COMMENT: The British Airways” Night of the Long Knives
The announcement last week of a major cull of British Airways management staff has sent shock waves throughout the industry. The sheer magnitude of the redundancies, easily the largest ever by a British airline at that level, requires careful consideration and not a hurried response; hence the week”s wait for comment.
One thing is very apparent. If Willie Walsh can dispose of 50% of senior management and 94 of the top executives, the question must be asked, what was the previous management doing? 23% will go by 31 March 2006. And was the night of the long knives just the beginning? Who is next up for review ” Airport ground staff? Telephone representatives? Which area? Clearly those whose jobs are duplicated in the soon to be closed BA Terminal 1 and Terminal 5 facilities at Heathrow ought to be looking elsewhere from 2008. What will happen to unprofitable routes and the slots they might release?
Where do the pilots fit into this? There has been much criticism in the past of the so-called "traditional" practices of aircrew. Whilst most budget carriers manage to work their flight deck personal up to the maximum 900 hours allowed under the rules, rumour has it that the BA figure is not much more than half that, better paid and with more advantageous allowances. It is said that a British Airways captain could cost the airline three times the amount Ryanair or easyJet allows for in its economic planning.
Are the redundancies just a cover to recruit a gaggle of young bloods at Waterside (maybe some older hands too)? Who chooses who is to go? Undoubtedly it will suit some near retirement age, but for others finding a new post will not be easy. Some really good people will lose their jobs and likewise others, who some might question, will keep theirs.
At the end of the day British Airways is required to sell seats, and profitably. It needs to get its message across to a sceptical (and in many ways spoilt) travelling public, something it has not been that good at in the recent past. The great (and most successful) airlines have always had charismatic leaders who led the troops. Juan Trippe at the not forgotten Pan Am. Bob Crandall of American, Lord King at BA, and Richard Branson, without whom Virgin would not exist. They were and are salesmen. For Willie Walsh this will not be easy. It is not his style but he has time to learn. He comes to BA when it is profitable, has no unwelcome new aircraft booked, no outstanding purchases still to be added to the balance sheet and nothing major in the way of industry commitments. A clean slate on the business front although the debt and pension problems have not gone away. He has 40% of the slots at the world”s busiest international airport and in two years” time the use of what undoubtedly will be the finest air terminal anywhere in the globe.
And then there is London”s continued existence as the world”s commerce hub and the build-up to the 2012 Olympics. Mr Walsh clearly needs to put things right in-house first but he must not lose sight of the commercial requirements. The word has to get out that British Airways is once again a leader of the world”s airlines. Safe, reliable and innovative ” Mr Walsh has to fly the flag.