British Airways
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BA Analysis
Link to story unavailable - interesting reading. Source: ft.com
BA finds the right size and shape
By Kevin Done, Aerospace Correspondent
Published: May 19 2006 18:30 | Last updated: May 19 2006 18:30
After racking up operating losses of £1.2bn on its European short-haul operations during eight successive years, British Airways has finally stopped the rot.
Willie Walsh, BA chief executive, said on Friday that the airline’s UK and European short-haul activites achieved a £7m operating profit in the year to March 31, back from the depths of an operating loss of £310m in the year to March 2000.
In the tough review of the group’s operations, known as Future Size and Shape, that was conducted in the wake of the 9/11 terrorist attacks, BA contemplated pulling out of short-haul operations in order to concentrate on its lucrative long-haul network out of Heathrow airport, for long the powerhouse of the group.
It pulled back from such drastic action, not least because of all the valuable feed traffic that the short-haul network delivers to Heathrow, but both Sir Rod Eddington, chief executive until last October, and subsequently his successor, Willie Walsh, have insisted that short-haul must be profitable in its own right, if it is to survive.
The business has been drastically restructured. Foreign loss-making subsidiaries in France and Germany were disposed of, the fleet was rationalised and simplified and aircraft utilisation has been improved by 15 per cent, as BA has tried to sweat the assets in imitation of its ruthless and fast-growing low-cost rivals.
BA’s own low cost subsidiary, Go, was sold. That move is still debated, but Sir Rod believed it was a distraction to the overwhelmingly important core task for BA management of tackling the inefficiencies and shortcomings of the existing short-haul operations.
Sir Rod and Mr Walsh have successively adopted many of the practices of the low cost carriers. It has increasingly exploited the ba.com website for cheaper sales and distribution, and most recently has implemented a radical shake-up of its short-haul air fares with one-way all-inclusive tickets starting at £29 in an effort to drive up traffic at off-peak hours wiith low entry fares to increase load factors.
By now BA is left with three short-haul activities, the separate Heathrow and Gatwick networks and finally the UK domestic regional operation, which still seems most under threat.
The operation out of the UK regions had already been rationalised into one subsidiary BA CitiExpress, but when this continued to make losses its offering was restructured and rebranded early this year into BA Connect.
In a last throw of the dice it has become a single-class operation with buy-on-board food, and operating chiefly out of Manchester, Birmingham, Edinburgh, Bristol and Southampton in an effort to compete with the mushrooming number of low cost carriers.
Where a decade ago BA had little competition in the regions, it now faces fierce pressure from the still rapid growth of the low-cost airlines led by Ryanair and EasyJet, and including Jet2 in Northern England, Flyglobespan in Scotland, BMIbaby and Flybe.
Mr Walsh, who brought with him to BA his reputation as a tough and relentless cost-cutter at Ireland’s Aer Lingus, made clear yesterday that the days of the BA Connect regional operation are numbered, unless it can be rapidly turned around in little more than 12 months.
Mr Walsh said it still lost £20m last year and it must be profitable next year or face closure. Its financial performance had been “poor and unacceptable...We do not see it as having strategic value to the group. It provides no strategic feed (to Heathrow). It must be profitable,” he said.
The fortunes of the Heathrow short-haul network are strengthening. It is profitable, it has a modern fleet of Airbus A320 family aircraft, and to many observers’ surprise it is again finding increasing demand for its premium business class cabin, which is driving up earnings. It has 87 aircraft on 43 routes with the emphasis on high daily frequencies to serve the needs of business travellers and provide feed to the long-haul network.
BA’s much smaller operation at Gatwick remains loss-making, but a two-year programme to improve earnings by £40m is under way. Mr Walsh seemed confident yesterday, it would return to profit, although it must fairly soon replace its ageing fleet of Boeing 737s.
The operations at Gatwick are still being shrunk, and in a further move, the Amicus trade union said yesterday that 120 engineering jobs were being cut at Gatwick. Surplus properties are being disposed of, as BA discards the legacy of its earlier abortive effort to turn the airport into a complementary transfer hub to Heathrow.
Like Heathrow, BA Gatwick operates 43 short-haul routes, but only with 33 aircraft. It is now being designed by BA for point-to-point travel with a much bigger share of leisure traffic, fewer daily frequencies and a wide spread of destinations. It has recently opened several new routes including Tirana, Reykjavik, Varna and Izmir.
BA finds the right size and shape
By Kevin Done, Aerospace Correspondent
Published: May 19 2006 18:30 | Last updated: May 19 2006 18:30
After racking up operating losses of £1.2bn on its European short-haul operations during eight successive years, British Airways has finally stopped the rot.
Willie Walsh, BA chief executive, said on Friday that the airline’s UK and European short-haul activites achieved a £7m operating profit in the year to March 31, back from the depths of an operating loss of £310m in the year to March 2000.
In the tough review of the group’s operations, known as Future Size and Shape, that was conducted in the wake of the 9/11 terrorist attacks, BA contemplated pulling out of short-haul operations in order to concentrate on its lucrative long-haul network out of Heathrow airport, for long the powerhouse of the group.
It pulled back from such drastic action, not least because of all the valuable feed traffic that the short-haul network delivers to Heathrow, but both Sir Rod Eddington, chief executive until last October, and subsequently his successor, Willie Walsh, have insisted that short-haul must be profitable in its own right, if it is to survive.
The business has been drastically restructured. Foreign loss-making subsidiaries in France and Germany were disposed of, the fleet was rationalised and simplified and aircraft utilisation has been improved by 15 per cent, as BA has tried to sweat the assets in imitation of its ruthless and fast-growing low-cost rivals.
BA’s own low cost subsidiary, Go, was sold. That move is still debated, but Sir Rod believed it was a distraction to the overwhelmingly important core task for BA management of tackling the inefficiencies and shortcomings of the existing short-haul operations.
Sir Rod and Mr Walsh have successively adopted many of the practices of the low cost carriers. It has increasingly exploited the ba.com website for cheaper sales and distribution, and most recently has implemented a radical shake-up of its short-haul air fares with one-way all-inclusive tickets starting at £29 in an effort to drive up traffic at off-peak hours wiith low entry fares to increase load factors.
By now BA is left with three short-haul activities, the separate Heathrow and Gatwick networks and finally the UK domestic regional operation, which still seems most under threat.
The operation out of the UK regions had already been rationalised into one subsidiary BA CitiExpress, but when this continued to make losses its offering was restructured and rebranded early this year into BA Connect.
In a last throw of the dice it has become a single-class operation with buy-on-board food, and operating chiefly out of Manchester, Birmingham, Edinburgh, Bristol and Southampton in an effort to compete with the mushrooming number of low cost carriers.
Where a decade ago BA had little competition in the regions, it now faces fierce pressure from the still rapid growth of the low-cost airlines led by Ryanair and EasyJet, and including Jet2 in Northern England, Flyglobespan in Scotland, BMIbaby and Flybe.
Mr Walsh, who brought with him to BA his reputation as a tough and relentless cost-cutter at Ireland’s Aer Lingus, made clear yesterday that the days of the BA Connect regional operation are numbered, unless it can be rapidly turned around in little more than 12 months.
Mr Walsh said it still lost £20m last year and it must be profitable next year or face closure. Its financial performance had been “poor and unacceptable...We do not see it as having strategic value to the group. It provides no strategic feed (to Heathrow). It must be profitable,” he said.
The fortunes of the Heathrow short-haul network are strengthening. It is profitable, it has a modern fleet of Airbus A320 family aircraft, and to many observers’ surprise it is again finding increasing demand for its premium business class cabin, which is driving up earnings. It has 87 aircraft on 43 routes with the emphasis on high daily frequencies to serve the needs of business travellers and provide feed to the long-haul network.
BA’s much smaller operation at Gatwick remains loss-making, but a two-year programme to improve earnings by £40m is under way. Mr Walsh seemed confident yesterday, it would return to profit, although it must fairly soon replace its ageing fleet of Boeing 737s.
The operations at Gatwick are still being shrunk, and in a further move, the Amicus trade union said yesterday that 120 engineering jobs were being cut at Gatwick. Surplus properties are being disposed of, as BA discards the legacy of its earlier abortive effort to turn the airport into a complementary transfer hub to Heathrow.
Like Heathrow, BA Gatwick operates 43 short-haul routes, but only with 33 aircraft. It is now being designed by BA for point-to-point travel with a much bigger share of leisure traffic, fewer daily frequencies and a wide spread of destinations. It has recently opened several new routes including Tirana, Reykjavik, Varna and Izmir.
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Fantastic BA Pension
if your name is Rod Eddington that is.............. £108 K pension for life , in return for his 5 year stint at BA. 
http://business.guardian.co.uk/story/0,,1791037,00.html
http://business.guardian.co.uk/story/0,,1791037,00.html
Last edited by cirrus01; 6th Jun 2006 at 08:13.
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You have to bear in mind that Rod Eddington did take a quite substantial salary cut post Sept. 2001. I think he did a damn good job in steering BA through a difficult few years. Personally, I begrudge what we pay Ayling.
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Can anyone tell me one good thing Rod Eddington did for BA?
The business plan, which got us over 09/11 (Focus on Premium Cabin, New Club World and World Traveller Plus) was already under way under Ayling.
Rod Eddington sold "Go" (at a fraction of its costs to BA despite all the hype at the time) which caused an absolute nightmare for BA's short-haul operation when EasyJet acquired a 50% increase in its capacity. He also was responsible for the chronic staff shortages that led to delays and cancellations galore! He also stated on many occasions that Gatwick was a major headache for BA - so much of a headache, he could only be bothered to visit on a handful of occasions during his five years!
.......Nope! He doesn't deserve his fat pension! Neither does Ayling, but that's another story!
The business plan, which got us over 09/11 (Focus on Premium Cabin, New Club World and World Traveller Plus) was already under way under Ayling.
Rod Eddington sold "Go" (at a fraction of its costs to BA despite all the hype at the time) which caused an absolute nightmare for BA's short-haul operation when EasyJet acquired a 50% increase in its capacity. He also was responsible for the chronic staff shortages that led to delays and cancellations galore! He also stated on many occasions that Gatwick was a major headache for BA - so much of a headache, he could only be bothered to visit on a handful of occasions during his five years!
.......Nope! He doesn't deserve his fat pension! Neither does Ayling, but that's another story!
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That type of CEO pension is small compared to those at bankrupt U.S. airlines. For example, at Delta:
"...Former Chief Executive Ron Allen was forced out in 1997 but was given an eight-year consulting contract for $500,000 annually, a lifetime pension of $765,600 per year and other benefits."
http://www.ajc.com/thursday/content/...c326b0080.html
Of course, Delta is a bigger operation and loses a lot more money than BA makes <g>...
"...Former Chief Executive Ron Allen was forced out in 1997 but was given an eight-year consulting contract for $500,000 annually, a lifetime pension of $765,600 per year and other benefits."
http://www.ajc.com/thursday/content/...c326b0080.html
Of course, Delta is a bigger operation and loses a lot more money than BA makes <g>...
Controversial, moi?
Last paragraph from the article states:
That is strange so was mine but they tell me I have to accept less. How confusing.
A BA spokeswoman said Sir Rod's pension arrangements were contractually agreed when he joined the airline....
Originally Posted by bealine
Can anyone tell me one good thing Rod Eddington did for BA?
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I liked Rod!
He came to Gatwick a little more often than bealine suggests and took the trouble to call me by name on several occasions and replied to my emails. Damn good eyesight to read my name badge quickly or damn good memory.
Ayling on the other hand.......
He came to Gatwick a little more often than bealine suggests and took the trouble to call me by name on several occasions and replied to my emails. Damn good eyesight to read my name badge quickly or damn good memory.
Ayling on the other hand.......
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A pensions of £108k is consumate with the salary-earning level of senior executives. Although a socialist mindset might suggest that is particularly unfair to the employee group, the millions in value maintained for the shareholders for whom he ultimately worked pale in comparison.
Why shareholders should gain so much at the pilot's expense is the question that should be posed, not over what is a matter of pennies to the plc as a whole on one person's salary.
Why shareholders should gain so much at the pilot's expense is the question that should be posed, not over what is a matter of pennies to the plc as a whole on one person's salary.
Paxing All Over The World
This notice is dated 7th June in the on-line IT journal silicon.com
BA launches IT recruitment drive
Project managers, business analysts and web experts wanted in Newcastle.
By Andy McCue
Published: Wednesday 7 June 2006
British Airways is looking to boost the IT headcount at its Newcastle information management operations in the resurgent airline's first major recruitment drive since the post 9/11 collapse in the travel industry.
Despite a company-wide senior management cull at BA, the airline will be increasing the 280 headcount in Newcastle by recruiting 30 staff in a variety of high-level roles ranging from project managers and business analysts to web design architects.
BA CIO Paul Coby said the airline is looking for IT excellence and business understanding and can offer recruits the opportunity to build their career there backed by further training and "up-skilling".
I have not quoted the full article.
BA launches IT recruitment drive
Project managers, business analysts and web experts wanted in Newcastle.
By Andy McCue
Published: Wednesday 7 June 2006
British Airways is looking to boost the IT headcount at its Newcastle information management operations in the resurgent airline's first major recruitment drive since the post 9/11 collapse in the travel industry.
Despite a company-wide senior management cull at BA, the airline will be increasing the 280 headcount in Newcastle by recruiting 30 staff in a variety of high-level roles ranging from project managers and business analysts to web design architects.
BA CIO Paul Coby said the airline is looking for IT excellence and business understanding and can offer recruits the opportunity to build their career there backed by further training and "up-skilling".
I have not quoted the full article.
Too mean to buy a long personal title
Major change in baggage policies announced
After months of speculation, rumour and argument (on Internet BBs, at least 
), and the obligatory missed deadlines, the new baggage policies have finally been announced:-
), and the obligatory missed deadlines, the new baggage policies have finally been announced:-
New simpler baggage policies - Major changes announced
British Airways is introducing changes to baggage policies to make them easier for passengers, reduce queues at the airport and to bring them in line with UK Department for Transport recommendations and requirements of the UK’s main airport operator, BAA.
The new policies will bring changes to hand, checked and excess baggage allowances and will be phased in from early July 2006 across the airline’s global network.
Hand baggage allowances … changing from 5 July 2006
The hand baggage policy will be the first to change from 5 July 2006.
All passengers will be able to carry one standard-sized bag and one briefcase, laptop computer bag or equivalent on all flights.
The maximum size of the bag, 56cm x 45cm x 25cm (22in x 18in x 10in) has been set in line with the UK Department for Transport recommendations. Passengers must be able to lift their bag unaided into the aircraft overhead locker.
The briefcase, laptop computer bag or equivalent must fit under the seat in front.
Free checked baggage allowances
A single allowance system based on the number of bags that can be checked in will be introduced from 11 October 2006.
> For any connecting journey, the most generous allowance will apply.
> Passengers will be able to carry one piece of sporting equipment free of charge in addition to their checked baggage allowance.
> A maximum bag weight of 23kgs (50lbs) will apply to all bags.
*World Traveller passengers travelling to or from the US, Canada, Caribbean, Nigeria, Brazil and Mexico will continue to be allowed two checked bags in line with the local government regulations.
Excess baggage charges
Excess baggage charges will be standardised across the network from 11 October 2006.
All baggage in excess of free checked baggage allowances will be charged at a fixed fee depending on the length of the journey.
From 12 July 2006, passengers who pre-pay online for their excess baggage will receive a 20% discount on airport charges.
Where passengers are transferring flights, a single charge based on the longest flight will apply.
Maximum weight and size
British Airways will not accept any item of baggage that weighs more than 23kgs (50lbs) or oversized items exceeding 2.4m x 0.75m x 0.75m (94in x 29in x 29in).
Advance notification is required 24 hours before departure for exceptional items that weigh between 23kgs - 45Kgs * (50 - 90lbs) and which cannot be repacked e.g. musical instruments, electrical wheelchairs, some sporting items, TV news cameras, commercial spares.
Pets
British Airways will no longer be able to carry pets as baggage. In future, these will only be carried as cargo.
British Airways is introducing changes to baggage policies to make them easier for passengers, reduce queues at the airport and to bring them in line with UK Department for Transport recommendations and requirements of the UK’s main airport operator, BAA.
The new policies will bring changes to hand, checked and excess baggage allowances and will be phased in from early July 2006 across the airline’s global network.
Hand baggage allowances … changing from 5 July 2006
The hand baggage policy will be the first to change from 5 July 2006.
All passengers will be able to carry one standard-sized bag and one briefcase, laptop computer bag or equivalent on all flights.
The maximum size of the bag, 56cm x 45cm x 25cm (22in x 18in x 10in) has been set in line with the UK Department for Transport recommendations. Passengers must be able to lift their bag unaided into the aircraft overhead locker.
The briefcase, laptop computer bag or equivalent must fit under the seat in front.
Free checked baggage allowances
A single allowance system based on the number of bags that can be checked in will be introduced from 11 October 2006.
FIRST, Club World, Club Europe and World Traveller Plus
Passengers will be able to check two bags into the aircraft hold free of charge.
World Traveller*, Euro Traveller and UK Domestic
Passengers will be able to check one bag into the aircraft hold free of charge.
> Infants will be allowed to check one bag, plus a collapsible baby buggy, into the aircraft hold free of charge in all classes on all routes. Passengers will be able to check two bags into the aircraft hold free of charge.
World Traveller*, Euro Traveller and UK Domestic
Passengers will be able to check one bag into the aircraft hold free of charge.
> For any connecting journey, the most generous allowance will apply.
> Passengers will be able to carry one piece of sporting equipment free of charge in addition to their checked baggage allowance.
> A maximum bag weight of 23kgs (50lbs) will apply to all bags.
*World Traveller passengers travelling to or from the US, Canada, Caribbean, Nigeria, Brazil and Mexico will continue to be allowed two checked bags in line with the local government regulations.
Excess baggage charges
Excess baggage charges will be standardised across the network from 11 October 2006.
All baggage in excess of free checked baggage allowances will be charged at a fixed fee depending on the length of the journey.
From 12 July 2006, passengers who pre-pay online for their excess baggage will receive a 20% discount on airport charges.
Where passengers are transferring flights, a single charge based on the longest flight will apply.
Maximum weight and size
British Airways will not accept any item of baggage that weighs more than 23kgs (50lbs) or oversized items exceeding 2.4m x 0.75m x 0.75m (94in x 29in x 29in).
Advance notification is required 24 hours before departure for exceptional items that weigh between 23kgs - 45Kgs * (50 - 90lbs) and which cannot be repacked e.g. musical instruments, electrical wheelchairs, some sporting items, TV news cameras, commercial spares.
Pets
British Airways will no longer be able to carry pets as baggage. In future, these will only be carried as cargo.
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Bloody ridiculous changes. 23kg limit per bag? Where's the flexibility gone these days? What was wrong with 32kg?
Utter disgrace (and this comes from a BA supporter)
Jordan
Utter disgrace (and this comes from a BA supporter)
Jordan
