CEOs, let alone the newly appointed CEO of BA.
In this month’s CAPA Live CEO interview, Doyle came across as the consummate aviation CEO and dealt with questions on a wide range of subjects with authority and insight.
Pushed by CAPA’s chairman and interviewer, Peter Harbison to complain about the support received by competitor airlines (notably Air France/KLM and Lufthansa), Doyle preferred to comment on BA and IAG, stating that they were focused on ‘self-help,’ having improved their own liquidity through commercial means – raising additional equity, using the bond market and taking commercial loans backed by the UK’s government’s UK Export Finance. Doyle commented that ‘we still have a choppy path to recovery but right sizing the business has helped.’ Right sizing the business involved the loss of up to 12,000 staff and the retirement of 31 B747s, BA’s entire fleet of jumbo jets. Doyle was clear that this action needed to be taken as it will leave a ‘business that is better.’
BA’s biggest revenue market is for routes operating between the UK, primarily Heathrow, and the US. In particular, business traffic has been key to BA’s success in this market, helped by their joint venture with American Airlines and their wider membership of OneWorld. Doyle sees opportunities all around, commenting that he was CEO of Aer Lingus when the airline ordered the A321LR NEOs for transatlantic flying. These long-range, single isle aircraft will allow Aer Lingus to fly into US hubs from European spokes. On the topic of alliances, Doyle was keen to point out that alliances give you more ways to get from A to B. Doyle said that ‘alliances create recognition and loyalty and give travel buyers more solutions’ and noted that they see passengers combining flights, perhaps flying to the US from the UK regions via Dublin but returning directly to Heathrow.
The US market
The US is obviously an incredibly important market for BA and the IAG group. Doyle noted that there is a significant amount of trade between the UK and the US and they are getting feedback from passengers about zoom fatigue. Doyle commented that ‘you do business with people, not organisations.’ Quoting from his Irish heritage, Doyle explained that ‘there is an expression in Ireland which I like, which says that if you want to buy the farm, you have to walk the land. This is very true when it comes to travel, investment and business activity.’ Doyle is confident that BA’s US market will come back strongly, citing that they operate to 26 US cities and 30 in North America and that the breadth of their network gives them an advantage. Doyle believes that BA’s Heathrow hub and the hubs they fly into within the US will become more important when travel resumes.
Turning to the life after the pandemic, Doyle called for an immediate opening up of the UK-US market as both countries are mirroring the success of each other’s vaccination programmes. Doyle further commented that the UK government should look at how the US government is recognising that vaccinated passengers do not have to take tests or quarantine. Doyle believes there is an opportunity for the UK and US to develop a framework for opening up travel that other countries could adopt, saying that people would converge on these rules as the US is such an important market.
In the UK, airlines are awaiting details next month about which countries will be classified as green, amber, or red under the government’s proposed traffic light system. Doyle has called on the government to look at where countries will be with their vaccination programmes in two months’ time, rather than now ‘when you get to the end of Q2, Europe will be a very different place’ said Doyle.’
Commitment to sustainable aviation
The final topic, and one that the aviation industry cannot ignore, related to environmental issues. Doyle pointed out that IAG was the first airline group in the world to commit to the UN’s 2050 date for zero carbon emissions. Doyle believes it will take the industry 30 years to get there. In the immediate term, Doyle pointed out that BA retired their 747s and are now operating B787s and A350s which are 40% more fuel efficient. In the near term, Sustainable Aviation Fuel (SAF) is an option, particularly on long-haul flights, and BA is also investing into research into hydrogen driven aircraft for short-haul missions. BA is keen to push the UK government to build more SAF plants in the UK, stating that SAF can be added into the existing fuel supply. Doyle notes that ‘Being sustainable will be a key dimension of an airline’s right to operate in the future.’
The interview was an interesting and insightful 45 minutes and despite being led, Doyle was keen not to criticise his competitors or the UK government. A change of tone from his predecessor Willie Walsh, but this more conciliatory attitude may well be what’s needed to get BA’s planes back in the air and the airline back to profitability.
Next month’s CAPA Live virtual conference is on 12 May and you can register for free access here https://capalive.app.swapcard.com/event/capa-live/webview/RXZlbnRWaWV3XzEzNjk3MQ%3D%3D