Reputations are more difficult to win back than to lose

Back in the 1990s, British Airways, the nation’s flag-carrier, proclaimed itself to be “the world’s favourite airline” in a long-running and hugely successful advertising campaign. Watching its iconic TV commercials from sofas across the country, many Brits-a pint-sized, starry-eyed Gulliver among them-swelled with pride at what was, at the time, a genuinely treasured national asset. Economist.com: “BA should be careful; reputations are more difficult to win back than to lose”.

“Were British Airways to run the same campaign today, it would probably stir a mixture of derision abroad and embarrassment at home”.  (Economist.com: Little by little, British Airways is chipping away at its good name /19.08.2016). 

In recent decades the Persian Gulf carriers have dethroned BA as the standard-bearers for long-haul service, while a new breed of low-cost carriers has attacked its short-haul dominance.

Yet the loss of prestige in distant lands and market share close to home has not hit the airline‘s finances. To the contrary, British Airways rakes in the cash. It posted a £2.5 billion ($3.3 billion) net profit last year; equivalent to nearly half of all takings in the European airline market. Three factors have driven this success: slot restrictions at London Heathrow Airport, which suppress competition at BA‘s home base; a merger-and-acquisition strategy under the flag of its holding company, International Airlines Group (IAG), which now also owns Iberia, Vueling and Aer Lingus; and a relentless dilution of BA‘s once-superior customer service and on-board product.

It was the global financial crisis that put BA on its new, thriftier flightpath. Willie Walsh, the airline‘s former chief executive, who now steers IAG, claimed in 2009 that BA was in a “fight for survival” amid structural changes to the airline industry. As well as confronting trade unions, he removed free meals from short-haul flights; reduced free baggage allowances while simultaneously increasing excess weight charges; and imposed a fee for seat reservations. At the time, the airline insisted it had “no plans” to limit basic fares to carry-on luggage. They soon made them. It introduced “hand-baggage only” fares on some short-haul routes in 2013, imposing a surcharge for checked bags.

economist.com: “Despite notching up five consecutive years in the black, BA is getting even stingier. Its latest measure, like the previous ones, has enraged a British tabloid press hungry for holiday-season scandal. Without formally announcing any changes, the airline last month stopped providing two meals to Economy passengers on flights under eight-and-a-half hours. In lieu of a complimentary sandwich six hours after their first meal, travellers on the London to New York route are now presented with one-and only one, according to embarrassed cabin crew-fun-sized chocolate bar. Passengers who spoke to the Sun about the policy described it as “a joke”, “insulting” and “outrageous”. The Sun is oft-suspected of embellishing quotes, but Gulliver doubts that its reporters had much difficulty sourcing bona fide remarks in this case. Worse still, according to Head for Points, the travel blog that first leaked the story, BA is now making a “monthly announcement” to staff about successive waves of cutbacks. For July, the blog disclosed that bottled water, pretzels, cheese and biscuits will also be removed from Economy cabins, while amuse-bouche will be taken off the menu in First class (quelle horreufl). For August, it cited cabin-crew reports that tuck boxes-trolleys filled with free snacks on long-haul flights-will be removed from Economy, while Club passengers will no longer receive a choice of their starter. Next month, the airline will reportedly stop providing free newspapers at the gate for inbound short-haul flights to London.”

BA should be careful; reputations are more difficult to win back than to lose. The man nominally in charge of these decaying service standards is Alex Cruz, the former boss of Vueling. Few doubt, however, that Mr Walsh, who earned the nickname “Slasher Walsh” for his penchant for cost-cutting, still pulls the strings. When Keith Williams was promoted from CFO to CEO at the airline, as Mr Walsh took up the reins at the parent company, he joked that he had moved from “the second most important job at BA to the second most important job at BA”. If Mr Cruz wants to avoid the same effacement, he should listen to the angry backlash against these policies and stop denigrating a once-proud British brand.