Could British Airways really go bust or not?

[SASless]

Can BA go banko?

Absolutely....look across the pond at how many airlines have gone out of business due to de-regulation alone. Why should the British/European airlines be any different. The question is who folds their tent first?

Add in the huge downturn in passenger traffic and hi-value fares, the increase in fuel prices coming again and the stage is set.

Looking at the BA wages....ya'll think back to Eastern Airlines and think why they went bust!

[Bruce Wayne]

The chances of BA reaching the point where Chapter 11 is the only option are pretty low though.

Yes pretty low indeed as Chapter 11 is applicable to reorganization or rehabilitation of companies incorporated under the federal jurisdiction of the United States Code.

BA Is not under the jurisdiction of United Sates Code it would be subject to administration under UK Law.

As such, the chances of a UK company gaining bankruptcy protection under United States Code is a very low possibility.

Any airline can go bankrupt, BA is not immune, the only airlines that continue to be going concerns when economically unviable, without private funding sources, are those that receive government subsidy.

76% of the UK GDP is generated by "service industry"; The City of London generates 20% of the UK GDP; 30% of the UK GDP is generated in London. Banking and Finance accounts for a large portion of the GDP of the UK.

Unfortunately, the UK has an administration that has no fiscal confidence from much less it's own population but also Europe and wider.
(ref: Markel & Sarkosy et al on UK Economic Policy)

Until there is a seismic shift in economic policy of the UK administration, and let's face it there is little trust in the fiscal policies of New Labour, banking and finance will remain unstable in the UK as such the repercussions to the aviation industry are that we will see yet more instability and possible diversion of the industry to other European cities.
(ref: New Labour's increase of ADP while other European states are reducing or removing APD)

[parabellum]

Who would have thought Swissair could ever go bust? The question I would ask is, if the airline has turned in record profits for the last few years then where has all the money gone?

[sky9]

Strangely enough they were tipped as buy in the Business section of the Telegraph yesterday.

[Joetom]

Forget upgrades, downgrades are here to stay -Times Online
.
Open skies and LCY-NYC operations, can't be long before we see a press item on these two Lemons !!!
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However, it will save some cash.

[Ancient Observer]

It will be more difficult than that to survive

For BA to survive, it needs to convince the UK's CAA that it is, and can remain, a viable entity. Well before the banks/shareholders get to pull the plug, the UK's CAA can and will pull the plug. I don't know the specific legal words behind the CAA powers, (where's our flying lawyer?) but they decide first.
Interesting times.

[ItsAjob]

I don't think it is fair to blame the labour costs because of a shortfall in the fuel betting.

And it is idiotic to say that if profits go down then so should costs. Costs should always be focused at being as low as possible in good and bad years.

Front line staff being attacked again to hide management mistakes, when will it ever change?

[Joetom]

Time to Say Goodbye
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The above link was sent from an AZ employee to a BA employee mate of mine, like the old saying, he who laughs last !!!

[TheKabaka]

BA can be a profitable company. Revenue is very weak but will slowly recover. If it can restructure its costs in a way that has never being achieved before, and get relief on its pension responsibilities (i fear a closure of NAPS to future accrual). Then it will be able to borrow/rights issue to provide sufficient cash for the downturn.

It will find it hard to borrow if these costs are not restructured, and then the future is less certain.

Should BA emerge from a recession leaner more efficient it has the potential to be stronger than ever, I hope this occurs and today voted for my share of the pain!

[Xeque]

BA go under? Do me a favour!

Just look at the historical pedigree - Imperial Airways, BEA, BOAC, onwards and upwards to British Airways. For BA to go under is to finally accept that Britain is just another minor member of the European (French and German lead) federation.

BA should come out of this a leaner, meaner and (hopefully) a more passenger focused operation. One good thing that is immediately obvious is the realisation that the flawed business model that supposes that First and Business Class is the profit provider has been shown to be so wrong - so very wrong - so stupid and is finally out of the window for good and all.

It's time to realise that giving your all to a dozen or so pampered pax up front and subsidising that cr@p at the expense of 200 or more crammed cattle-like in the back is no longer acceptable to anyone. The real money is to be made in one-class travel; with the majority of passengers being given a measure of comfort that hitherto has been denied them by 'bean counters' whose fault all this is.

Here's your chance to take the world by storm BA. 38 inch seat pitch, re-designed reclining seats that to do NOT take away space from the pax sitting immediately behind, 2-4-2 configuration throughout the aircraft and (whilst you're at it) retire those out-dated 744's.

Set a standard fare that covers real costs and DO NOT DEVIATE FROM IT!! That's the fare - these are the costs that the fare covers for your sector(s) - take it or leave it.

The cream on the top will come from in-flight value added services not least the sale of booze, enhanced IFE and enhanced catering (menus)

It's not rocket science. Your forebears - the passenger shipping companies providing line services across the world - discovered this 50 years ago. Why is it taking you so long to catch up? Multi-class aircraft are dead. Long live one-class.

And don't forget. BA's proposed LCY to JFK business service using A318's is still a 'one-class' service.

[George Zipper]

Those who are slagging how BA treat their economy pax - who are you comparing them to?

BMI - you can't even get a drink of water without buying it from the flying tuckshop.
Easyjet - all que up according to who paid the premium for 'early' boarding. Refreshments - see BMI.
Flybe - see BMI.
Ryanair - never ever ever again.

Have you really reviewed the pricing properly? BA are often the cheapest on many routes! And pax care? I'd fly in and out of T5 and with BA any day. Believe me, I have expereienced travelling on all sorts of routes with many airlines and there's a reason why I chose BA as often as possible. Price is a big factor but the service is another.

Good luck to all at BA.

[ExXB]

APD - Not so bad via Europe

These amounts:

APD Charges.

Band A (0 - 2000 miles from London)
Includes: Europe, Algeria, Greenland, Libya, Morocco, Tunisia

Currently
Economy cabins £10 Premium cabins £20

November 2009
Economy cabins £11 Premium cabins £22

November 2010
Economy cabins £12 Premium cabins £24

will also apply when the punter buys a separate ticket to Amsterdam, Paris, Frankfurt or where ever and another ticket on to America or Down Under.

A family of four to OZ will pay £340 in tax in the back for a flight to Sydney. Why wouldn't they go via Europe?

Now has the chancellor shot BA in the foot?

[Dan Air 87]

I am becoming quite amused by the latest rant from Virgin. Its one thing to come up with a suggestion of BA's demise (which I hope that BA stay afloat and kick VS where it hurts) but let's see some transparency with Virgin's profits and turnover. Let's be able to compare like with like rather than having Virgin hide behind the veneer of this privately owned company.

If VS have got nothing to hide then why don't they show us the true financial picture of the airline to justify the claim? Mind you I suppose that Virgin are becoming very experienced with demise of airlines. Just look at Virgin Nigeria and Virgin Express.

Ooops have they forgotten about those already?

I am still using BA on Long haul flying and will not fly with anyone else.

[nigegilb]

The APD tax rises are truly eye watering for long haul travellers. I don't think think this Govt gives a stuff for the airline industry. Trouble is, Cameron is so ensconced with the environmental lobby, I don't think it will get any easier with a change of Govt. Time for all the UK airlines to come together and quit the bickering. A UK only massive increase in taxes, whilst leaving EU airlines untouched is frankly, ridiculous. We shouldn't be squabbling amongst ourselves, we should be lobbying hard, damn hard, as a united body with common purpose.

[Heathhurn]

BA Attitude to economy class

What good common sense is expressed by Xeque. I travel regularly longhaul economy class but avoid BA whenever possible. American Airlines is my carrier of choice for economy travel. the seats are wider, legroom is generally greater and there is a good chance of your hold luggage arriving at the same time and destination as yourself. If BA improved their economy product I would happily fly the flag even if it was more expensive than their competitors. I however am not prepared to paythe high premium that BA currently impose to travel in a comfortable manner.

[apaddyinuk]

BA Can go bust.... as can any company that works for profit.

However the figures just do not add up! I studied economics for a long time and so much of what we are being told within BA is just daft! Yes BA are hurting at the moment but not to the point of impending doom and this "Fight For Survival" that BA is harking on about is no more about survival as it is about greed!

Our management are still going to receive bonuses, our CEO is still totally over payed, we are still planning on introducing brand new longhaul aircraft, we are still going to spend a fortune refitting all the First Class cabins, we are spending a fortune at present replacing a faulty inflight retail machine which we spent a fortune on a few years ago, money is still being pumped into OpenSkies which is clearly failing in its promises, BA is still intend on launching its A318 LCY-JFK service despite the market totally drying up etc etc etc!

If we do go bust it will be because of the greed our management....asking staff to give so much will not be the saving grace of this airline!!!! It needs to concentrate on being an airline and not a bank for senior managers!

[Joetom]

Quote

APD - Not so bad via Europe

--------------------------------------------------------------------------------

These amounts:

APD Charges.

Band A (0 - 2000 miles from London)
Includes: Europe, Algeria, Greenland, Libya, Morocco, Tunisia

Currently
Economy cabins £10 Premium cabins £20

November 2009
Economy cabins £11 Premium cabins £22

November 2010
Economy cabins £12 Premium cabins £24

will also apply when the punter buys a separate ticket to Amsterdam, Paris, Frankfurt or where ever and another ticket on to America or Down Under.

A family of four to OZ will pay £340 in tax in the back for a flight to Sydney. Why wouldn't they go via Europe?

Now has the chancellor shot BA in the foot?

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............................................................ ..................

I think the only way to avoid it will be no hold baggage or reclaim hold baggage at euro airport and continue travel plans, and think ticket will need to be LHR-FRA then FRA-SYD for example, the UK gov needs all the tax it can get, just look at the rate of increase in these charges over the next 18 months, the APD will just increase more as time goes by.

[Bruce Wayne]

Whilst many European countries are reducing or in some cases removing APD, the British Government is increasing it significantly.

The recent survey results of mid-long haul passengers at major UK airports showed that a significant majority of passengers would have preference in using alternative European hubs as an alternative to the increase in APD.

[wobble2plank]

Sir Richard Branson has rubbed salt in British Airways’ wounds by declaring BA practically worthless, and urging the government to resist any attempts to bail it out.
Branson’s comments will incense BA management, which this week will hold vital talks with cabin crew and ground staff over pay cuts, lay-offs and changes to working conditions aimed at saving £100m a year.

Made me chuckle, also makes me wonder how long it will be before Mandelson makes Sir Dickie master of the Governments spin machine!

Perhaps the bearded one should get his own house in order first? The 'creative' accounting of Virgin with its 10 month 'profit' was a classic Sir Dickie move. Oddly enough the Singapore Airlines figures didn't quite show the same profit or valuation? Wonder why? Also VA seem to be in the midst of a rather drastic flight crew and cabin crew cull themselves which, proportional to the size of the company, is somewhat more drastic even that BA's proposed cuts. All classic bearded woolly pulley wearing ones spin.

The best was the 'we were considering buying BA when the share price dropped below 100', that stands with the 'give Concorde to us, we'll fly it if BA won't!' and that was after Airbus had pulled their engineering support for it! There was no way it was ever going to fly again without an engineering sponsor and Branson knew it. Public weren't to know that though and bought it hook, line and sinker. Branson is deeply in the poo and his creditors have recently given him a stay of execution. He needs to pull a rabbit out of a hat and it seems he is trying his best here.

Interesting few months ahead I feel.

BA have, rumoured, the financial backing to take them over this period. The caveat, however, is that they sort out the militant Cabin Crew to prevent the customer service mess that was the winter snow diversions from ever happening again.

This time I think the company is playing very, very hard ball.

[silverstreak]

... will BA really go bust... Blah blah blah...

Does anyone really care (except employees of BA...) and the die-hard BA fanatic, of which that number is dwindling if we are to beleive the hype about premium travellers deserting BA.

Times change, businesses must do to, and if youre caught napping thats your tough luck. If youre not fast, youre last and BA has been caught with its pants down (well, wee willie anyway)

For the last 3 or 4 years, BA hasnt 'stood out' in the crowd, and has just blended into the community. The sparkle has gone, and its just another airline... Sorry but thats how it seems, not just to me but to quite a few BA employees and passengers alike.

As Alexander would say, ''Simples''