Work-from-home culture is damaging revenues, says British Airways owner

BRITISH AIRWAYS parent IAG has said an increase in home working since Covid is holding back demand for corporate travel, even as it predicts a bumper summer for leisure sales.

The airline giant warned that Britain has had a slower rebound in business travel compared with other countries, which has left BA lagging behind rivals overseas in the race to restore corporate bookings.

Luis Gallego, the chief executive of IAG, said yesterday that he expects corporate travel to settle at around 85pc of its pre-Covid capacity, reflecting changes to working practices and the increased use of online meetings.

Volumes at Spanish sister carrier Iberia have already reached that threshold, he said, while BA’s corporate bookings are just 70pc of what they were before 2020. Specifically, Mr Gallego

‘In Spain, people came back to work before and they have less remote working’

pointed to weaker demand from finance and pharmaceutical companies. He said: “It’s different in Spain. In Spain, people came back to work before and they have less remote working.”

By contrast, he said the British corporate travel market is “going to take some more time” to bounce back but is “evolving well”.

Around 90pc of UK companies now offer hybrid working to employees, who spend an average of 1.5 days at home each week, according to data from the IFO Institute. That compares with an average of one day for counterparts in Germany, and 0.6 in France.

This has led to some white-collar companies downsizing offices as staff do not want to give up remote work.

Meanwhile, Mr Gallego said he is not prepared to do a deal at any cost for Air Europa, as IAG seeks to allay European Commission concerns about how the transaction will affect competition.