I don't think so if the group who wrote to the Guardian newspaper about the intransigence of Willie Walsh and British Airways management are an example. What they appear to be complaining about is that Mr Walsh is actually doing what he repeatedly warned the staff and unions he would. That does not seem such a heinous approach to me.
To my mind Willie Walsh currently has the easiest job in the World. His strategy is a no brainer in that he will not have an airline to run unless he does what he is doing plus he is getting general support from customers, other employees and importantly his shareholders. How many other bosses could claim that!
As for the cabin crew I really feel for them. Their unions have led them on a dangerous path, they are fighting the inevitable and, if they win they will probably lose both their jobs and pensions in the process. As for those worthy academics? I suggest they do their sums and realise that for this airline to survive maybe some "unilateral management" and bruising a militant union's egos is an acceptable price to pay for staying in business.
British Airways Groups Management deserves credit for the way they have tried to help passengers overcome the problems caused by the strike. My son and an assortment of 42 other pupils, teachers and parents were due to fly out to Zurich for a skiing holiday last Saturday. The flights were switched to Friday and the return to yesterday evening there by neatly sidestepping the impact of the strikes. That's good management. 43 potentially very unhappy customers in T5 would not have been a pretty site but it would have made headlines!
ReplyDeleteI am not so convinced that the battle between British Airways and its Unions is a display of such good management. BA already has one saving achieved already in having unilaterally removed strikers perks and that will save BA quite a lot of money, but it pales into insignificance in the short term at least in terms of what this dispute is costing BA in terms of using other airlines to fulfill its services.
ReplyDeleteEqually, I look at all the developments in recent years which should have made airlines massive profit generators were it not for the impact of the cost of massive fuel hikes.
Just think for one moment.
IATA has actively promoted the introduction and global adoption of e-ticketing substantially reducing the costs of hard copy tickets, increasing the flexibility of airlines by enabling passengers to print off their tickets at the airport without the need for hard copy tickets from an agent.
British Airways and other global airlines have cut commission to agents to zero in many cases.
The client now pays Travel Management Companies to provide a service to their employees. Again a massive cost shift away from airlines to the end user and intermediaries.
The curtailment of take-on luggage and the significant rises in baggage charges have not only increased the revenue for airlines like BA, but have also enabled them to reduce fuel consumption and thereby save significant amounts of money.
The significant variation in fuel charges imposed by various airlines have all contributed to raise additional revenue.
The ability of airlines like BA to form alliances like One World and Star Alliance and the increasing integration, code sharing, yield management and cost efficiencies inherent in such developments must enable the airlines to save a huge amount of money running into billion of pounds - not least from reduced competition.
Some airlines, like BA have also cut their in-flight services - the quality of in-flight food is increasingly becoming a point of significant differentiation in the perception of the quality of service delivered by various airlines. Airlines, particularly Middle Eastern and some Far Eastern airlines have identified this as an opportunity to be seen as out performing airlines like British Airways. After all the customer experience of the service of any airline - except where passengers are disrupted by strikes, bad weather etc is greatest in the air, where how one is looked after directly impacts the perception of a passenger most - both in terms of time and in terms of whether it is an enjoyable experience or not.
British Airways is exposed to a deterioration in the perception of its service both because of disruption due to the strikes, airline service substitution and because of travelers' experiences of other airlines they are perhaps using for the first time to avoid getting caught by strike disruption.
In addition British Airways is along with all airlines a victim of the industry's success in delivering huge economic benefits so the Green lobby are used as an excuse by Governments for the introduction and continued increase in 'Green taxes' along with the tax on jobs in terms of increases in employment costs announced in our own budget, this past week.
British Airways is attacking one element in a much larger picture of cost increases from numerous sources. Where it may turn out not to be a very good piece of management is that it only represents one element of cost and at the same time it is undermining the link between British Airways and its clients by forcing/ encouraging the travelers to use other airlines where they may actually discover the quality of in-flight experience especially on long haul flights is better and more personal.
British Airways will have to work very hard to regain the faith, confidence and loyalty of its clients if this strike continues.
Probably one of the greatest cost additions faced by the airlines and BA in particular as our National flag carrier is the massive shift in costs generated by the security requirements which governments continue to impose whether or not the actual threat merits the level of expenditure demanded or the restrictions imposed on airlines.
ReplyDeleteArguably, the focus of British Airway’s Management should be on saying to Governments enough is enough- travelling by air is relatively safe. It is never going to be 100% and if allegedly the Israeli's can clone biometric passports so too can terrorists so all the vast cost on that security apparatus should be reviewed and justified before we go further down that road imposing more costs on airlines and their clients.
British Airways is taking a very big stick with which to beat the unions into submission. It has planned the campaign with care after nearly getting caught out at Christmas where it was only saved by the Courts. Management has caught up from being caught on the back foot, but whether its response is either wise or proportionate is open to debate.
Those airlines with vision who invested in the A380 are reaping the benefits and British Airways is exposed on key money earning routes where the A380 offers a level of service and comfort which threatens to make British Airways service offering look old and tired by comparison.
Shareholders will want to know where all the savings already achieved through technological advance, structural change in the industry, cost shift to clients and airlines mergers and more effective yield management have gone.
They will also question the strategic decisions which have been taken hitherto.
At the moment the Management is ahead on points, but the balance sheet will tell the ultimate cost of the failure to negotiate a resolution to the strike before they happened.
Unfortunately, with a General Election in the offing, there is a sense that political considerations took precedence.
Fantastic and valuable comments.
ReplyDeleteKeep them coming as I am sure myself and others want to read them.
cheers.
MIKE
p.s ironically taking away perks might not be a saving as 10% for a seat is better than nothing if that seat otherwise goes empty. as soon as the wheels lift off the ground the value of a seat goes from a lot to nothing!