Originally Posted by Final 3 Greens
Any company can achieve a short term rise in profits by the simple expedient of reducing costs. (Yes, I know they are up 11.8%, but I am speaking in relative terms and not scoping in fuel into my thinking.)
The question is whether this performance will be sustained in the longer term and time will be arbiter of that.
I find it hard to characterise BA's cost reductions as a "simple expedient", as if it were some slash-and-burn operation. A lot of what's been done has been structural, and good for the long term. Think, for example, about the work on distribution channels and costs.
My personal worry is that some of what BA is doing now has moved into the realm of the silly, causing problems which may have disproportionately adverse operational effects that ultimately really irritate pax and drive them elsewhere. An airline operation has to have some fat, some margin, to deal with irregularities and randomness, and BA is showing many signs of now having insufficient.