In a past life, someone told me Richard Branson once remarked in the early days of Virgin Atlantic, “We’re in the entertainment business, but at 35,000 feet”. I can’t now find that remark attributed to Branson on any of the quotation web-sites. However, it came back to me over this weekend as I read and watched the news reports concerning the unending, torrid situation at British Airways.
What entertainment are they now in? Farce, I suggest.
It is a long, long way since the glory days of Lord King and Colin Marshall when BA claimed to be the “world’s favourite airline” – watch the famous 1989 advert at https://www.youtube.com/watch?v=jxs106rp5RQ
What’s gone wrong this weekend? How effectively has BA handled this scorching hot potato?
News reports indicate IT has been outsourced to India costing many hundreds of UK jobs. With the IT platformed in India there was a power supply problem and back-up didn’t kick in. Various “talking heads” on news bulletins have questioned why resilience wasn’t fully tested and, indeed, why the back-up wasn’t itself backed-up. There are many articles about the reliability of power supply in India, for instance http://economictimes.indiatimes.com/indias-looming-power-crisis/articleshow/51051903.cms.
There seems some justification in the criticisms about BA not making sure things carried on working when the power went off. There was one delicious moment on one of the news bulletins when a previous Communications Director of Virgin Atlantic expressed his thoughts. I thought he controlled his facial expressions very well; gloating was well concealed.
The financials
I’d love to see the business case for this initiative. The transition will cost £X, it will save us £Y each year. We’ll achieve an internal rate of return of Z%. It’s a no-brainer! Instead, BA face hard compensation costs of £150m at the top-end of predictions. As for the unquantified cost of brand damage, then how many people are like the woman interviewed at one check-in desk, “We’ve been very loyal to BA for a long time. Not any more, however”.
Data
Another critical aspect of the crisis is that BA lost access to its customer data, which a recent leader article in The Economist suggests is now the most important asset any company possesses, see http://www.economist.com/news/leaders/21721656-worlds-most-valuable-resource-no-longer-oil-data-data-economy-demands-new?frsc=dg%7Cd. So, the power goes off in India, but whether in Seattle, London or Sydney, BA should still have been able to see its data as, too, should customers in this self-service, on-line age.
Media commentary
The remarks of Edward Lucas, who normally writes for The Economist, but on Monday, May 29th authored The Thunderer column in The Times says far more eloquently than I can manage about the ineptitude of BA’s CEO, Alex Cruz, see http://thetimes.co.uk/article/caed580a-43cc-11e7-8996-351d013cd942 . The comparison to Lloyd Bridges’ character in the movie Airplane is superb.
On the “hi-viz” jacket video, how long did it take Cruz to utter the word “sorry”? Surely, that should have been the first word out of his mouth plus re-assurance that no-one would be out of pocket for the inconvenience and stress they have been caused. I’d have offered to pay for all flights and offer another one free; I reckon that would have worked out cheaper in the long-run. (Consider the famous tale of Johnson and Johnson’s service recovery actions in the 1980s, see http://www.nytimes.com/1986/07/05/business/johnson-johnson-s-recovery.html.)
Reports today, Tuesday, indicate BA has profiteered from forcing passengers to pay to upgrade in order to get a seat on an alternative flight as well as seeing customers charged 55p a minute to call the customer help line from a mobile. Additionally, Cruz has past history at a Spanish low-cost airline Vueling of lousy service. What was the interview process that determined Cruz as best candidate for the £830k pa job or did Willie Walsh simply hire in his own likeness as a cost-cutter rather than a service differentiator?
Staff loyalty let alone customer loyalty
Reports on Monday indicate Cruz issued an in-house e-mail telling people to show-up or shut-up. In his email, Cruz talks about “loving BA”, but is that love of the same complexion as that which runs through the DNA of South West Airlines; it started its life flying out of Love airfield near Dallas, Texas.
I wonder how many BA staff are now contacting Norwegian and asking about jobs on that new airline which, by the account of a good friend of mine whose daughter has recently started working for them, is offering a terrific experience that is very clearly explained. You know what you’re getting. Lucas’s closing sentence is a hammer blow given his reputation.
Is there a silver lining in this huge black cloud for BA? Only that it is not alone in the airline industry in delivering poor service. Over in the US, United and Delta have both been hauled over the hot coals of social media condemnation.
Now, one Branson quote I can find is this one, “A complaint is a chance to turn a customer into a lifelong friend. I say that seriously, not as some press release baloney.” I sense that BA has bought itself one very large slice of baloney. As The Times headlines one article today, “BA has two weeks to save itself”, which reminds me of the line from the theme song to another movie, Flash Gordon, sung by Queen, “Flash, Flash, I love you, but we only have fourteen hours to save the Earth!”
PS: if any of The Times articles won’t open because of being behind the Murdoch paywall let me know, please.