If you’ve turned on a TV recently, you’ve probably been surrounded by the choral hustle and bustle of British Airways.
The airline has launched its first new advertising campaign since the pandemic. It shows the crew and pilots waking up from hibernation.
The marketing blitz coincides with the resumption of flights to the US, BA’s big money spinner. The lifting of the travel ban meant that after two years things were finally looking up for BA. At least that was the plan. Then along came Omicron.
Shares of BA’s parent company IAG have sank nearly 20% since the identification of the Covid-19 variant late last week. analysts are now Raising doubts about rival Virgin Atlantic’s efforts to raise £400m, Shares of other travel companies have also declined.
It’s easy to see why investors are pressing the sell button. EasyJet today exposed the incredible cost of the ban: a loss of more than £2 billion over two years.
Travel restrictions are limited for now, but that could change in a short time. We still know very little about Omicron. New information can lead to drastic measures.
Airlines have already tapped investors for billions and many shareholders will now panic that another cash call may be coming soon.
Investors won’t cough forever. Consolidation seems likely. EasyJet promised growth when it shelved an attempt to acquire Wizz Air earlier this year, but now it looks tough. The Hungarian challenger may want to consider the second inclination.