I think I might be able to help you here, Rod.
"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.”
A successful business has a product that people want to buy at a price they are prepared to pay. They don’t mind paying more if they believe they’re getting real value for money. For a product to be a premium product, it must be of exceptional quality and stand alone in the market place. You have a duty to operate efficiently to best serve the interests of both customer and investors.
"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.”
Maximising return on investment comes from constant attention to detail, ensuring that your product remains ahead of the pack, and constantly reinvesting in the product. At the same time you must keep operating costs to the absolute minimum. Your business should be cheap to run but lucrative at the same time. Borrow only to invest.
"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.”
Unfortunately, you seem to be blind in one eye when it comes to your staggering costs.. . . .
"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.”
You won’t do that by paying subsistence wages to miserable staff. Invest in customer service and operational staff – get rid of administrative staff. Structure your business to be lean and mean. Use the best of modern IT to streamline your management to the minimum possible. Reward your employees to attract and retain the best possible individuals. INCENTIVISE.
"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.”
Before 9/11 BA employed more people per aircraft than any of our competitors, after 9/11 you employ even more. You have the biggest, most unwieldy, most internecine, most conservative, most introspective, most inertial, most political, most feudal, most reactionary, most EXPENSIVE management in the business. Do yourself a favour and bin them.
"That way, British Airways and those who work for the airline will have a far more secure future."
It’s up to you Rod. Your move.
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