20 AUGUST 2018
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Last week’s COMMENT asking the question “Is IAG a Brand?” seems to have created considerable interest, easily topping the BTN “hitlist”. It raises a further question – where does BA go from here?
British Airways was created in 1974 with Lord King and Colin Marshall in charge. Then came the turmoil of the Robert (Bob) Ayling (ethnic tailfins!) era. Australian Rod Eddington steadied a rocky ship and handed on to Irishman Willie Walsh, out of work at the time. BA was considered by many still to be ‘the World’s Favourite Airline’. Eddington received a knighthood for his efforts.
Earlier in 2005, Walsh, a former pilot, had left Aer Lingus after a failed internal coup, and previously had been unsuccessful in sorting out a Spanish airline, Futura, in which the Irish carrier was a shareholder. Subsequently, the then Irish Taoiseach, Bertie Ahern, described Walsh's offer of an MBO as "a time when management wanted to steal the assets for themselves through a management buyout, shafting staff interests".
It is exactly ten years since Walsh introduced a merger of British Airways and Iberia. It was consummated in April 2010.
In 2012, Walsh announced the creation of International Consolidated Airlines Group SA (IAG), a partnership with the loss-making Spanish airline, seen by some as a bad move as it would divert funds and resources. He would be chief executive officer.
Were the needs of London and Madrid the same? His suggestion of hubbing through Madrid was also questioned. This policy has been reversed in more recent times, with travellers to and from South America clearly wanting non-stop flights rather than traipsing through the terminals at the Spanish capital. IAG then moved into its own headquarters away from BA's Waterside and gained 100 (expensive) staff. And in more recent times retreated back!
During Walsh’s BA tenure, the French airline L’Avion was purchased by British Airways, recast as Open Skies, and has now been recreated as Level, with high hopes of defeating the well-established long-haul low-cost carrier Norwegian – a battle involving the Airbus A330 vs the Boeing B787.
The quiet Keith Williams, who succeeded Walsh as BA chief executive, just as quietly resigned in 2015 and is now deputy chairman of John Lewis. He was succeeded by Spaniard Alex Cruz who in a series of high-profile moves had created the airline Click and reversed that into Vueling, which in turn was bought by IAG after a long-drawn-out battle over the price.
Cruz in the early days was seen as media friendly, very aware that any mention of him meant a mention for the airline. Since those heady times he has become less and less visible. As CEO, he does not seem to be BA’s chief salesman. The late Colin (Lord) Marshall, and even Ayling, always focused on that role. Cruz’s relationship with many of the media, which once saw him as the champion of a new BA, seems to have deteriorated, or even to have paled into non-existence. Some journalists were removed from the media distribution list in Walsh’s time, with requests for reinstatement ignored.
BA’s profits continue to rise while Iberia, after a struggle to get into the black, has now in the latest half-year results dropped behind Aer Lingus. The takeover of EI by IAG may have been something of an historic job left unfinished by Walsh but it does seem to have worked.
What happens next? BA cabin standards are being questioned. Fuel prices are rising. Can the IAG airlines deal with it? The former staff newspaper, British Airways News, is no longer around and so it is difficult to gauge how the workforce view things. They are the interface with travellers. As for the public, Business Travel News questioned seven days ago “Is IAG a brand?”, or should BA still be “Flying the Flag”?
The perception of BA as a legacy airline is falling. Where does all this leave Walsh? The proposed takeover of Norwegian seems to have floundered and a rumoured Finnair involvement clearly has come to nothing. Does British Airways need a new direction? Is it time for him to go?
All comments are filtered to exclude any excesses but the Editor does not have to agree with what is being said. 100 words maximum
Catherine Chetwynd, London
I agree that BA has been dumbed down but BA and other airlines have to compete with low-cost carriers on short-haul routes, so it did not have much choice but to introduced paid-for menus - though using M&S to suggest upmarket dumbed-down is a joke. When I flew premium economy two years ago, I thought service, food and comfort were good
Brian Donohoe, IRVINE
Over the many Years I've witnessed a dumbing down in the service All very sad.....
John Mountifield, Farnham, Surrey
Whenever possible, I flew BA as a business traveller during a long career in aerospace. It's sad for me to see the demise of BA - looks like management had its head in the sand for too long.
David Learmount, London
You have put into words what a lot of people are thinking. BA has lost its personality. It has a priceless brand, but even that is fading.
Rod Muddle, Farnham
An interesting article but some correction is necessary. Lord King and Colin Marshall took over in the early 80s followed later in the decade by a successful privatisation and in the early 90s by a profits turn-around.
franco mancassola, honolulu
The new breed of managers fancy themselves as "acute business geniuses" but they may fail to understand that a different type of management is required in this new business era, one that realizes that responsibility begin, rather than end, when the passengers boards the aircraft. In business there is nothing more fatal than cunning management.