As some of my much-esteemed Charioteers might know, I’ve recently changed tack and completed a two-year certification programme in Business Arts. This does not in any way mean that I’m an expert or anything approaching that exulted state. I have, however, started to pay more attention to how companies and commerce work. British Airways is a recent example of how to mismanage an otherwise reputable company.
Low cost carriers have changed European travel. Legacy carriers, BA included, have largely accepted that they cannot dominate short-haul travel in Europe and have, instead, focused on long-haul flights and, in many instances, offering a more civilised flight in exchange for the higher fare on short-haul flights. Recently, however, Norwegian Air have established a number of competitive routes to the USA and, increasingly, Asia. This has given many legacy carriers pause for concern, perhaps needlessly. Having compared their fares to BA and Scandinavian Airlines, they’ve generally been the same price — if not a little higher once things like meals, snacks and hold baggage are factored into the price.
In a fit of madness, BA hired Alex Cruz — a disgusting blob of a “man” who spent years at American Airlines and Vueling. In just over a year, he’s successfully undermined BA’s brand something terrible. Carriers like British Airways, Lufthansa, KLM, Air France, Scandinavian Airlines, etc. cannot take anything for granted. They remain viable only because many people are willing to pay somewhat higher fares for a more civilised product. Their competition comes not from low-cost carriers, but from Gulf and Asian carriers able to offer a competitive fare for a civilised flight. In many instances, they’ve started carriers able to compete on less profitable routes due to fewer services offered and lower labour unit costs. Air France started Hop!, Lufthansa started German Wings/Eurowings, Iberia started Iberia Express. The main company’s brand isn’t tarnished due to a deterioration of quality, but the company can still cut costs. In North America, Air Canada have done the same. Alex Cruz, however, made the fateful error of cutting the quality of the product without cutting fares in exchange.
His glaring and unforced errors were laid bare over the weekend as British Airways suffered one of aviation’s most complete service disruptions in recent years. Despite his denials, his “cost-cutting” efforts are largely at fault for this global chaos. This might, in fact, cost his company over £100 million — and that’s a conservative estimate. This does not include a fall in passenger volume, something that’s already been increasing since his “cost-cutting” measures have taken effect. His poor record at Vueling is also emerging. For the sake of British Airways, I hope that he is sacked if he doesn’t fall on his sword. It will take a long time for BA to recover from his incompetence. If he doesn’t leave soon, BA might never fully recover.