Willie Walsh, CEO of BA, is one of the following: 1) a desperate man clutching at any old idea to save money, 2) A desperate man who has no idea how to run a flagship airline, 3) a desperate man who has lost touch with his customers or 4) all of the above.
After the bold and inventive move of withdrawing free meals to Economy Class customers on most short haul flights that frankly no one missed, he has now come up with equally bold but this time, terribly misjudged, idea of charging for seat selection on flights. And we are not talking a nominal charge either, we are talking £20 per person, per long haul trip and £10 for short haul. For a family of four flying on holiday, this is another £160 on a flight and is akin to the racketeering on parking at airports.
This is now down into Ryan Air and Easyjet territory where you can choose to have priority boarding so you possibly can get the seat you want – but it costs far less, even though it’s just a method of queue jumping. I have flown Ryan Air recently and watched how, for dreadful service, prices ratchet up quickly for providing the most basic things for travel which you cannot avoid, like checking in, for example. But BA has got itself embroiled in the area that is fast diminishing the benefits of low cost travel – the additional costs of flying. What is more, let’s not fool ourselves that online check in and seat selection gives you exactly the seat you want – you just find the one that is available avoiding the middle seat in a group of 3 or getting a window or aisle. The chances of designating your row are minimal. It’s a different service but I came back on Eurostar on Friday where online check in told me there was just ONE seat available in my entire coach but when I got on, every table seat was empty. Every one of them – totally bizarre.
More than this, it shows that Walsh and BA have no real underlying strategy. Common sense tells us in order to compete with budget airlines you have to either differentiate your offering so substantially that people automatically value the price difference as being worth the extra price or you simply get down and dirty and compete at the same level. BA seems to be lost in the ‘Neverland’ in between where they want to maintain premium and differentiated service but now are charging for incrementally on standard fares – not budget ones. In other words, as with the withdrawal of meals, there is to be no corresponding decrease in the base cost of the air ticket which included a meal and seat selection, now you pay the same base fare and more if you want the services previously charged for, not ‘additional’ services as BA are trying to call them. To the simple-minded traveller like me, this is purely a price rise.
BA has had a very troubled year. The Terminal 5 fiasco was the pre-cursor to a lot of under par services in what is a great terminal. The main area is already crowded, half the damn thing has yet to built and so you are bussed to all points around the airport, passport control is usually undermanned when peak times occur and the security checking, and this is shameful, is a huge bottleneck – to the extent that the North entry is reserved for those late for their flights, while the South entrance is for those who have turned up in good time. Think about that – you do what the airline asks and allow plenty of time to check in and your reward is that you queue longer, while it encourages you to actually leave less time, turn up late and you get through security with no queues in just minutes. Go figure.
And let’s not get started on how many channels are available and numbers of staff or the lack of ‘redressing area’ to put all the articles you have taken off back on again. It is so poorly thought through as to make the experience very annoying for the frequent traveller.
To add to BA’s woes it has had to raise £600m of new capital, ask its staff to take unpaid sabbaticals while it has lost shed loads of money. It has been an airline which has relied on the large profits it makes at the front of the aircraft in Club and First Class and, as the recession has bitten, less have been taking such seats. It means the Economy Class has had to compete with the budget airlines, who have been kept out of Heathrow which has worked to their advantage as the airport is rapidly becoming one of the most inaccessible, over-priced building sites in Britain.
The strategy appears to be lacking or is just wrong. Once the airline famous for being the ‘World’s Favourite’ and sponsoring the London Eye, people now remember it more for the annoying introduction music to every piece of video on board which has not changed for years. The plan seems to be a series of knee jerk reactions to the cost base in the airline and strategy has flown out of the window. This is very typical of a weak, indecisive management who have been brought up on the mantra, ‘Milk the good times and cut costs in the bad times’. The reality is that BA has been enduring a slow death for many years and it was humiliated earlier this year when it tried to buy lowly Iberian Airlines only to find when the price was to be paid that BA’s share price had suffered so badly that Iberia was worth more than them.
The daftness pervades. This week, my colleagues and I are off to Portugal for a two day set of meetings. The only BA seats left were Club at £850 round trip – TAP was £430 for the same route, arriving in time to start our meetings at 10.00 prompt whereas BA could not get us in before 11.00. For the loss of a meal and the use of the BA Lounge, we get TAP Economy that does you breakfast on a 2 hour flight. Again, go figure.
Willie Walsh has a tough, tough job at the top of a struggling airline but I would argue that he has little idea about a vision that would see BA redefine itself to recover from these bad times – in fact, I would assert his ideas are making matters worse. Instead they wallow in a series of ill-judged moves that will drive frequent travellers away from them as the lure of cheaper tickets for the same benefits at easier to access regional airports become a reluctant no-brainer.
If I had BA shares, which thank the Lord I don’t, I would sell. Quickly.
No comments:
Post a Comment