Streets of London: Big Trouble At British Airways

If you haven’t already heard, British Airways is in trouble. Big trouble. On February 13, BA announced job losses of 5800. This follows hard on the heels of 7200 redundancies announced immediately after September 11th.

Disappeared: 13 000 positions. That’s a quarter of BA’s workforce. Terminated. Behind the numbers, that’s so many jobs and so many pay packets gone, career prospects and hopes blighted with two swings of the axe.

BA says it has to save £650 million ($NZ2.22 billion) to get itself back into the black. London’s Daily Mail newspaper has reported a loss of £19 ($65) per passenger.

These are hard times in the airline industry and very turbulent times for BA particularly. Oh, come on, at least I didn’t say ‘BA’s in for a bumpy ride’; British journalists have been falling over themselves to weave as many corny aviation analogies as possible into their BA stories.

Anyway, the Independent newspaper says the airline should drop its understandable, but ultimately self-defeating goal, of competing with low cost airlines in Europe. It should stick to what it does best, long haul.

I’m not au fait with how competitive BA is with its medium haul flights actually, but perhaps the Independent is right: If my experience of trying to get a reasonably-priced plane ticket through BA means anything.

Clearly, there are a numerous BA long haul routes, with their unique associated costs, but I managed to get a most competitive return fare home to New Zealand via Los Angeles recently from BA/Qantas and the budget airlines, which have outdone the national carriers for cheap European flights, aren’t competing on such routes.

Do they pose a threat? It’ll probably be a while before any of them, should they decide to, embrace the long haul market. They would have to find landing space in already packed airports around the world, let alone afford the charges that large airlines normally pay.

Moreover, there’s increased fuel costs and bigger cabin crews. And, they’d have to buy enough big planes to have a reasonable long haul fleet, and pay for travel agents, although BA are slashing the commissions they pay, so that price is subject to downward pressure.

Not using travel agents appears to have been vital to keeping easyJet’s prices, for example, very low. EasyJet is widely accepted as a model European low cost airline. You simply print out a passenger confirmation number from its website and take it with your passport to the airport.

But even in our age of mega corporate mergers and mammoth capital investment there are large barriers to moving in on long haul flight markets.

In sharp contrast to BA’s good long haul prices, for the past few years in Europe, flyers typically have faced the choice between something along the lines of say £80 ($273), £50, £40, even £20 and less for a return ticket to Cork, Barcelona, Madrid, Oslo, Geneva or Amsterdam, with cramped seating, paying for your own lemonade, beer or glass of house white, and from £100 to £150 if you’re lucky with BA or the other big, established airlines that have better magazines to read and give you a complimentary meal and drink.

The absence of a meal and free drinks, no television, the worse reading material, these things aren’t that big a deal, though, when you’re in the air for only two hours, 20 minutes. Basically the British Airways, Lufthansas and Air Portugals can’t compete effectively with the bargain basement easyJets, Ryan Airs, and Buzzes of this world, and in BA’s case, they should face it. Word’s got round and people have headed in droves to the cheapies.

And so the worst may still be to come, with BA keeping its hand in the European short haul market.

Ok, the big players are offering some better deals now, and people have cottoned on to the fact that ‘Stockholm’ for example on a budget airline’s listings may be one-and-a-half-hours by coach from Stockholm.

However when I flew return to Sweden’s capital in November it cost me £22.28, of which £20.79 was airport taxes. Incidentally, the coach trip was pleasant enough and even airports supposedly ‘close’ to cities generally seem to me anything but. In late 1998 I flew to Ireland from London return for about £17 ($NZ58).

That’s hard to beat or even compete with if you’ve built up a massive bureaucracy over the years, even if you do, finally, decide to copy radical ideas such as not printing and sending out tickets, which BA’s only now twigged to.

Why fight such a hard, probably losing, battle in such difficult times? BA should refocus and help get me back to New Zealand next time more comfortably and for even less.

- Malcolm Aitken is a freelance journalist based in London. He can be contacted at malcolmaitken@hotmail.com

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