Is British Airways at risk of a crash landing?

SUMMARY:

By cutting costs, one author claims British Airways is sowing the seeds of its own demise. It appears many otherwise loyal customers are in agreement. If true then it is in deep trouble.

british airwaysBritish Airways is in trouble. That’s the claim of one author.  Last weekend, I read: British Airways: a brilliant example of how cost-cutting increases costs by Rowan Jackson.

The title tells its own story. In a nutshell, the author makes the claim that by continual cost cutting and IT outsourcing, British Airways faces a massive remake cost to its IT systems. The author also claims that cost cutting has denuded customer service.

At the time of my story, Jackson’s counts 661 comments, 1,376 share and liked 5,871 times. At the time I read it, the comments ran 425.

Those stats are impressive enough but there is much more to this than yet another swipe at a major airline. This is way more than United Breaks Guitars.

First, the story is well constructed, laying out the history of this once iconic airline. It explains how British Airways achieved premium status and the successive steps that have eroded the customer experience. Jackson makes special note of the recent IT outage that grounded the airline. The author does so without the oft seen hyperbole and hysterical harkening back to a dewy eyed golden age or undiluted management bashing that characterized much of the ire pointed at airlines. In short, it is a (mostly) sober piece of fact driven argument around why BA is failing.

Second, the author comes from a position of authority. Check this:

I have been a member of British Airways Future Lab for over four years. This is the British Airways method for obtaining detailed feedback from customers. It is done via a special website and a series of questions we members answer every week. It appears most of the members are, like me, Gold Card holders. These are the 20% of customers who provide 80% of British Airways’ revenue.

Over the last few months I have noticed a trend in the comments on Future Lab. Many are frustrated that British Airways does not seem to pay any attention to what we say and takes no action on our suggestions. This is despite that, from reading the comments, it is clear that members of Future Lab want British Airways to be successful and make the airline competitive, improving and to have an excellent customer experience.

And it is not just the customers that are unhappy. Currently about 58 cabin crew are resigning at Gatwick every month; this is not sustainable.

(My emphasis added)

That caught my attention. If British Airways isn’t listening to this highly valuable and knowledgable group then who is it listening to? That spurred me to read through the comments to the story. This is what I found.

  • Other than a few comments questioning the economics of the author’s claim that outsourcing business critical IT is a disaster in the making, virtually all the comments say something like: ‘100% agree.’
  • Many of the comments were made by people who you can reasonably anticipate are frequent flyers and who hold positions of seniority within their companies. Titles like CEO, CIO, CTO, director and so on are common. A good number of the organizations they represent are easily recognizable. Think Xerox, Henley Business School, Saudi Aramco and many others.
  • Many of those leaving comments, much like the author, want BA to be successful.
  • As far as I could tell, apart from a sprinkling of retired BA employees, not a single customer service or senior person at British Airways left a comment. Neither did anyone from British Airways offer to hold a conversation with anyone on the threads.

Talking with colleagues and thinking of my own experience, it is hard to argue that British Airways is on anything other than the down slope. Its once super friendly, always smiling customer reps are clearly under pressure. Cabin staff are often rushed and far less attentive than in the past. The more visible problem comes in the company having given over their much loved free drink and small snack on short haul to a paid for service that carries the Marks & Spencer brand.

For those not familiar with Marks & Spencer, this is a much loved British grocer cum multi-category retailer that is often considered a premium brand. So far so good. One could almost forgive British Airways for charging. But what you can’t forgive them for is routinely running out of products. That could not happen under the previous arrangements. Everyone received the same and the company could cater for flight loading without difficulty. Now, with multiple choice, a lack of experience and data on what people prefer, the onboard catering service is chaotic. That holds the potential to damage two brands.

Couple that with a much degraded loyalty program and is it any wonder that voices of complaint are far more frequent than they might have been in the past?

Much more worrying must be the risk that British Airways is creating because there comes a point where otherwise fiercely loyal passengers who account for significant revenue to the company simply drift away. It is hard to know the potential impact but in our case, and collectively we don’t travel as frequently as some, that would amount to at least £20-30,000 per annum, much of it on the highly prized long haul routes.

We’re a tiny business with a handful of people flying reasonably regularly on both short and long haul. I was a Gold Card carrier for several years and still, miraculously, hold Silver status. Colleagues are much the same. Multiply that a few thousand times and at much larger organizations and the revenue risk has to be huge. Has British Airways thought this through?

If its lack of attention to its most loyal customers is a modestly accurate gauge, then the answer has to be an emphatic ‘no.’  But then history teaches us that even the most outrageous incidents don’t shift the needle enough for the airlines to modify their behavior. In the U.S. and despite the United Breaks Guitars debacle and the harrowing attack on a passenger caught on video, United shows no signs of going away. They’re playing a dangerous game of poker but one where one assumes they think the house can continue to win.

My take

We keep hearing from large organizations that they want to provide the best customer experience, that they are customer focused, that the customer is at the center of everything they do and yes they want to invest in the technology that will assist in furthering those goals. That is patently untrue in the case of some of the most high profile airlines. Instead, managements hold themselves hostage to a self imposed ritual of feeding the short term appetite of the financial market beast at what appears to be any cost.

It does not have to be this way. I am firmly of the view that it starts with tone at the top and an ongoing commitment to the people who make a business great. Every company will make that commitment too but when the customer experience is a reflection of staff disaffection then is that claim true either? If not then it makes a mockery of the British Airway motto: To Fly, To Serve.

I close out with part of what Jackson said of the days when British Airways was a great company:

Sir Colin (CEO British Airways) was a deeply experienced leader who had invested very heavily in creating the unique British Airways’ customer experience for the “world’s favourite airline”. He made mandatory attendance at a training program called Putting People First and attended in person at the end of every program to take employees’ questions. All those in leadership positions went through its sister program Managing People First and he attended that one too. A charismatic forthright, rigorous and determined leader, he made British Airways a customer driven company.

Sadly, none of his successors have had the IQ or the EQ (nor the training he had as a Purser in P&O) to understand the world’s favourite airline customer experience or to keep it going. Since the Marshall days the British Airways’ customer experience has been progressively eroded by a succession of cost cutters.

Image credit - British Airways