Ba

[thegoaf]

Just a few thoughts on the management regime over which Rod Eddington has presided at BA over the last few years.
1 When he took over BA was by far the largest European airline. It is now a poor third.
2. Gatwick was then a major hub for them with a larger production than KLM had at Schipol. It has now been assigned a minor regional role and further cutbacks for this summer have been announced
3.No new long haul aircraft have been ordered although this means that expansion is likely to be very difficult.
4. It is now giving away routes to its competitors. bmi to RUH for example.
5. 757/767 major overhauls are now a year behind schedule. This suggests that deep underlying problems have not been tackled
6. Ryanair, Easy, Monarch, Air Berlin, Thonsonfly, etc etc seem to be booming which that they have judged the market correctly and that BA have judged it wrongly.

Any comments?

[Globaliser]

thegoaf: Just a few thoughts on the management regime over which Rod Eddington has presided at BA over the last few years.
...
Any comments?

Yes. I think that somewhere in your list you have overlooked the fact that BA is now the most profitable airline in the world, on an operating profits basis, and that net debt has been more than halved from its previous potentially-crippling peak. That's what matters most to the shareholders to whom Rod Eddington owes his primary duty.

Whatever you might think of the balance or the methods, isn't that worth some credit?

Many of your comments are predicated on a "bigger is better" outlook. The US airlines have pursued that strategy for years, and look where it's now got them.

[phil_2405]

Although BA still has issues it needs to deal with, I would say it is in a better state than it was before Mr.Eddington.

[Wannabe Flyboy]

1 When he took over BA was by far the largest European airline. It is now a poor third.

A big route network doesn't make you a better airline. Frequency and punctuality are far more important - however good or bad BA may be at that!

2. Gatwick was then a major hub for them with a larger production than KLM had at Schipol. It has now been assigned a minor regional role and further cutbacks for this summer have been announced

By putting more transfer traffic through LHR they can increase profits rather than be stuck with lots of £69 return fares from LGW.

3.No new long haul aircraft have been ordered although this means that expansion is likely to be very difficult.

No new long-haul aircraft are currently needed - the fleet is over 100 strong and even the oldest 747s have a good 5 years left in them. Rod has stated he is looking with interest at both A380, 772/3 and the 787.

4. It is now giving away routes to its competitors. bmi to RUH for example.

I would think BMI are taking routes away from them; BA is forced to allow competitors on routes and no longer has the financial muscle to remove them.

5. 757/767 major overhauls are now a year behind schedule. This suggests that deep underlying problems have not been tackled

The 757s aren't getting overhauled. But how does the 767 issues suggest 'deep problems'? I think it more sounds like they'd rather have a profit and remain existing than have a load of fancy seats.

6. Ryanair, Easy, Monarch, Air Berlin, Thonsonfly, etc etc seem to be booming which that they have judged the market correctly and that BA have judged it wrongly.

FR, EZY and co. have very different business models to BA and it's hard to compare them. In Europe BA is really there for the business traffic and connecting passengers; not weekend trippers. Regardless, they're still making more money than any LCC.

Once BA's debt is below £3bn (which is getting closer quickly) perhaps we'll see something interesting happen. A revamp of FIRST and CW is on the cards and Rod is 'looking into' adjusting Club Europe.

[airlimmo]

Re: Let's slag off British Airways CEOs

Hello

I have to say I think your post is highly inaccurate. Rod Eddington transformed BA from a terrible airline with High Fares and a disastrous Low Cost Airline Technique, trying to destroy easyJet and Ryanair with horrific tails into a profitable, acceptable and affordable airline, that most British people are proud to have as their flag carrier.

1) So what? Other airlines are allowed to grow too you know...
2) No-one lives near Gatwick, all the routes were not making any profit and they were giving easyJet their space
3) Not true, A380s are being speculated over and 777s are on their way to being delivered by the hundred
4) Giving them their space - if they're making a loss on a route, and a heavy loss I might add, please tell me why you think they're going to continue to operate on that route? Personally if I were CEO I would do the same thing rather than let my Airline go to ruin over puny destinations that people fly Package to anyway.
5) I fail to see the relevance of that
6) I think that BA's £230m profit is slightly more significant that RYR's £20m profit

Please check your facts before you post, and no I am not Rod Eddington.

[Angry Rebel]

Re Airlimmo

Airlimmo, assuming you mean Ryanair by RYR, if you want to lecture people about getting their facts right I suggest you have impeccable credentials yourself first....

Ryanair made a profit (before tax) of €250 million (c.£175 million at todays rate) in FY04, and BA a profit (before tax) of £230 million in FY04.

[thegoaf]

Angry Rebel, you have made exactly the right point. RYR made that excellent profit from what are believed to be the lowest yields in the business. BA made less that that from what are widely believed to be the highest yields in the business. A point I did not make in my earlier post was that throughout BA's period of retrenchment and debt reduction Virgin have expanded. They seem to have concentrated on the leisure market and have found plenty of growth there. BA have concentrated on the premium market and have found conditions to be very sticky. Every monthly business report they release seems to say that market conditions are challenging. But RYR, EZY ZB, AB etc report booming conditions. Who is right? BA have certainly done an excellent job in reducing debt and improving profits but where is it leading? Is there really a future for the stunningly expensive long haul first class product? Is there really a future for Club Europe?

I suspect that Willie Walsh will vigorously challenge these outdated product concepts that have dominated BA for so long. If so that company is in for a long period of dynamic change.

I have friends and relatives who work in BA and thry do not seem to grasp the fact that within a couple of years both RYR and EZY will outcarry them in pax number terms and probably in profitability as well.

I think that BA is one of the most efficient long haul airlines: it is certainly the biggest but its marketing does not seem to be in line with customer demands and expectations. Its short haul product seems to be completely lost.

[gatwickflyer]

It is very easy to bash BA and RE but I think a few basic facts need to be remembered:-

BA had no government assistance after 9/11 , unlike US carriers who were, and who then promptly launched a price war on the Atlantic routes , their way of saying thanks for being No 1 ally !!

BA did not have any knee-jerk reaction to 9/11 like retrenching crew etc unlike another well-known UK airline who took a long time to restore morale after their initial panic.

BA is now doing very well and if they could find a way to equalise the cabin-crew costs that Virgin enjoy , they would post truly staggering profits.

I have met many people around Asia who represent UK in business etc and virtually all surprised me by their passion for BA and feeling 'at home' the moment they step aboard wherever they fly from.

BA have , and do , make mistakes from time to time , everyone enjoys beating them with big sticks when they can , but they are not going to go away and UK should be proud of them.

I am not knocking Virgin , they are also an airline for UK to be proud of , but they have been allowed to 'cherry pick' the golden routes as and when they have chosen to , so naturally they must be doing very well , but we will never know as they are not required to publish accounts , hold AGMs and account to their shareholders at regular intervals.

Let us all stop knocking BA and anyone else in the uK for that matter , as we should all be very proud of the standards we all set.