What does the future hold for British Airways?

It's been a turbulent few weeks for the UK's national carrier.

by Stephen Jones
Last Updated: 15 Aug 2019

It was around 3pm when arid black smoke filled the cabin of British Airways flight BA422, plunging its 175 passengers and eight crew into near darkness. 

Ten minutes later, having been guided by a gas-mask-wearing pilot, the Airbus A321 touched down safely at Valencia airport. Within hours of disembarking via the plane’s inflatable chutes, shocked passengers took to the Twittersphere to broadcast accounts of their terrifying experience to the world. 

Less than a week later an IT issue shut down the company’s check-in systems and left thousands of passengers facing long queues, delays and cancellations at three London airports. Again, social media and the papers were awash with images of frustrated families queueing at check-in desks, holidays ruined, with nowhere to stay for the night.  

When it comes to publicity, it’s safe to say that it’s been a bad couple of weeks for British Airways, but then it hasn’t really been plain sailing for a long time. 

The data glitch is the third major breach in three years - one of which saw the carrier fined £183m in 2018 - and bosses are facing more chaos after pilots threatened to strike over pay. 

These high profile problems coincide with a general perception that the 100-year-old airline has cheapened its offering. In Which?’s most recent annual survey ranking the best short-haul carriers, BA has fallen to 15th, down from 6th five years ago, with some customers comparing its business class offering to "Ryanair but with free food". 

So what’s gone wrong?

In some ways BA’s hand has been forced, explains Andrew Charlton, managing director at Aviation Advocacy. The "commoditisation" of its offering has been part of cost-cutting exercise in order to compete with the rise of budget carriers that entered the market in 1993 after the European Union loosened the barriers to national travel.

The cutbacks (think having to pay for your M&S ham sandwich on short haul flights) have ensured that the business remains profitable. BA made £2bn in post-tax profit last year for parent company International Airlines Group, which also owns Aer Lingus, IBERIA and vueling (among others). This was also despite paying out nearly £80m in compensation to customers affected by a systems outage in 2017.

It might have kept the balance sheet ticking over, but at what cost to its reputation?

"BA can’t underestimate the value of experience over cost-cutting," says David Blair, global CEO of retail and brand consultancy FITCH, who says that the company will need to remember what made it unique for the past 100 years - a commitment to high-quality and a reputation as a first class innovator - if it is to regain its standing among customers. 

Charlton is more pragmatic, saying that BA’s reputation has simply moved from the premium space, and that the "dumbed-down" model is the new normal for carriers in an industry where price will always be the real driver of sales. After all, he says, history shows that passengers will choose the cheaper airline time after time. 

"Passenger expectations have become more realistic," says Charlton. 

He believes - although is keen to avoid speculating - that BA has been a victim of bad luck when it comes to IT, rather than over-zealous cost-cutting. Data breaches are not uncommon among airlines of all stripes - both Wizz Air and Cathay Pacific have suffered data breaches in the past two years, for example. 

"I think given a combination of just making sure that they keep their pricing clean and they don't actually mess up in some really serious way, then I think the hits to BA’s reputation are manageable," pointing to the quality of its crisis management.

"Whenever things go wrong, you can depend on the aviation industry to handle things very professionally," says Charlton. "We all acknowledge that sometimes things can go wrong that are nobody's fault. The question is not that you had a catastrophe, the question is, how did you respond to the catastrophe?"

When it came to saving the lives of the 183 people on the Valencian runway, BA passed with flying colours. The UK’s national carrier might be experiencing a slight identity crisis, but it will hope this turbulence will pass.


Image credit: White British Airways Taking Off the Runway via Pixabay

 

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