Monday, 3 August 2009

Challenging times with British Airways

It’s a bit of a shocker that British Airways has reported the worst losses since 1987, with a pre-tax loss of a staggering £148 million in just the three months April to June. Compare this with the profit of £37 million that they made in the same quarter of last year, and this gives you some idea of the true magnitude of the loss.

Of course it’s been a tough year generally for the airlines as consumers have cut back on spending on flights due to the recession that was triggered by the credit crunch, and this is on top of the challenges that the traditional airlines face from the budget flights now offered by the no-frills airlines.

BA has been looking for ways to save cash, in what chief executive Willy Walsh describes as a “fight for survival”.

Cost cutting measures range from the just about tolerable to the most likely intolerable. The tolerable being the decision to no longer serve economy passengers a meal on short haul flights after ten in the morning. So you still get your breakfast, but nothing except drinks and snacks if you fly later in the day. Fair enough – I’m sure I can go a short haul flight with no on board meal, especially as there is usually ample opportunity to grab a snack at airports.

Less likely to be tolerated though was the idea of asking thousands of staff to work for free for up to one month to help keep the airline afloat, or aloft, rather. I can’t see people working for nothing as it does rather leave the problem of how to pay your bills for the one month that you toil for nothing. On the jobs front with BA things have been getting bad enough with the airline cutting staff since the end of March, in a process of reducing overtime, increasing part-time working, and voluntary redundancy. Working conditions have reached a point where there is now the risk of industrial action from cabin crew, which may not inspire travellers to book their flights with British Airways at the moment.

BA is also cutting the free baggage allowance that it gives to World Traveller class; a new policy that only affects economy passengers, and will not affect certain routes.

The airline’s chief executive, Willy Walsh, has said, “Trading conditions continue to be very challenging”, and for the economy passengers and BA staff things continue to be challenging.

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