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British Airways (IAG LN) to Spend £750 Million on Digital Upgrades

British Airways Plc, under the umbrella of airline group IAG SA, has announced a significant investment of £750 million ($952 million) in information-technology upgrades, including a comprehensive overhaul of its digital infrastructure. This investment is part of a larger £7 billion initiative aimed at modernizing the airline and enhancing customer experience.

The airline plans to revamp its website, launch a new mobile application, and upgrade its digital systems to boost on-time performance. According to the company’s statement on Monday, the £750 million investment will be implemented over the next three years, with noticeable improvements expected by the end of 2024.

Chief Executive Officer Sean Doyle emphasized the magnitude of this transformation, labeling it as the most significant in the airline’s history. Acknowledging past technology failures and operational challenges, Doyle expressed confidence that the substantial investment would lead to marked improvements across various aspects of British Airways’ services.

Over the years, British Airways has faced criticism for outdated digital systems and subpar on-time performance, particularly at London’s Heathrow airport. The airline admitted that parts of its website are more than two decades old, underscoring the urgent need for modernization.

The airline’s commitment to technology upgrades comes in the wake of repeated IT failures that have resulted in flight cancellations and disruptions. Despite challenges, recent performance figures indicate progress, with approximately 80% of flights reported as on-time in January, approaching pre-pandemic levels.

In addition to digital enhancements, British Airways plans to invest in its fleet, upgrade seating arrangements for short-haul flights, and refurbish lounges. These initiatives align with the broader strategy of parent company IAG to fortify its operations and restore its reputation amidst intensified competition, particularly from budget carriers.

Furthermore, British Airways aims to expand its presence in Asia by resuming flights to key destinations like Kuala Lumpur and Bangkok, which were suspended due to the pandemic. While focusing on profitable North American routes, the airline recognizes the strategic importance of bolstering its presence in Asia to diversify its route network and reduce reliance on specific regions.

The airline’s expansion plans coincide with IAG’s overall growth strategy, aiming for a 7% increase in capacity following a record operating profit in 2023. However, challenges such as aircraft shortages may impede the pace of expansion, particularly in relaunching flights to Asia.

As British Airways embarks on this ambitious modernization journey, the airline anticipates a transformative impact on its operations, service quality, and overall competitiveness in the global aviation market.

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