The Guardian: “For BA, a £100m compensation bill could be just the start“

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It is now a week from that disastrous British Airways “shut down” that was due to someone turning/plugging off device that grounded the airline for a day.

Now, the British press has started to ask tough questions as they should (in my opinion earlier). Has the cost cutting gone too far? Is the leadership competent? What is British Airways? Is there any difference between British Airways and so called low cost airlines?

You can access The Guardian article here of which below is an excerpt:

While Willie Walsh, chief executive of IAG, briskly rebuffs any notion of staff or customer discontent, pointing to growing passenger and job applicant numbers, even City analysts who applauded his efficiencies have started to wonder if the costcutting has gone too far. Among European airlines, BA has some of the lowest satisfaction scores for customers and staff, according to surveys by Glassdoor and Skytrax.

Walsh’s tough efficiencies have led to booming profits for IAG, with Iberia, the first partner in the 2011 merger, forced to slash its fleet and wage bill. The shares, 146p five years ago, are near an all-time high, closing at 607p on Friday, despite the previous weekend’s debacle.

Vueling and now Aer Lingus, where Walsh earned his reputation, make up the rest of the IAG fold in an industry where rivals such as Ryanair dominate the short-haul market. This week, IAG launched a long-haul, low-cost carrier, Level, out of Barcelona, following Norwegian’s threat to its transatlantic market. The lines have become increasingly blurred, but while BA has cut costs to compete on fares, so far it still retains a significant brand loyalty.

Whether that can survive many more events such as last weekend’s fiasco is critical. Its Avios points scheme keeps many frequent flyers in BA’s network, to the point where even some stranded travellers last week spoke only of “questioning their loyalty” rather than vowing to switch. But aviation consultant Chris Tarry says: “It’s a very competitive environment. When you lose those customers it costs a lot to win them back.”

Conclusion

It never ceases to amaze me how airlines are able to bounce back from these “issues” that are entirely self made (and possibly part of their “cost cutting”).

Let’s hope that the British public will finally open their eyes and will start booking away from “British” Airways. I guess that is the only hope that anything positive will come out of this.

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