Overpaid Officials?

If you want an early new year titter, read the linked article on Ryan Air and the OFT.

I quote a magical response to criticism that Ryan Air only allows one type of obscure method of credit card payment in order to get round legislation that would normally prevent it from advertising all flights with credit card fees included, which would mean almost double the fares in many cases of their advertising.

"Ryanair is not for the overpaid John Fingletons (of the OFT) on this world but for the everyday Joe Bloggs who opt for Ryanair's guaranteed lowest fares because we give them the opportunity to fly across 26 European countries for free, £5 and £10. What the OFT must realise is that passengers prefer Ryanair's model as it allows them to avoid costs, such as baggage charges, which are still included in the high fares of high cost, fuel surcharging, strike-threatened airlines"

I am sure John Fingleton of the OFT may have a case to question if they know how much he is paid and whether that compares badly to the money the spokesman at Ryan Air earns but here's how the Ryan Air little dodge works.

For every passenger booking a flight there is a single credit card fee of £5 even if the total is paid on a single credit card transaction - so if 4 passengers are booked on the same transaction, then the fee taken is £20 ($40 if the flights are returns), whereas the actual underlying cost is between 1.5% and 2.5% of the value of the original transaction. All airlines are up to similar stupid tricks at the moment but I have been victim of Ryan Air's wheezes where quoted costs are miles off the actual price paid.

It's not a debate to get into early in the morning because I think Ryan Air have done a great deal to open up air travel across Europe but their advertising has consistently annoyed me as it bears no relation to the real costs you pay and the total rubbish service that ensues - they squeeze every penny of profit they can out of people.

It's a little conundrum on a Monday morning, but if Ryan Air actually do provide millions of seats across Europe at little or no cost, then how do they make their money (and their profits are very nice)? And even if a fair proportion of passengers do pay through the nose as I have done for small incremental services, what things do Ryan Air not pay for that other firms do that costs them significant operating costs?

It's a little thing, but I would hope pilots and engineers are paid and used consistently across all airlines, or am I being naive?

Take Off or Landing?

It's taken two years and arguably when it all started it seemed like a good idea, but the merger between BA and Iberia Airways has finally been agreed. Willie Walsh, CEO of BA, has hailed it as 'Good news for passengers'.

In the last 18 months of intense European travel, the two airlines I personally rate the worst for service are BA and Iberian so it could be said this the merger of two airlines who have lost their way and have resorted to the old adage of 'two heads are better than one'. Both companies made whacking great losses, with BA clocking up £292m in the last six months and Iberia €182m in the last nine months as they competed to be the airline who could clock up the most losses in the shortest time - it looks like a dead heat. The interesting thing is that passenger numbers are similar with BA at 33m and Iberian at 28m yet BA operate 246 aircraft to Iberian's 174 which suggests a disparity on loads. Also, the overlap on destinations means that both airlines get benefits but that creates a problem - how do you drive the kinds of savings you need to get any benefit and keep the same number of routes operating?

This is the real problem - the estimated £358m of savings nowhere near covers the combined loss and it is not clear how the savings will come about. The new headquarters will be in London and Walsh will be the new CEO - none of the news so far is actually very encouraging.

Ryan Air sees this as 'Two drunks propping themselves up' and for once they are spot on and not being loony. On the face of this it is exactly that - two airlines who had run out of ideas and strategy think that combining two worthless strategies and ailing businesses, led by donkeys, will actually solve their problems. It really is a merger devoid of inspirations, carved out of a desire first dreamt up in better days. While big can be beautiful, the merged companies are going to spend the next two years arguing over cuts and who does what as the industry emerges from recession. A really clever move by two companies that have hit the recession with no real idea what the core strengths of their airlines are.

Walsh's only victory seems to be that BA will be the dominant company with the HQ in London and 55% of the shares owned - and he is CEO which seems to be a sad indictment of the combined management talent of the two companies. BA has been particularly rudderless and idealess during this recession with an emphasis on lack of strategy and daft ideas on cost cutting, while their low cost competitors have thrived. As fuel prices came down to help costs, BA fared worse than before and the underlying profitability of the business is virtually broken. BA and Iberian are caught in the no man's land of European airline strategy and the combination of the position does not actually help them with such poor leadership at the top. No wonder the staff look to the HQ and ponder what will happen next.

One thing is for certain, two huge clouds hang over this merer long before they try to get any strategic or operational benefit - 1) the impending action by a once loyal staff against the suicidal efforts to cut costs and dumb-down jobs and 2) the enormous hole in BA's pension pot. The latter may yet scupper the deal while the former will blight it at every step because it is an issue that will only grow as the combined airline will strive for even greater cuts and efficiencies.

On thing is for certain, the worst news is that Willie Walsh has won the top job. It's the equivalent of asking a passenger to fly the plane.

Oh Willie, You're Not So Fine

Oh dear. In a week where the union, Unite, launched a legal action against BA in order to try and stop the imposition of new contracts, the news has just got worse.

Far worse.

BA's results to the end of September showed a £292m loss - far greater than had been predicted by most analysts. Revenue was unsurprisingly down by 13.7% and Willie Walsh, BA's clueless CEO, could only forlornly point to the fact that there is a recession on - a real 'no sh*t Sherlock' moment. Lord Sugar would surely have slapped him about the face for saying so, not least as Ryan Air had only released their figures a week before with excellent profits buoyed by a 40% decrease in fuel costs over the same period.

If that was factored into BA's results as well, it makes these results not just grim but catastrophic.

Confidence in the airline was not helped in the period as Walsh himself was involved in the high profile launch of what many believe to be a 'white elephant' new all-business class service between London's City Airport and New York, carrying just 32 passengers and stopping in Ireland on the way to refuel. Given much of BA's woes have stemmed from a dramatic decline in business class sales on other services, this seemed like either monumental madness or callous hubris in the face of the sacrifices made by staff in a desperate bid to save costs. It just seems a huge waste of money on a service almost certain to make a loss in the short and medium term - if ever - given two previous attempts to have a business class only service went belly up in happier times about a year ago and at least they had more passenger capacity and flew non-stop to their destinations.

I really am stumped over BA's strategy. They continue to just try to reduce costs and do the same thing when the industry has moved on. They are caught between offering premium services but trying to compete at the budget end and are failing at both.

I also find it hard to believe that shareholders grimly keep the faith with a CEO who is so clearly out of his depth, obsessed with using his dwindling funds to buy another struggling airline, Iberian, as his last, desperate and hopeless fling of the dice.

He really needs a strategy that hangs together before he spends so much wasteful money. At this rate he needs to horde as much as he can as BA is going nowhere fast.

What is The Point of Airmiles?

I have over the years, off and on, saved airmiles - the BA focused customer loyalty scheme. I have tens of thousands of the things. Yet, it is only when you actually try to do something with them that you realise they really are pretty useless.

This year I have travelled a lot on BA through work, and the odd bit of leisure. For a while I made a conscious effort to stick with them as I thought travel would be a lot easier through Terminal 5 and I would indeed build up airmiles that might get me to a Silver Card or I could use them on a holiday. I have must admit that I have travelled enough this year to become an expert on every terminal except four and most European airports. I can say that Terminal 5 is pretty good - it's very accessible from the M25 if you can avoid the roadworks, there's plenty of room at setdown, a good carpark and there are reasonable bus routes serving it if you don't mind endless stops. Trains are fine if you are coming from London - other than that, then forget it.

Quite big things let it down. Staff shortage is the first. That is at both security check in and passport control. It's like being a local Budgens - they wait until the queues are so long that people are snaking all over the place and back into the terminal before they even consider opening up a second or third machine and there are always ones not being used. Meanwhile at passport control it's just an ugly mess and a big scrum - in fact, at every terminal. It's a real shame after so much money and effort when into it. Going through any airport in Germany you simply do not get those sorts of queues or daft bottlenecks, there are always plenty of machines or stalls open and loads of staff. The throughput is much faster too and that has nothing to do with the severity of checks, it is simply staff more interested in getting the queues down and more of them.

Enough of those gripes - back to blinking airmiles. I read with some eagerness that BA has opened a direct route to Las Vegas and next year for my brother-in-law's 40th birthday we are going there. The big problem I have found with airmiles is that they are not a real 'currency'. For instance, if you want to upgrade to Club Europe, it's the same airmiles for an hour's trip as a long haul upgrade. Dumb. The second thing is, it's actually quite hard to spend them. We are one of those families who have to grab time when we can and even if we could plan a trip, we would usually buy a package holiday of some sort. So airmiles would be handy for grabbing those trips of whim. But there is fat chance of you getting the dates you want.

It is a Ryan Air approach that says that one type of traveller only gets cheap fares, all others pay accordingly and expensively for their needs. BA airmiles are the same - unless you are flexible to an amazing degree, it's highly unlikely you will get a flight to suit. And this is not just on one occasion - my airmiles have not been spent for nearly 3 years and yet I try regularly to get flights with them.

So Vegas next June sounded ideal. I now had dates a year ahead, could be flexible by about 3 days and I needed hotels too. Wallop. I could possibly get a flight 10 days after the dates needed and then coming back would mean nearly a fortnight stay which was not ideal for a planned 4 night trip. I didn't even get to investigating a hotel.

I then made the mistake of phoning the Executive Club to see if there was a mistake. Nope. No airmiles seats were available for that flight any time around the dates. The phoneperson said that it was a very busy route - so busy it has yet to start flying, I mentioned. Ah, there had been high demand. Right, that's why I could buy the tickets by the bucket load from any website including BA's, I suppose. Ah, said the person, there are only a few airmiles seats allocated to each flight and therefore they sell out early. Given the route has yet to launch and was only just featured in HighLife Magazine, that was pretty quick indeed. In answer to my question, why are the airmiles seats limited to so few, the person said that they had to make a profit.

At this point I did not hold my peace. I asserted that the whole point of a customer loyalty scheme is that customers already have paid for tickets upon which BA accrues a certain amount of profit which is set aside to pay for these future flights. I can see the point of trying to limit them but by making the number so low, and therefore the scheme so inflexible, people like me would get exasperated and therefore think the scheme is valueless. Put simply, if you cannot redeem the airmiles, then they are worthless. Just to make matters worse, when I tried to use them for the same dates on non-direct routes and via partner airlines, the same answer came up.

So out of sheer morbid interest, I looked at several websites and airlines, every one of them was cheaper for direct and indirect routes to Las Vegas. In the end, we looked at two great deals via Air France and Virgin that got us 4 nights at the Bellagio Hotel and the whole package was cheaper than an indirect flight with a BA partner, using mostly airmiles to pay for the flights and having to fly over week later. Just to be clear, as Robert Peston would say, it was more expensive using a customer loyalty program and less flexible than the alternatives, one of which was a direct flight.

I could have commented that BA is losing shed loads of money and it is simply driving customers away as, frankly speaking, if I can avoid BA in the future, I will. The rules on accruing Tier Points are stupid and Virgin does not have such a stupid and complex scheme nor do most other airlines. Finally, all the others, in my experience, fall over backwards to help you spend the loyalty points.

After all, that is the entire point of the scheme. Perhaps it may dawn on BA management that if their loyalty scheme is not incentivising loyalty then they are giving away money for no reason to fund it. However, if they give the profit away in the spirit of customer retention, do not make it difficult to redeem the points.

It's pretty simple really. Vegas here we come - and not via BA.

A Slow, Lingering Death By Cuts

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.

Consumer - Know Your Rights

There is a terrific article on the BBC online Magazine which I refer to. It highlights five consumer laws you should know when buying goods.

With it comes a few horror and good stories from punters. I am sure we can all relate a few stories about buying products and what the article shows is that you need to know your rights.


Travel


I do a lot of travel and the last few months two things have affected me.


1. Eurostar


I took a trip to Paris and that included a meeting in Lille. So I bought a ticket to Paris returning from Lille so I caught the SNCF train to Lille from Gare du Nord which incidentally is an identical train to the Eurostar in every detail. The Eurostar tickets were Business Class, fully flexible and I noted there was no difference in the price of a return ticket from Paris or the halfway point which is Lille - ah, well you pays your money. My meeting at Lille ended slightly earlier than anticipated and I was able to catch an earlier Eurostar that had coincidentally come from Brussels not Paris. The first thing is that there is no special facility at Lille for Business Class like a lounge. Then when I got to my seat on the train there were only 3 other passengers in the carriage and no one came through with a drinks or meal service. Eventually I had to buy some water and ask for some service. A person came through set out the meal table and then did not return.


I complained to Eurostar and it took weeks of wrangling as all they wanted to do was to compensate £30 for the missing meal. However, I argued that the ticket was Business Class and several services were missing which made the ticket missold. Only when I said that I was referring the matter to a solicitor under my rights as a consumer did they act - then suddenly they went over board and sent me a return ticket to either Paris or Brussels, Business Class. I had not asked for that or expected it, but had clearly touched a raw nerve.


2. Air Travel - Budget Airlines


I recently had to travel to Germany and, late as usual, I could not get back to Dusseldorf in time to catch my flight home and so had to make for the nearest airport which happened to be Ryan Air hub at Frankfurt-Hahn airport. It should be noted the 'Frankfurt' title is pretty stretched as it is over 200km from Frankfurt, about as far as Birmingham from London. No matter, it served a purpose. I called to buy a ticket but as I was inside a 4 hour limit to buy either online or by phone (I didn't know such a limit existed), I had to go to the airport to buy the ticket. I was quoted €239 over the phone which I was assured was the all-in price. When I got there, the price was €354 and I had to check a bag in for extra, I had also to pay for automatic check-in which did not work and priority boarding, the total was closer to €400 for a single flight.


It was late by several very sweaty hours and most of the time we had to wait at a packed gate. It went over the 4 hour trigger to get looked after but nobody manned any desks for Ryan Air and we were told to call them when we got back even though there were small families with thirsty children. When I got back I was told that you had to write in as salespeople didn't handle customer support calls and all is done in writing. Naturally I have received no reply.


For budget airlines, there is misconception that it is implied you only pay for what you get. That is not true - all airlines are governed by the same international compensation policy which have clear guidelines - Ryan Air get away with it as no one calls them out on it while they do not have staff focused on dealing with customer problems or complaints. There is a 'like it or lump it' and 'you pay peanuts, what do expect?' policy in action.


Buying A Car


Some years ago I bought a BMW 7 series - why, I don't know. I went into the garage to buy a 5 series and ended up with an exceptional deal on the 7 series that had languished on the showroom floor. It was an odd car - luxurious and annoying at times but very nice to drive. After about 4 months a recall letter came through and the engine management software needed a bug fixed so I booked the car in to have it done. I was expecting to pick it up later that day but got a call - they had done the fix but there was a problem with the transmission or gearbox. They needed it for another day.


4 weeks later and I still did not have my car back. They had put brand new software, put all the settings back to the factory ones, and still the transmission was stuck in 4th gear. They then tried to get me to take a replacement car for a while but I went to the garage to find my car and found it with it's transmission on the floor beside it, laid out like animal entrails. I turned to the manager and said I wasn't going to have that car back - it was clearly not going anywhere fast let alone back to me. It was not fit for purpose, i.e. driving.


There was long exchange of letters, some help from the Citizens Advice Bureau and a solicitor. In order to stop adverse publicity and have the law poking around, the garage agreed to replace the car with a new one and said I could have any BMW to the same value. I went for the 645i and applied the same discount which sent them into fits as they could sell those quickly. After some wrangles and legal threats, they agreed and I got my new car.


The key factors here were that the car was less than 6 months old and was effectively 'not fit for purpose' in that I couldn't drive it and they had changed the transmission once and could not get it to go. The law was in my favour within that 6 months period. The second thing was that it was the garage, not BMW who had to remedy it. In fact, BMW did not want to know and made it absolutely clear to me, in very legal terms, that they were not responsible for selling me a car not fit for purpose even though it bore their name and they manufactured it. It was entirely the dealer's responsibility.


Finally, it does not matter how big or expensive the item is, if it is not 'fit for purpose' you have six months to exercise your rights and demand your money back or a new product - your choice.


Buying on the Internet


I recently bought a new computer for my business on my credit card - it was with PC World Business. When it arrived, after a few goes, the power block failed. I phoned Sony as PC World said it was a warranty issue. Sony said they would send a new power block to see it it fixed the problem. Clearly this was my work PC, and so I exercised my right to reject it under the 7 days cooling off period you have for any goods or service bought on the internet.


In praise of PCWB, they were excellent and made no quibbles. They took the product back, collecting and delivering the new one of my choice at the same time at no extra cost and credited the full amount on my card within two weeks (with a bit of prompting).

PCWB are a good company - there was never any question of taking the product back for a full refund and the service was superb. I didn't replace it with another Sony, I bought Lenovo instead and it is excellent.

The Glamour of International Travel

As I sit in alone in a small room in Barcelona, where I have somehow damaged the airconditioning switch so that I am inside a medium sized refrigerator when the outdoor temperature is 25 degrees, I am once again pondering what's good about international travel.

A young American lady sitting across the aisle on the plane over told me that she was spending 4 months in Spain and was looking forward to it. I agreed - it was a great adventure. She asked me how long I would be in Spain and I replied one night. After a day in meetings, I was to spend a night in the hotel and then another morning of meetings, then plane home. I must have done this a hundred times in the last year, it seems, and I cannot remember the last time I actually kicked back and had a moment to myself to enjoy some of the spectacular cities I have visited, from Rome to Stockholm to the inside of Copenhagen airport only. I lie. Now that I think of it, I did manage a trip around the harbour of Hamburg in an open top boat, breathing diesel fumes, sun beating on my head and sweating profusely in a suit. I saw several scrap heaps, empty dry docks and Roman Abramovich's new yacht covered in plastic - and all the while I kept glancing at my watch worrying that I would be late for my meeting.

The day had not started well. Due to travel costs, the cheapest flight got me to Barcelona just 40 minutes before my meeting, cutting it all very fine. The plane was packed so full that there was nowhere near enough room in the departure lounge, let alone on the aircraft, for us all to comfortably sit. It was fashionably, but bloody annoyingly late - by well over an hour and so my slim margin of error was already burnt away before I started, causing one of those stupidly fractious journeys where I felt like going onto the flight deck and telling the pilot to put his foot down. How he would have laughed and either shot me as a terrorist or pointed to the throttle as being a lever not a pedal.

In the cost consious era of business travel, I found myself in the section called 'Basic' as classified by Iberia Airways - a euphemism for 'abattoir class'. This is a level that makes Ryan Air look like the Orient Express. A mere tomato juice cost €2.50, rivalling any of O'Leary's rip offs. The good news was that they do not charge extra for check in, bags, jetways or fast queuing - just get to the front and stand up quickly. And you get a real seat allocated to you beforehand. That made the return flight to Barcelona exactly half what I paid for a recent Ryan Air one way trip from Frankfurt-Hahn airport to Stansted. Oh yes, believe me - Ryan Air advertise cheap flights but I paid, with check in, priority boarding and one tiny bag in the hold, exactly double the price to go for a flight double the distance to Barcelona, both ways. One other, nit-picking point - Frankfurt-Hahn airport is around 200km from Frankfurt, and is a god forsaken hell-hole infested by more flies than a festival of rancid horse manure. Granted it was hot but even I couldn't see the waitress in the small cafe for the fog of flies in the room. Some of us think London Luton is stretching the imagination, but this is like calling Birmingham Airport a London airport.

Whenever I mention what I do or where I go, it always sounds good that I have been to Germany last week and Spain this week etc. But when you sit like 'Billy Nomates' alone catching up on the day's emails and messages with a motley room service sandwich half eaten at your side and only two channels with English on and both are boring business news running the same endless loop, it really is not as glamourous as it sounds.

Tomorrow is 28 degrees in Barcelona - I am only hoping the office I visit has good ventilation or else it will be another day in a sticky shirt, preying for a shower. Hands up all those who know what I'm talking about.

No Flying Sandwiches

It is a dark day when BA announces that it is banishing the free meal from its short haul flights.

I use the term 'meal' loosely as I am referring to the dreaded BA sandwich. I mean, it wasn't as if it was gourmet fare anyway but to take away perhaps the last bastion of differentiation between the national carrier and low-cost, no frills airlines is close to rock bottom. It seems also to be the limit of the creative thinking of an increasingly beleaguered CEO, Willie Walsh.

True, by banishing the rather poor sandwich and chocolate tit bit from flights after 10.00am (fear not, breakfast on flights before 10.00am remain reassuringly unaffected by this callous measure) that last less than two and a half hours saves the struggling airline £22m which cannot be overlooked. However, when passengers start making comparisons with other or low-cost airlines you have to start thinking, what is the difference?

I have to say I am no fan of Ryan Air. Until recently, you had to queue endlessly at Stansted in order to get checked in but they have now introduced online and electronic check in at the airport. Somewhat strangely, but typical of Ryan Air, you pay for the privilege of checking yourself in. In fact, you pay for everything. By the time you have added the whole thing up, if the bare fare was not as low as £3.99 then you may as well book a flat fare with BA.

You think I'm kidding? No way.

If you travel with a bag to check in and particularly if the bag carries more than a toiletry bag and a few items to wear, then you are looking at excess baggage charges which themselves are excessive. You can easily start paying Ryan Air some distance over a BA airfare. When you start adding in the fact in most cases you get rained on when walking to the aircraft because they are too stingy to afford renting jetways and that you cannot get the seat you want unless you pay more for the most idiotic and useless 'priority boarding' system which is policed by nobody, then you start to realise why O'Leary and his shareholders are making such excellent profits.

The trick for low-cost airlines is simple volume. There is no point in buying and flying expensive aircraft if you cannot utilise them to the full. So each plane is flown as many times a day as it can fit in, so the shorter the distance of the flight, the better. And it is turned around as fast as it can at each destination while the number of seats occupied each flight should be as high as possible, which is where the price gimmickry comes from. It is a recipe for over crowded planes and low service levels but 67m will fly Ryan Air alone this year which is 15% up from last year. And they are not alone with Easyjet in hot pursuit.

The key to success is the explosion of routes. Between Easyjet and Ryan Air, the number of interesting new places to visit has grown enormously over the last 10 years. We may laugh that we often get our imaginations stretched as to what constitutes a flight to Stockholm or Brussels but by and large the routes are superb. Take flying to Valencia as an example. It is one of the largest cities in Spain, just 100km from the northern edges of 'Britville' holidays, it hosts some of the biggest conferences in Europe, the Americas Cup in 2007 and in a few weeks time it will host the F1 Grand Prix of Europe on a superb street circuit - it is also home to one of the best football teams in Europe. Try flying there by either BA or its partner, Iberia, and you are looking at a two flight hop costing a minimum of £700. Or you can choose a direct flight with either Easyjet or Ryan Air. Even when you get to the low-cost airlines, choice is crucial. Easyjet was almost twice the cost of Ryan Air, and it only flies once a day to the destination. Ryan Air won hands down.

This year, as a supporter of London Wasps rugby club, I hope to take in at least one of their away European games. I have been to Paris, Biarritz and Treviso to support them in the past but they have also played at several southern French and northern Italian towns only accessible by low cost airlines. Then there are the people who either buy or rent holiday homes - imagine the ability to simply hop for a long weekend to a home near Perpignan?

And there is the business element. With premium cabins like Club Europe faltering, I cannot think why I would choose BA to fly short haul these days. Luton Airport is just 25 minutes up the road from me, the parking is cheaper and the terminal is fine. Easyjet and Ryan Air fly regularly to Paris, Dublin, Edinburgh, Glasgow, Aberdeen, Manchester and Amsterdam as well as a variety of other major cities combining convenience and low-cost for the business traveller, particularly if you are away only a short time. Stansted is not bad either - apart from places like Valencia, it was my only access point to fly to Montpelier when working for a company with an HQ down there previously. Heathrow, for anyone north of London is almost inaccessible with the M25 widening roadworks set to be with us for the next 3 years (yes, I am serious) and then short term parking is so costly and far away from the terminals to render the whole process a nightmare.

The formula for budget airlines may indeed be spartan but you have to admit they have seriously taken BA to task. The stuffy, backward airline pinned so much of its hopes on Terminal 5 only to see all the access it has built to the terminal bottlenecked by a seriously congested motorway network. And then, what the hell happened to the airconditioning at Terminal 5? It is is built with so much glass that it's like a greenhouse whenever there is more than a few rays of sun, making the whole travel experience a rather unpleasantly sticky affair. Also, knowing what we now know about airport security and the time, hassle and inconvenience it adds to a journey, why on earth did they plan the entrance into the airside area of the new terminal so badly? I am even leaving out the most disastrous piece of project management I have witnessed in a while when they actually commissioned the new terminal.

Yet on soldiers Willie Walsh. I don't know what photos he has of Board members and big shareholders, but they must be pretty compromising for him to still be in a job. He has happily presided over the most incredible swing of profitability to major loss in a single year that has been seen in the UK. In that time, all the major and minor flaws of the airline have been exposed and rather than making a huge shift in strategy and tactics at the airline, we are seeing it respond by imploring its staff to take salary holidays and axing the meagre meals on short haul flights. In small business terms, this is the equivalent of not buying fresh flowers once a week for reception or axing the monthly staff pizzas - both of which I have personally done in response to poor performance and in both cases I saw a disproportionate drop in staff morale and a decrease in my managerial credibility as a result.

Willie Walsh has a further problem. Getting rid of the monthly pizzas for me got me bad press within my company - for Walsh, this is national news. Many years ago as a trainee salesperson at Hewlett-Packard, the free biscuits for staff were rescinded as part of a global cost cutting measure. You may as well have asked staff to take a pay cut or axe the annual staff bonus - it was taken that seriously internally. But Walsh's actions are public and customer facing. Taking away the motley sandwich was part of the service and cost of a ticket. By saving £22m publicly he is not taking the same amount of the price of tickets. He is also announcing that the cost of the sandwich was trivial compared to the price of the ticket as £22m spread across each ticket sold is pennies.

We were paying a premium for this particular sandwich, and now Willie Walsh has told us just how much of premium.

And that had been BA's flawed business model for some time. Without the profit at the front of spaces on the aircrafts, as premium passengers watch the pennies in these troubled times, the whole business of flying anybody from A to B becomes loss making to an airline like BA with such a massive cost base.

Cutting a measly sandwich is one of the few responses to the crisis of an idealess CEO. It also sends the worst possible message to its customers - "We were ripping you off for the cost of a sandwich".

BA needs far more than this to be a credible force of the future. Once, it dominated the landing slots in the UK and so stifled competition by being big. Virgin chipped away at that and brought innovation and service as well as price competition to BA at its two main hubs. Then the budget airlines came from left field. Instead of competing for slots at the national hubs, they picked off the subsidiary airports who were hungry to compete with Heathrow and Gatwick and there was no shortage of investment to support this - and certainly no shortage of customers to justify it.

In fairness to Walsh, the rot set in on BA a long time ago - and was compounded when they capitulated their own low-cost airline, Go, to Easyjet. But his woeful performance under pressure has contributed badly to the past mistakes and could possibly see BA lose its national carrier status in the not too distant future.

It will take a great deal more than losing a sandwich to make a difference at BA and far more focus will go on how they properly spend the extra £600m of cash they have recently raised. I would wager it will be the making or breaking of Willie Walsh in short order and, frankly, on his performance so far, I don't give him a chance.

A Few Honest Words

'A few honest words were spoken,' said John Smits, the South African Rugby Captain when asked about his side's second half performance to beat the British & Irish Lions in the 2nd Test at Loftus Versfeld, Pretoria recently.

He was referring to what his team did at half time when they had been comprehensively taken apart by a stunning Lions performance in the first half. They sat down and talked honestly to one another about their performances. For all the training and experience these guys had in winning the World Cup together, they changed their game profoundly by doing just doing a simple thing like talking to come back and win the game. Egos were forgotten. There were no prima donnas there despite the roll call of famous names - they collectively and individually took the criticism and made a commitment to one another to put it right. The results were spectacular.

That's what makes good teams become great - the ability to analyse themselves honestly and collectively agree to put it right. Smits had captained his side on no less than 56 occasions previously and he did not need to berate them - they knew that they had let themselves and their team down.

Fast forward to England's cricket team who pulled off an amazing draw in the First Ashes Test at Sofia Gardens, Cardiff last week and everyone is pussy-footing around the likes of Kevin Pietersen and Andrew Strauss. You can imagine what was being said - but for one bad shot KP would have scored a 100 while Strauss unlucky despite being guilty of a poor shot and poor captaincy. They will not change anything - they will just play the same and likely get beaten by an ordinary Australian side, not a patch on the 'Incredibles' of 2005.

From Sports To Business

It's a common held belief that charismatic, bigger than life characters lead businesses best. The most prolific companies, in our eyes, are those led by people who are household names, like Virgin or Ryan Air. If you read Jim Collins' book which maps out those companies that sustain greatness from being good, then you will see that often it is the most understated leaders who make companies truly great - and they are not afraid to have superb people around them. While Ryan Air debates whether it should have standing passengers and just stools to strap onto for landing in order to cram more people in with scant regard for comfort or safety perhaps their minds should be turning more to how they can make air travel more green and safe as record numbers of planes fall out of the sky this year.

'A few honest words..'.

It seems a simple remedy but regardless of who the people are in the team, no matter how experienced, no matter how good they think they are, no matter what their past deeds have been, if they cannot face honest words from others then they will ultimately walk into a failure.

Recent History

I would say that when the dust settles on what has been the most tumultuous times in business since The Depression, there will be many leaders who will finally limp out from their cowering positions hoping the worst is passed. These are the people who could not face honest words or straight facts and ran their companies into disastrous positions and then handed the whole lot to cost cutters to try and rescue the business. Many leaders cannot take criticism from their peers and certainly not from their staff - they see it as an affront but most have that unshakable belief that only they know best.

These are the people who walked their businesses into the mess. Take a look at Willie Walsh at BA. He has presided over a business that has gone from record profits to record losses in a single year. Yet common sense would say that premium customers would desert the business if there was a recession - no more Vodafone middle managers cramming Club Europe for one hour hops to Dusseldorf or Accenture Consultants going First Class to the US for a one hour meeting. The problem with BA was that their whole business was propped up by the profit they made at the front of the plane. When that diminished, they had no contingency plan to adjust the business as the low price airlines cut them to pieces. And here's the really stupid factor - they actually INCREASED their prices through the crisis and instigated more rigid rules about changing flights, taking away vital flexibility for travelling business people. Immediately, people like myself, swapped allegiance to other airlines and travelled with those who had the most flexible policy for the price - and I found it was just about every other airline.

'A few honest words.....'.

Leadership And Honesty

We talk a lot about honesty, particularly when it comes to Political leadership where there seems to be so little these days, yet we cling to their every word and believe most of the claptrap they come out with. Very few at the top accept the opinion of others unless it has a bearing on their popularity. Gordon Brown, as a for instance, truly believes he is an economic genius despite the disastrous outcome of his policies and he's hell-bent on repeating the mistakes of the past even before we have cleared the current crisis.

When you look at the facts about the wars we are fighting, as we tackle two separate and major engagements we are actively subtracting from our military resources and axing regiments, while we now know that not only equipment was woefully inadequate for the kind of warfare our troops faced, we now have to borrow helicopters from our allies.

A few honest words......

In business, it is absolutely critical to be able to engage with leadership and discuss ideas and thoughts. Specifically, in times of crisis, the last thing that firms should be doing is ignoring what its own employees know and can do rather than just cutting them to pieces - particularly when it was the leadership that led the company into the state it is in. Communication and the ability to talk openly and honestly to management at all levels is critical in all businesses.

What this recession has exposed is a layer of poor managers in business who rarely engage with their workforce and even more rarely take honest criticism and advice. We have also seen the role of the non-executive director being exposed for what it is. It seems to be a circuit of jollies for a preciously small band who butterfly-hop from firm to firm earning fat fees but having zero responsibility. It is time that Governance in companies was taken far more seriously and this needs to be a source of 'Honest words' into the executives that run companies.

British business and politics has a lot to learn from this crisis and we all need to take the opportunity it has provided us with. Honest words need to be spoken in business and leaders need to understand that they have a duty of diligence in their risk taking to their employees so it is as well to be more open and honest with them in the future.

It will take a long time to restore the reputation of British business - a lot longer to restore the reputations of the list of failed leaders.

Is Ryan Air In Dreamworld?

Low cost airlines like Ryan Air have done a lot to broaden our travel habits - and that's a good thing. But, boy, can they be bad, bad people when they want to be.

Although my first experience of what Ryan Air loosely called 'Stockholm Airport' was irksome - we landed at an old Air Force base some 100km from the outskirts of Stockholm and the lady picking me up was furious as she had travelled for ages to get there. The way back was even better - a bus from Central Station was the only way to get there. It cost a fair bit and there was only one bus, so passengers, luggage and whatever clogged all the seats and the aisle to bursting point and still left stranded passengers at the Station who never made it to the flight. Incredibly, not one of them got their money back.

We all know about the madcap plans to charge a) for using the toilet and b) by weight of passenger, but here is something even more loony and irrational.

We are flying to Valencia with some friends in a short time. They are a couple with a small child under 2. They booked their flights via Ryan Air today and got the adult seats for £17.99 each one way and £7.99 on the way back - sounds great. In a bizarre twist, the price for the small child, under 2, weighing little more than a feather, is £20 each way - more expensive than any of the adult seats.

Here's the rub - when on board, the air staff will insist that the child is seated on an adult's lap and strapped in. The more expensive fair for a young child does not even buy a seat - it actually subsidises one for another adult.

Micheal O'Leary says it's all about choice. That has little to do with choice, that is deliberate prejudice and discrimination against passengers with a young child. Ryan Air has form on picking on specific groups as we know if you are disabled or need assistance in anyway. They see disability and young kids as profit opportunities. That the child fare does not even buy a seat despite being more expensive than an adult seat is just outrageous.

Blinding With Science

Stelios and O'Leary always answer any criticism with elaborate mumbo-jumbo about load capacities and demand but the reality is that every seat on the flight is equal and there are no compartments for other classes. Getting on is largely on a first come, first served basis. So there is absolutely NO EXCUSE for charging more on the same flight for a child under 2 who does not even get a seat.

Let me run that by you one more time - NO EXCUSE. Some fancy lawyer will no doubt select the right part of law that governs the rights of the consumer, the individual, the human even if they are under the age of 2, but in my book it is outright discrimination and profiteering.

'Ryan Air, the low cost airline' should be replaced by 'Ryan Air, the high profit airline'.

Flying By The Pound

Fast on the back of ‘Whacky’ O’Leary’s proposal to charge Ryan Air customers for using the toilet, he is now considering charging passengers by their weight.

‘Don’t blame him, blame his customers’, is the message as this suggestion was put forward by 29% of the passengers who took part in an online survey organised by Ryan Air. Quite apart from the obvious ramifications legally about discrimination or human rights, there is also an implication of how this would be fairly implemented as surely height or age would have to taken into consideration.

However, I have yet to think all the possibilities through but there could be a way to mitigate charges. If a large person were charged heftily due to their weight, they might then invest some of their money in using the toilet facilities and then claim a refund as they weigh less after. In fact, if they were to use purgatives or induce sickness, then they could probably easily offset the toilet charge and get a good refund on arrival at the other end.

Conversely, for those who choose to drink excessively or eat on the plane, could they not be further charged, in addition to the costs of food and drink, for the additional weight they put on?
I have already registered a company which will trade in ‘Weight Offsets’ which will allow weight-challenged people to buy offsets and credits off less weight-challenged people and redeem them as vouchers to Ryan Air. It is already rumoured that there will be a Futures Market opened up on this which will be trading in actual weights vs forecast as, if someone buys a ticket in advance and weighs a particular weight, when they get to the check-in they may actually weigh more or less than the ticket they bought says. This way city traders can actually make a fortune gambling on the differences with all sorts of derivative products to trade ‘packages of weight’ and shorting those who are on diets but cheating, even 'spread betting' has a new meaning.

The possibilities are endless – particularly when Whacky O’Leary and his Ryan Air gurus are around.

Spend A Penny?

It had to happen - Ryan Air are considering charging for using the toilet on their flights.

Today, I bring you an exclusive interview from the marketing genius behind the idea, Penny Pertwee.

Rising Cost Of Service

I asked Miss Pertwee (with a silent 't') what gave Ryan Air the idea to charge for using the toilets on their flight.

"Well, to be sure," she said, "We have charged for most things now and are limiting the hand baggage to just 10 Kg so that you are forced to put some luggage in the hold as you would be hard pushed to put two rats in a bag and weigh less than 10 kg. Then we can charge the customer for the luggage in the hold per kg over the maximum allowable which will change to a much lower number for sure soon."

I pointed out that this makes Ryan Air in danger if actually being far more expensive and less attractive to travel on then their rivals.

"Be gone with yer," she replied with a disarming smile and a twinkle in her eyes. "With the height and weight restrictions coming in soon, Ryan Air will always be the cheapest airline if you are 5 foot dwarf weighing less than 25 kg, with a 10 kg bag, no luggage and not needing the toilet, food or water. We are committed to providing that level of service for those sorts of people."

What about the plan to charge for using the toilet then?

"Well the cost of allowing passengers to walk up the aisle to the toilets is rising," she said. "Particularly as we plan to remove the carpets in the aisle and install small seats for travelling rodents or other pets at a small charge. Also there is an impact on the environment, as if you have been to the toilet before the flight then you will weigh less when you get on and so the plane will use less fuel particularly at take off which is easier on the environment."

Spending A Penny?

How much will the service cost and how will it be charged for, I asked?

"We had quite a time working out the charging levels and how to charge," she said. "You know some big people can, let's say, need more of the facilities than smaller folk, so the charging needs to be a balance between the most fair charge and the most lucrative for the airline. So we have come up with a unique 'menu' of charges.

"A standard No. 1 of up to 30cl is just €1. For between 30 to 50cl it is €1.50 and then it's €3 for above 50cl and Guinness drinkers. The way it works is that you take a measuring cup inside the toilet with you, and once you have finished you pour the contents into the measuring machine we have fitted in the toilet and the amount rings up on the convenience lights outside so the steward or stewardess can read it and charge you on the way out. If you do a No. 2 then the toilet is fitted with a patented 'guffometer' which measures odour - the charges vary depending on weight and odour but suffice to say a standard poo will cost around €2 and if have had a curry then it will be €5 minimum. For those who 'paid a penny and only farted' then it's just €0.50, the same if you want to just 'powder your nose' which is just a euphemism for a good fart. By the way, we determine the weight by having the person stand on the weighing scale before they enter the toilet and then when they come out - the convenience display shows the staff the combination of weight and odour to charge for, and toilet paper can be bought on the drinks trolley at roughly €1 per poo or other."

The Screaming Habdabs?

I pointed out that what if someone is ill or incontinent? Surely this system of charging penalises those sorts of people?

"Come now," she said reproachfully. "As you well know, if you are disabled and need a wheelchair, then you have to pay. That's the rules and it's only fair. Just the same as, if you choose to get on a Ryan Air flight needing the toilet that's your lookout - and for those who are ill, we are a cheap airline not a flying toilet. If you are ill, then don't fly with us - it's you choice."

I asked, what about children - shouldn't they be able to use the facilities for free?

"Now why would we do that?" asked Miss Pertwee. "They occupy space on the flight, they breath the valuable oxygen in the cabin and they can pee and poo as good as anyone and they spend time in the toilet which limits the time for others to use them. No, they are charged just the same. And before you ask about nappy changing facilities, that counts the same as a good fart."

The Way Of The Future

I asked if Ryan Air plan any further charges in the future?

"God, we have only just started," she shrieked noisily. "We plan to charge in the near future for using a pilot and then for the level of their ability to fly. We also plan to charge for looking out of the windows, the seats (as we plan to suspend normal passengers from the ceiling for the flights, you can pay extra for a seat), we plan to charge for a proper landing not one at high speed with a thwack which is the usual, and then we will charge for cabin oxygen, heat, lighting and the air displaced during the plane's journey. We are working on other charges and they involve charging for safety demonstrations, life jackets and using the emergency exit in case of an emergency.

"At Ryan Air we are committed to low cost travel so long as you are below 5 foot, weigh less than 25 kg, have 10 kg hand luggage, no bags in the hold, do not use the toilet, want to eat or drink, can hold your breath, don't look out the window, don't mind if a trainee flies the plane and don't use the emergency equipment if we should crash."

Taking The P***

The above interview is clearly a spoof and is not representative of Ryan Air's views.

However, Ryan Air's intent to charge for using the facilities on their flights is. If, like me, you have used Ryan Air and their idea of carting people safely from A to B, then you will know that between their pathetic check in facilities and obsession for charging for the most popular basic requirements for anyone wanting to travel any distance, then they are just trying to advertise low cost fares and charge you for anything you would normally need. It's a carrot to draw you in and then sting you for the obvious.

This is quite literally 'Taking the P***' and they know it.