Whatever has happened to British Airways?

Quite recently I took a British Airways flight from London City Airport to Zurich and the Embraer 190 aeroplane, seating 98, had just 20 passengers aboard.

This alone would indicate a rather perilous business model, but when I looked at my ticket the bulk of its cost was made up of government taxes and the amount that BA would receive appeared to be around £7.50 (9.33 CHF). I concluded that BA would make more money running a local taxi service.

It was just another indication of this once great national carrier having seriously lost its way. On my many trips on the London-Zurich route, I’ve found Swiss flights always at least half- to three-quarters full, and easyJet ones always almost at full capacity.

A crescendo of criticism for British Airways has been building over the last year or two: passengers have been complaining about seats getting smaller, leg room shrinking in some cases  even below that of Ryanair, First and business class perks evaporating, an abandonment of complimentary food and drinks, and of items on the replacement expensive in-flight menus being out of stock. The ending of free meals initally only affected short-haul flights but may stop on long-haul routes too.

‘Budget Airline’ or ‘Bloody Awful’

Passengers have been proclaiming that BA now stands for ‘Budget Airline’ or ‘Bloody Awful’ and that the quality that made it a respected national airline had been stripped away.

It doesn’t seem to know whether to continue the premium carrier route it has been known for for decades, or chase the budget market. Trying to attract both, with budget-level service not matched by budget-level fares, and a downgraded premium class, has contributed to its undoing.

Last month’s catastrophic computer systems failure that left 75,000 passengers stranded and the cancelling of 726 flights - on one of the busiest school holiday weeks of the year - has already cost the company £80m (100m CHF), according to Willie Walsh, boss of parent company International Airlines Group (IAG). Employment unions noted that there had been hundreds of redundancies in the company’s I.T. department and jobs outsourced to India.

The airline was flooded with complaints, including many loyal customers, who insisted that they would never fly with BA again. This was compounded by a poll of nearly 600 Sunday Times readers, which found that one in two respondents said that they  would never again use the airline.

Things were made worse during the computer failure by poor communication from BA, with some passengers waiting 24 hours to get a response to complaints. One furious passenger, UK resident Amanda Lockhart, compared the experience to being held hostage on the tarmac for five hours with no food, and said she would never fly with BA again.

Rival airlines benefitted from the pandemonium, citing a jump in passenger numbers as people rushed to find alternative flights. BA has had previous I.T. problems, for example computer issues causing huge passenger queues at Heathrow last November and many thousands delayed on flights at 27 airports in September.

The airline group had already been battling with very difficult circumstances, not least the Brexit vote triggering a subsequent collapse in the pound. Its lucrative transatlantic routes are being challenged by American carriers and new budget entrants like Norwegian, Jet2 and Wow. The cash-rich Gulf airlines have been expanding rapidly and leading the way with luxury innovation, while the likes of easyJet and Ryanair have been taking more and more  of the European short-haul market.

Observers blame the business tactics of CEO Álex Cruz

BA has also had long-running disputes with staff over pay and conditions, and indeed up to 2000 cabin crew members of BA’s mixed fleet, which employs mainly younger, recent recruits on inferior terms and conditions to most crew, have just announced that they are to strike from 1-16 July, the longest walkout to date in an increasingly bitter dispute over pay. The latest row started in January over what the crew’s Unite union had dubbed ‘poverty pay’, which starts at around £12,000/14,933 CHF (but which BA says that with flying pay and allowances, most crew earn in excess of £21,000/26,130 CHF).
 
Not only that, but there’s also the not-trifling matter of a £2.8bn (3.48bn CHF) pensions deficit for the airline to deal with.
 
Some observers blame the business tactics of BA’s new CEO Álex Cruz, and IAG’s CEO Willie Walsh and their aggressive cost-cutting measures greatly helping to promote the airlines’ woes. However, despite the numerous problems, both BA and IAG have been enjoying significant increases in share prices, profits and passenger numbers. Whilst this is great news for investors, in the long term it won’t be if passengers start abandoning BA in droves because of falling standards.
 
Before he joined BA Cruz ran Spanish low-cost carrier Vueling -  which, over four days last July under his management saw crisis with nearly 9,000 travellers suffering delays of up to 12 hours and at least 46 flights cancelled.
 
Research organisation Skytrax, which reviews major airlines, now says that it is likely that it will downgrade BA’s rating from 4-star to 3-star, putting it on a par with the likes of Ethiopian Airlines, Uzbekistan Airways, Myanmar Airways and Ryanair - and a worse rating than Aeroflot, which for many years had a dreadful reputation, but which has improved greatly in the last couple of decades.
 
British Airways has come a long way since the heady 1980s, when it styled itself ‘the world’s favourite airline’. Unfortunately it’s come a long way in the wrong direction.
 
True, it’s not unique in having problems: numerous others including Lufthansa, Air France and Air Berlin have been struggling - while Alitalia went into administration. But to survive in the ultra-competitive world of aviation, after such a long series of issues, it needs to radically change direction, and fast.  
 
There have been modest improvements, such as announcing in April a £400m (497m CHF) investment in Club World, improving catering and a new business-class seat, but much more is needed. 
 
For BA executives to have a really good look around at the competition would be a start: if you’re going to offer a budget-level flight, be sure to offer it with a truly bargain bucket price. If it really is cheap as chips, a budget passenger will put up with almost anything. 
 
The same with business class, to do all you can to offer the comfort and catering levels your competitors achieve. If things go wrong, like a computer systems problem or lost luggage issue, pull out all the stops to put it right, apologise promptly and give passengers ongoing copious information.  
 
Oh, and it’d be a good idea to invest in a new computer system that has enough of a backup that an I.T. failure of the shocking  scale recently witnessed never, ever happens again.