Futureproofing: Looking At British Airways’ $8.8 Billion Investment Program

At the Altitude25 conference in Lisbon this week, British Airways’ Chief Commercial Officer, Colm Lacy, revealed details about the carrier’s bold transformation for the future. Part of this investment touches on plenty of technological improvements, including a brand-new app and website. The whopping £7 billion ($8.8 billion) investment covers all sectors of its operation and will last through 2027.
Reinforcing its position in London
Investments in several domains related to its hubs in London (namely at London Heathrow Airport and London Gatwick Airport ) will serve to reinforce its existing, dominant position. British Airways says it benefits from what is a lucrative market. Lacy said:
“We want to grow and strengthen where we are in terms of London, the world’s biggest airline market, and particularly for premium travel.”
Photo: Amadeus
The investments will touch areas such as fleet renewal (which will form the vast majority), net-zero tracking, engineering and operations, the modernization of commercial and IT systems and updates to the customer proposition.
Engineering and operational improvements will be key to a strengthened position in London. Lacy referenced the recent announcement by Boeing that it would sell its hangar to British Airways in a move that would help smooth out any operational challenges.
He said that the agreement would “increase our stability in terms of our MRO and making sure that not only do we deliver aircraft in terms of the effectiveness and having the stability of our fleet, but also from sustainability that we aren’t shuffling our aircraft between our bases across Heathrow and Gatwick.”
According to Cirium data for February 2025, British Airways boasts a 51% market share in terms of the number of two-way flights at London Heathrow, and a 13% share at Gatwick. At the latter airport, it is the largest airline after easyJet.
An increased focus on premium passengers
The overall investment will provide an increase of approximately 5 points to its EBIT margin, Lacy argues, from 10% in 2023 to 15% in 2027. This will be facilitated through the above-mentioned investments, as well as transformations in its commercial and cost structures. The 5% increase will be brought about as follows.
The first percentage point will come from growth in corporate travel. The remaining 4% will come from transformations across several domains. This includes improvements to the digital experience, behind-the-scenes technological updates, upgrades to existing premium products (such as its Club Suite or lounges) and loyalty program.
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The airline will also need to make improvements to its punctuality levels and overall cost discipline.
“We’ve already seen a double-digit improvement in our on time performance, but it needs to be actually combined with real cost efficiency, but strong cost discipline, something that in the airline industry may be questionable over time.”
A complete digital transformation
An essential feature of the airline’s substantial investment is the digital side of things. The carrier hopes to roll out a brand-new website and mobile app, arguing that the current technology does not meet customer needs and demands. Lacy said:
“We have to have 100% serviceability online to meet our customers’ needs. That’s what they expect, that’s what they demand. You know, modern technology is important. We have to get that stability; we have to get that security. We have to get the ability to use data and AI, and we’re on that in terms of our journey.”
Photo: British Airways
The current British Airways website and app cannot easily be adjusted to bring new products to customers, Lacy says. One of the primary topics of his talk covered modern airline retailing (things like selling additional bags, seat selection and beyond).
“It’s about transforming the way we work, getting our new digital platform out there, getting the innovation and providing surety that we actually get rid of some of the technical debt. We have a mess of the ecosystem that we’ve added to over 20 odd years. This is an opportunity to simplify it moving forward.”
In April last year, BA signed a deal with Amadeus to introduce the latter’s Nevio solution, “designed to meet the needs of modern airline retailers.” The platform, which is in its early stages of development, will allow airlines to propose personalized offers to customers for things like fast-track security, extra bags and more.