For this month”s ”ON THE SOAPBOX” Lord Marshall, who last week retired as chairman British Airways, looks back on his two decades as a major figure in air transport.
”One way or the other, I”ve had the opportunity to meet a great number of old friends, both within and outside the industry, in the days before and just after my retirement from British Airways. Most of them had one pressing question.
”What,” they asked, ”have been the best and worst moments of your time with the airline?” Fortunately, the answer has not required much brain wracking.
Easily the single best moment was the successful privatisation, in February 1987, of Britain”s state-owned airline corporation and its transformation into a world class, customer-focused business. It was ” and still is ” a source of great pride to see British Airways become a brand leader in the global aviation market.
The very worst event occurred during the early afternoon, UK time, on September 11, 2001, when the horrific terrorist attacks in New York, Washington and Pennsylvania began to unfold on our TV screens. Their immediate effects and long-term repercussions have been cathartic for this industry.
To be involved in commercial aviation, working with the wonderfully committed people the business attracts, is a great and fulfilling experience. I have learned, however, that this industry is not for the faint hearted or those who seek an easy life.
Over the 21 years since I joined British Airways, the international passenger market has grown by an annual average of more than 6% and freight by 7.5%. This means that passenger demand has tripled over that period and the cargo market has quadrupled. A pretty steady and lucrative business, you would think.
Yet behind those benign average growth figures lies a white-knuckle ride for even the most hard headed of business people. In this industry, exhilaration and exasperation seem to go hand in hand.
Outstanding ” even breathtaking ” technical, customer service and business achievement vie for attention with disappointment and disaster.
In recent years, fortunes have been lost and great companies have gone out of business as the industry has come under siege from the sequence of adverse events which followed 9/11.
Collective losses have been counted in tens of billions of US dollars and at the last count around 400,000 jobs have been lost. Some famous names ” Swissair, Sabena, Air Afrique and TWA ” have been wiped off the airport information screens. The major US airlines have clung on because of government handout and loan guarantee. More recently, we have seen the Italian government”s move to provide rescue and restructuring state aid to Alitalia.
Fortunately, through bold strategies and committed people, British Airways survived the onslaught, even though the situation has been tough and very worrying at times. Certainly, it gave me great personal satisfaction to be able to leave the airline in a more robust position than it has enjoyed for a while.
Much of the industry”s problems clearly stem from the way in which it is structured and regulated by international agreement made in 1944. The 60-year-old rules on airline nationality, ownership and market access prevail to this day and it is a source of regret that they have not changed during my time as an airline man. Air transport remains unable to contemplate the kind of international merger and acquisition which is commonplace in other sectors, such as banking, financial services, automotive and telecommunications. For sure, we have seen the emergence of global alliances, but for all their evident value to customers and partners alike, they are, in reality, poor substitutes for full-blown, commercial amalgamation.
Unanimous agreement within ICAO to liberalise restrictive regulation is unlikely, to say the least. Our best option is to move step by step through the development of open aviation areas between countries or blocks of countries, such as we have in the European Union and the proposed arrangement between the EU and the US.
We knew that the trans-Atlantic talks would not be easy and it came as no surprise that initial US proposals falling short of the free market ideal were rejected by the EU. Negotiations will resume but not in any serious way until after the US Presidential election in November. If the visionary EU/US open aviation area can be achieved, it will lead to wholesale, much-needed reform of the industry. I look forward to watching progress from afar.
One of the industry”s long-standing uncertainties has been removed, at least in principle, with December”s Aviation White Paper, here in the UK. For the first time, we have been given a policy enabling us to cater sensibly for growing consumer demand over the next few decades. It is good for the UK as a whole, but I was particularly encouraged by the recommendation for a third runway and sixth terminal at Heathrow, subject to certain environmental concerns being met. The importance of a thriving Heathrow to the industry at large and to the British economy is glaringly obvious and we must build on its strength. The airport is, after all, Britain”s one and only global gateway.
Despite the downturn and despair of recent times, this industry remains eternally optimistic in its go-ahead way. Anyone who doubts that, need only to visit Heathrow, where Terminal 5 is, day by day, becoming an exciting reality; or go to Gatwick to see the startling architecture of recent improvements.
The nature of contemporary airline competition, especially in Europe, is also testimony to a vibrant, evolving industry. Many are fascinated with the apparent novelty of the no-service carriers, but many industry veterans will recall the relentless low-fare competition of the enterprising charter airlines, going back to the 1950s. Nevertheless, the no service, scheduled carriers, operating in Europe”s modern, deregulated environment, do present a different kettle of fish.
One of my last, major tasks was to oversee the retirement of Concorde. It was a very sad, but inevitable situation. I think we ensured that Concorde bowed out in triumph and with great dignity. Now, we look forward to the eventual next phase of supersonic ” or even hypersonic ” flight. I simply cannot believe that, in this century, the industry will not come up with innovations and advances every bit as exciting as those of the last.
I suppose the one aspect of air transport that I have most admired and been inspired by is its people, especially my colleagues past and present at British Airways. My abiding memory of the past 21 years will be of the deep commitment, professionalism and sheer passion of airline people, everywhere.
Thanks to them, I”ve enjoyed the ride!
Colin Marshall (Lord Marshall of Knightsbridge)