Death Wish?

The second planned strike by Unite has gone ahead and BA reckon that 75% of their scheduled flights will go ahead.

The two statements within that one sentence should be the most terrible things a world class airline could possibly imagine but for Willie Walsh, the CEO of what was once 'The World's Favourite Airline', it seems to be music. He has been described recently as being 'macho' in the face of an unreasonable Union but the reality is that the fight with Unite over changes to Cabin Staff contracts is only one area of failure amidst a whole plethora for the CEO. In fact, about a year before the recession, he was voted one of the Executives of the Decade, right now he is about the biggest chump. Having lost the hearts and minds of some of the best and most loyal staff a business could have, it seems that the Board of BA are 100% behind his absurd actions but this cannot be good for shareholders.

In the grip of the first strike, I had to travel to Germany. Our agency got quotes for the required travel times and BA came out at £800 for the planned journey vs Lufthansa's £237 - standard economy fares on a standard route. OK, so that was in the middle of the strike, but last week I flew to Milan and Lufthansa again came in at around £325 to the similar flight of BA's at over £700.

All along, it has never been about the cost cutting for me - it's been Walsh' abject lack of strategy and business acumen. How can you have a business that is going to succeed when it is charging such prices at recessionary times against its main rivals? Lufthansa is cleaning up - full planes each trip, efficiently run, on time and with decent service with real technological advantages like Boarding Cards via SMS. BA is lost in the wilderness between premium class and low cost. So what does it do with the cash injection it got? It buys the second largest loss making airline in Europe, Iberia, who is similarly placed and tries to combine them. Iberia is perhaps worse off - all its old premium roots into Malaga, Valencia and other cities are dominated by low cost airlines who fly customers in waves - supposedly cheaper - for no frills. BA inherits few new profitable roots, a heavy cost based business and a management equally defunct of ideas from an airline that does not yet lose as much money as BA.

But that's not all - less than a year after two decent airlines flying all business class service to New York went bust (and both were excellent), BA launches one from City Airport which flies just 32 people via Shannon for around £5,000 each. The target customers are City Bankers, the most hated part of society since the recession and credit crunch - Walsh could not have made a bigger PR and business blunder.

Yet he survives. The lack of strategy is almost childlike, the tackling of Unite is pathetic. You can feel it happening again as the whizz kids at Royal Mail found out when capitulating to the Unions for a cost much higher than originally asked for, that modern businesses cannot take prolonged industrial actions and Walsh will have to relent or let his business die. Why would you do that?

BA is basically ruined. It will never rise again to be the airline it was but maybe the world wants something different. The trust and belief that the loyal staff had prior to all this has been ruptured and will never be regained. Walsh has put a sword through the heart of what was one of Britain's best companies.

It takes some skill to be that incompetent; to make a once loyal and much loved staff strike to kill their own company. When BA was the world's favourite airline, it was all about the staff.

He simply does not get it, does he?

Hollow Victory

On the face of it, BA bloodied the nose of Unite union yesterday in the court ruling on the validity of the staff ballot to strike, making the planned 12 day stoppage over Christmas illegal.

While that may save Christmas for many BA passengers who had booked up with the airline, it is a hollow victory for the management. The staff had voted 9 to 1, that's 92%, in favour of strike action. BA's staff is overwhelmingly dissatisfied with its management to the extent it has taken the unusual step to strike. The warning bells are there that BA's tactic may seem like a victory in a battle but the war-proper has only now begun.

The union has quickly struck back to say they will re-ballot and put the case once again, properly, to the staff and now BA has the longer term uncertainty of when the real strike will begin. For BA passengers, there is now a hiatus and uncertainty - who would bother booking up new flights with BA when they don't know when the strike will be?

In fact, an argument could have been that at least management knew when the strike would be and they so could act to contain the damage - indeed, it could have worked the emotional blackmail of stranded passengers and disrupted Christmas's for many people to its advantage. But no, it just had to take a swipe at the union. In doing, so they have once again bashed the face of the staff who are so incensed at the company's actions that they were willing to kill Christmas for many customers.

BA don't get it - the staff are furious and want a compromise. BA just seems hell bent on killing its own business. As Robert Peston points out on his blog today, there are many serious issues which BA faces, not least that the hole in its pension fund is now valued higher than the worth of the company - and so it focuses on disenchanting its staff and compromising its revenue stream. They could not be in a worse place as they attempt to buy and integrate another failed airline, Iberian.

I have said it before and will bore you with it again - this is a management in no-man's land. It is killing its own business and seems to think that is a good thing. Change at the top is very urgently needed instead of the dreamer who runs it now.

Working Nine To One

Willie Walsh, CEO of BA, is a perennial target of mine but, in fairness, he makes that easy.

I have described BA as a strategically lost company before and there has never been a worse moment for what was once the 'World's Favourite Airline'. It is being squeezed by low budget airlines at one end who consistently out perform expectations in terms of profit and by higher service airlines at the other end who focus on their niche market and make enough to survive. BA's two major 'strategic' moves in the last year have been to make a series of reactionary, 'knee jerk' slashes of its costs, with no real impact or direction, and then make arguably its biggest blunder, to buy another airline in the same strategic 'no man's land', Iberian.

In all of this, the backbone of the company has stuck with Walsh until yesterday when the staff who man the airlines voted nine to one in favour of a strike action, to leave the course of action in the hands of the union, Unite. Walsh seemed to suicidally want to fight his staff, having asked them to make sacrifice after sacrifice to the point when they finally made their stand over the 'dumbing down' of their roles. The company now faces a 12 day period of strike action over one of the busiest travel times of the year - Christmas. It could not have been a worse result for BA - it could not have been a more stupid move by management.

The recent BA history is a litany of business cock ups. Terminal 5's opening was about as inspiring as it got as a superb terminal was project managed in a schoolboy fashion, stress testing the unprepared systems with hordes of real passengers. Then we had the series of staff cost cuts that played with the fantastic loyalty of the staff only to shaft them by trashing their worth in the latest move. In between were two attempts to buy a dying airline in Spain, the first ending in farce as BA's market worth fell below that of their target at the crucial moment, and the launch of a business class only airline out of the City Airport with a capacity of just 32 seats which pandered to the whims of rich bankers when two similar services to the US had failed less than a year earlier.

The message in that service alone could not have been worse to staff, the shareholders and the public - BA was prepared to service rich bankers ahead of paying its staff with a service already proven to be unprofitable by two other companies.

I don't know what the shareholders think of Walsh as they seem to support him grimly, but we now know what the stakeholders think. The once highly vaunted air crews of the once great airline have voted categorically to fight him - and you know instinctively that he has lost his best weapon to survive because he has undervalued and disrespected it.

It's not as if you could not see this coming. It has been a quick process of losing the confidence of the staff and laying a scene for the battle. Walsh calls the action of the union 'cynical' but that's what you get when you lose the support of your staff. From a union's point of view there is no point striking when the airline does not fly - their tactics are generally to hit you were it hurts most as it quickly sparks negotiation, at a battlefield very much with the terrain in their favour. There are no surprises that this is exactly what has happened and it was about as obvious as the cock up at Terminal 5 as it all unravelled.

BA seems to be managed by fools. The strike action is not at all helpful. We can see the Royal Mail happening all over again with the one tragic ingredient for Walsh - the customers do have a choice. There are other airlines to fly - in fact, to Walsh's edification, the skies and airports are full of them. His strategic plan has been a series of schoolboy responses to a business game exercise.

I would say that BA needs a rapid change at the top to survive.

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.

Free Willie

Oh will someone put poor Willie Walsh out of his misery.

I blogged last month about an article in BA's HighLife magazine about how videoconferencing was 'perceived' by users as not to replace the benefits of flying to meetings. It was a piece of wanton propaganda as clearly they had taken slim evidence from middle managers and not looked at the issue from the point of view of the recession, the cost, high management's viewpoint about extensive unnecessary travel within their companies and the environmental issues. It basically said that videoconferencing and the like did not replace business travel - a sweeping statement.

Poor Willie - after just launching a new Business Class-only service for a £5,300 flexible round trip from London City Airport to New York on which only 32 people can travel, he asserts business people only fly because they have to. That much may be true, but if they have to travel, what on earth would compel them to take such a flight, at such a cost when it has to stop at Shannon on the way as it cannot get off the ground with a full load of fuel to make the full trip? I would argue, that long before a businessman would consider such a trip, they would have exhausted the far cheaper options out of the main airports by all other airlines, assuming that videoconferencing does not cut the mustard for their purposes at the start.

It seems he misses his own point. Such a service is pure luxury and the domain of the super rich firms who have no regard for money - like City banks. While we may bleat about bonuses, the range of travel options to such elite are ultra-luxurious whether they lose money or make it, good times or bad. That service really is only for the too-rich and stupid. The fact it uses Concorde's old flight number is a terrible lack of knowledge as to why Concorde was meant to be effective - it got there faster than anything else. This service arrives after normal ones.

Two major attempts in the last few years to tackle the Business Class-only market failed dismally at a time when there was more money around. This really is a dreadful use of BA's valuable resources at a time when staff are being squeezed for every penny of saving and customers are having parts of the offering withdrawn and being sold back to them at premiums.

Willie really is not doing a good job for his airline.

From BAd To Worse

It seems not a day goes by without another tale of woe from BA and I have blogged before about an airline that is dying a death of a thousand cuts.

It turns out I was wrong - it's around 1,700 cuts, of jobs that is plus a pay freeze. Well that's just the latest round. Further, this is just a week after BA launched an ill-fated new Business Class only service to New York from City Airport when two such airlines operating similar models have gone bust inside the last 12 months. Despite CEO Willie Walsh claiming that this service would be profitable in a year, all indications are that it was dead before it took off. In the launch interview he even claimed BA was on the verge of buying another airline that is slowly dying, Iberia. I have said it before but I think Walsh is BA's problem - he just seems to lurch, punch drunk from one bad idea to the next and just does not seem to have in his mind a cogent strategy for survival. And that is the key here - after a £401m loss last year, the biggest since it privatised in 1987, BA will announce another loss this quarter and it is battling for survival. In many respects, an ill-starred takeover of another ailing airline is about the worst way to spend precious cash.

But Walsh soldiers on. Amidst several petty ways to save cash he is now taking on the Unions in promoting the idea that many staff should take early retirement or voluntary redundancy. There is also an issue over the roll of cabin crew for the future where the proposal is to drastically change the current roles, slashing their status and pay and bringing on new recruits at rock bottom prices. The staff are up in arms as, rightly, the former 'World's favourite Airline' had a good reputation on service and that's what kept customers loyal. But it seems that BA is losing itself in a 'Neverland' as it is caught in the vanilla whirlpool of budget airline menu-style services and high quality class service that customers pay a lot of money for. BA is a strategic dead duck and that flows right the way to the top. The final straw could be a strike of any sort - a prolonged one would almost certainly bring a failing airline to its knees.

Central to BA's woes has been the depletion of the higher class cabins as customers book more economy flights in the face of a recession. The passenger figures in that category are 13% down year on year and falling. Despite several silly offers to get people to upgrade by offering a free ticket when buying Club of First Class, or if you buy at economy ticket you are offered to buy an upgrade on one or more legs for idiotic prices considering you have usually just paid over the odds for a higher priced ticket anyway, BA has not stopped the exodus from the higher class seats. This means that these seats at the front of the airline are going empty.

But BA have several other problems, to my mind. The first is a silly rigidity about changing tickets once bought. If you arrive for a flight early and want to see if you can get on an earlier flight, BA, unless you have paid stupid money for a fully flexible ticket, do not allow such a useful thing. It means that seats go empty on the early flight but had they been filled, the later flight would have empty seats which BA would then have time to sell. And at any price, as it would be incremental money. Not so with BA (many airlines suffer from this dumb logic). They actually try to charge more for these newly freed up seats and so they remain empty whereas simple logic would say as long as you are covering the cost of the meal and and the fuel, you are making some money rather than cutting off your nose to spite your face.

Further, it remains to be seen whether Walsh and his management team understand where the future lies for BA. You can cut costs easily in a business like that without thinking hard and the biggest issue will be the Unions. Given that you think that you can handle the Unions, what is it you want to the airline to do after you have cut all the costs and ditched the staff? Do you want to be a flagship, high service carrier or do you want to be a low budget, menu-service airline? If so the latter, you are in the wrong place today as your hubs are the two most expensive of airports and you have a purpose-built terminal to handle customers. Yet that's what seems to be the plan - as BA sequentially withdraw simple things like meals and seat booking to charge for them but they do not lower the prices of the ticket in return.

In the middle of all this remains the staff - loyal and capable people who love the airline and give the service that the company was once famed for and proud to advertise. Effectively, Walsh is trashing their skills and abilities and looking to replace them with 'Easyjet-style' crew. The result could be tragic in terms of service - make no bones about it. The difference in the levels of ability and skill of cabin staff between low budget and BA is enormous and there is an immense confidence factor involved. If an incident occurred in mid air, I know who I would want to be running the plane - I think I best summarise it as that. On the last Easyjet flight I was on, we were served by a young man wearing a stewardess's outfit bought from a joke shop with his boxer shorts sticking out from his mini skirt as the staff laughed at the unwitting groom-to-be and took photos. Good fun but airlines are, in fact, serious business.

I wonder why the investors in BA carry on with the current management. From the Terminal 5 total fiasco to the series of knee-jerk, almost fag-packet attempts to save the business to a total lack of strategy, the airline is slowly dying and Walsh seems powerless and witless to do anything about it. The enduring image I have of him of late is his interview on the converted Airbus 318 taking off from City Airport, refuelling at Shannon and going on to New York running an already dead Club-only service for just 100 passengers talking of his new attempt to take over an equally dying airline, Iberia.

It was all wishful thinking.

Is Willie a Willy?

So there is a recession on and a credit crunch. Two ‘all business class’ airlines failed in the last year, both did not use ‘hub’ airports and carried limited amounts of passengers to the US.

I used Silverjet and I loved the service – flying from Luton with a great purpose-built terminal of its own, the service was great for a £1,000 return flight to New York. I was not the only one to think so – as I bumped into Martin Johnson’s knee and Mark Blundell too on two separate trips.

But it crashed, so to speak, and burnt. Even with a nice big Boeing, it did not attract the customers and Luton is one of the more accessible of airports with lower cost, nearer parking – Silverjet offered valet parking service too.

Now BA has launched a new service. From the short take off airport at the City, it has a specially converted Airbus 318 to carry only 100 passengers in total and only 32 in equivalent flat beds of Club Class to New York. Ah, there is a catch too. The A318 cannot take off on the short runway with a full load of fuel that would get it to New York and so it has to refuel on the way which means a stop at somewhere like Shannon.

I have criticised Willie Walsh, CEO of BA, before for his dreadful lack of strategy and his series of knee jerk reactions to the market conditions. But this folly in the face of tried and tested failures in the same sector will go down badly with all those staff who have taken early retirement, worked harder or taken a salary holiday in order to pay for his whims. This is a real humdinger of a poor idea and it frankly deserves to fail in the face of much better thought through services by smaller companies that he harried to put out of business.

Easyjet have criticised it also as a shuttle service for rich bankers which sort of puts it into perspective as we all are now commanded to hate such people by our Supreme Leader who has now issued laws and ultimatums to bankers and all Tories for causing the financial mess we are in. Poor old Willie has taken a good aim at his foot and blasted at it with gusto. Perhaps the resultant pain will wake him up.

At a time when BA has called for an extra £600m in cash and tried nonsensical cuts to try and compensate for the horrendous losses of last year, this was one investment that could have waited or have been binned.

But nope Willie is a real willy, for sure.

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.

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.

How Far Would You Go To Save Your Job?

In these troubled times, even though there is talk of recoveries on the way, the continuing contraction of economies means that inevitably job losses have some way to go before they peak.

British Airways workers have voted to take a 'work for free' month after CEO, Willie Walsh, led the way. The fact that he was surrendering £35k was pretty impressive but then so is his annual salary, despite presiding over the largest loss since the airline was privatised. Workers at JCB voted to go on shorter working hours in order to save some 300 job losses. I am sure there are more examples of how people have either made sacrifices or been incredibly innovative about how they persuade their employer not to shed their job.

In Spain, where many economists are predicting as high as 20% unemployment very soon, the situation is becoming desperate. To some extent, here in the UK, people are either stoic, fall back on the Welfare State or are reasonably confident they can get another job over time - even if they have to accept less money or seniority. The Spanish predicament is so acute that if someone loses their job, then the likelihood of finding another at all, let alone with a salary drop, is very remote.

There has been the case of one Spanish man who worked at the Barcelona International Convention Centre who contracted a group of six Colombians to murder his boss in the hope that it would stave off the imminent loss of his job. At least he will not go without a roof and food as he is due to spend a significant time in jail.

But it begs the question: How far would you go to save your job?

Work Hard And Be Flexible

I don't know if there are any good formulae to be really helpful in trying to save your job. I am sure many companies are just using the current situation to shed more than is necessary as for some companies you have to believe that they cannot see beyond the very short term with some of the measures they take. Many banks and financial companies have slashed back office staff, while embarking on high visibility marketing campaigns and you have to question their management capability. The Government is reducing the Armed Forces headcount yet we are fighting two major wars - strategies continually seem to be at loggerheads with market situations. Many companies are cutting very deeply just at the point when economists are predicting we are through the worst of the recession and that markets may pick up.

That doesn't help the people being made redundant. Some people can see the writing on the wall and almost invite it. There is some wisdom here. Think about it - the market is at its nadir and things may pick up soon so what better than to have a nice redundancy pay off, take advantage of a lovely hot summer or foreign holiday and wait it out until the market picks up?

The fact is that most of us are born worriers and the older you are the worse it gets. As a person not far from 50, I have mild panic attacks thinking what would happen if my business implodes and it must be far worse for those working for large employers as at least I am pretty much in charge of my own destiny. I have seen small companies cruise into the recession and hang precariously onto a single decent customer who is the difference between survival and bankruptcy and am astonished how they continue to not worry. Then I look at people like my sister, whose company is having a strong time thanks to continued Government spend on training and yet she is never satisfied that they have enough resilience.

Different companies and different people react in different ways. For many, a job is a mark of status or duty while to others it's what pays the bills. Clearly, to the unfortunate man in Spain, it was his everything.

I used to think that if you worked hard and were flexible then your employer would value your contribution. This recession has proved that employers do not always work that way. In the heat of the banking crisis, great swathes of administration and back office jobs - none of which had contributed in any way to the idiotic decision-making that exposed the organisations to losses beyond comprehension - were lost and few of the whizz kids who caused the mess were ditched. In fact, in the craziness of the Bank of America take over of Merrill Lynch, they actually paid bonuses long after everyone vented their spleens on the subject to prevent the very people who caused it all leaving. Here in the UK, the banks proved almost suicidal as RBS shed some 9,000 jobs and then a subsidiary launched a glossy advert campaign saying how they were going to mobilise more staff to visit clients. Aviva spent millions on telling us why they were changing Norwich Unions' name yet in the same timeframe they made many people redundant and saw their share price collapse.

My point here is that this recession has exposed us to some of the worst effects of poor management and it is pretty clear that some seriously large companies are managed by fairly incompetent managers. This means that the decision-making in cutting jobs is being made from pretty limited understanding of business and therefore likely to not really focus on what is needed for the future and almost certainly neglect the general contribution of workers. Management by numbers has come to the fore and 'entrepreneurial' and 'blue sky thinking' managers who delighted in their own successes seem to have all too quickly abdicated their responsibilities and left it to the accountants.

My only advice to people under threat of redundancy is to seek good advice and to listen to what the company has to say. Inevitably there may be some consultation process and, if so, take an active part and be constructive and conspicuous. If you want to save your job in dire times, it is important to be flexible. I know there is a real danger that employers may force what appear to be short term changes in conditions on employees in order to save jobs, but make sure concessions are made with caveats relating to the future. In all of this, keep talking about the future because that's where the company is trying to get to so if you play your part in helping your employer get a future, so too must you at least get back what you sacrificed to help this being achieved.

Redundancy is an emotive topic and many take it personally. In my book, it is more a failing of the company and its management team and the stigma should fall on them. In the UK, it doesn't work like that. There is no penalty on the company for using redundancy to boost profitability, the State picks up the tab and so it becomes an easy weapon to use. In France and other Continental countries, redundancy is a hard tool to use to save money and can end up costing more. For good or bad, this focuses the minds of managers to be not so bullish in the good times and be prudent in the bad - to make them run their businesses more strategically rather than tactically even if they that's what they think they are doing (so many believe if they mention the worked 'strategic' then that is what they are doing - most have no idea what strategy is).

In preparation for potential redundancy, think positively about how you will handle it, talk to family and friends, get ideas on what you may do after being redundant, formulate a plan of action, a list of things you want to do, and how you will do them. Most of all use the experience to gain a confidence rather than the opposite. Remember, if you are not for a man like Stephen Hester of RBS, who will get a £9.6m bonus shortly, nicely in proportion with the 9,000 redundancies. You can walk away with your head held high as you were not in it for yourself alone.

Britain has a chance to get better managers in place, to force companies to think beyond the mountain of short term opportunity, to be more prudent, regulate themselves more and protect their employees against the outcome of their stupid actions. Time and again, low paid workers pay with their jobs for more well off managers' mistakes.

As we sit under a Socialist Government, you would have thought this would have been top of their agenda. Once again it will be an opportunity missed.