Rod's Words of Wisdom
The following is from a BA press release issued today. So, what's BA going to do?
Rod Eddington looks at the elements which underpin a successful business
As British Airways continues to conduct a "Future Size and Shape Review" of its operations, Chief Executive, Rod Eddington, looks at the elements which underpin successful companies.
"What are the characteristics of a successful business? This is on all our minds as we continue the work to decide on the best future size and shape of British Airways. Among the things we need to do is make enough profit to compete with other successful businesses, whether they are airlines or not.
"We need to be able to offer shareholders as good a return on their money as they would get if they invested it elsewhere. We also need to make enough money for capital investment.
"Most other successful businesses, including the best airlines, aim to make a £10 profit for every £100 of revenue they generate - an operating margin of 10 per cent. At the moment we don’t manage that even in good years.
"If we are to reach that goal, we will have to have the right products matched to the right fleet and routes, and continue to offer excellent customer service. Our costs will have to come down.
"The work being carried out under the Future Size and Shape Review at the moment is aimed at helping us put the building blocks in place to achieve this competitive level of profitability in the future.
"That way, British Airways and those who work for the airline will have a far more secure future."
January 24, 2002