In my working life the companies I worked for went bust on three occasions. I wouldn't wish it on anyone!

Suddenly, the offices that had been full of activity were empty and the aircraft were all close parked on every bit of tarmac. After a few months out of work many of us were prepared to work for the equivalent of our social security payments just to get back into the job.


Do not think that this cannot happen to BA.

A financial point will come, if the cabin staff and groundstaff do not accept nominal pay cuts..or unbelievably call for strike action...that it will be compulsory for the Board to place the company into administration.

"BA 2010" will then be started with everyone having to interview for the new jobs at the new "take it or leave it" rates. The days of the senior cabin crew earning pilot's pay will then be over. The payment of anything other than salary and basic allowances for the pilots will have gone.

My guess is that February 2010 will be the cruch time.:(

What baffles me about the adverse criticism of BA that I read on this website as well as others is why do people fly with BA more than once if they are so awful? Perhaps it is because BA is the only one to serve the destination you require. If so, ask yourself why they provide a service to an unpopular destination. If it was profitable, would not the bearded wonder have cherry picked it long ago? The other answer is that the adverse critics are either full time miserable gits or the employees of another airline. For those of you who are professional airline employees, it is probably because you failed to get in or know you never would, i.e plain jealous. Perhaps you work for Ryanair!

Ok , straight up , I am an ex BA captain , left 5 years ago after 10 years service , because I was 55 and had to retire ( at the time - not now of course ) left with the proverbial bitter/sweet taste that is BA . Infuriating ( TOO BIG etc ) but some of the greatest people I ever worked with , so also very enjoyable . Right , that is off my chest ,now...
I left in 2004 with a salary of 55k so the ' average 'of 107 k is actually the top increment of 24+ years service , and BA are trying to get these elite few to take early retirement - smart move.
As usual , the press / Branson , whatever , distort the facts - quite normal with their 'tall poppy' syndrome . RB will one day be hated as much as GB by the British public - just read some of the blogs about Virgin Rail. But he will not care - he will win. He knows Brits are gullible.
He has fed off the most profitable routes available and never pioneered a route out of UK (apart from Vegas which explains a lot ) and has only ever provided a service to the fithy rich and vulgar to their fleshpots. Never actually tried to provide a service to the British people , like trying to serve a cooked breakfast to 144 peeps between MAN and LGW with about 20 minutes in the cruise , probably failing to perfect it , but trying nonetheless.
There ARE 2 weaknesses with BA and ONE is the amount the CC are paid without consistency in their performance , and TWO , the number of 'Middle Management ' who do not give a toss .
You can read every day about the aggrieved passengers on BA , but if you dig deep you can also find millions of contented ones , who paid a pretty fair price ( in Economy ) , checked in at the now-wonderful T5 , had an on-time flight to their destination wherever in the world , and have no axe to grind , but we never hear from the ones who get what they paid for - do we ,
?
Sure , it does go wrong , and Heathrow can be bloody frustrating ( to passengers too ! ) but if BA disappeared tomorrow it would not be long before the public got really pissed off .
Virgin Airways ? Perish the thought , and I speak for millions.

Why? There are plenty more long haul options than flying with the bearded one, and BA's short haul operation is moribund, as is the rest of the operation if they don't do something about it, and fast.

A long haul operator out of Heathrow is what they should aim for now - nothing more, nothing less . . . . .

All this talk about whether BA will survive...or not.
I expect it will, however, it will need to trim down considerably, the pilots will more than likely lose much if their beloved pensions, the CC, if they persist in their hard-headed ways, will be dismissed for cause and new ones hired...and the eventual outcome will be quite a profitable operation, serving fewer destinations.

Those folks who are demanding better conditions at FR had better take heed, if BA can strong-arm their employees to lesser conditions, FR employees stand absolutely no chance whatsoever of improving theirs.

In both cases, there are winners and losers.
Winners...management, shareholders, customers.
Losers...employees and suppliers.

Slim and trim is the watchword of todays airline industry.
Fat and overstuffed...dead as a doornail.

Like it or not.

What an interesting socialist point of view.
Have you ever read of the lifestyle enjoyed in the Kremlin in the 1930s or, indeed, studied the behaviour of any socialist in a position of authority?

Now Here Is a Laugh!
 

Guess you never made a run to Lagos then!

I know things change over time but Lordy fellow....the Virgin crews I rode out of Lagos were very good news! Far better than the BA!

kotakota,
Well done getting a command within 10 years - took me 18, but I was always crap :}
What a good summary.
I have worked for several outfits but still keep an eye on BA. There are times when I could walk into the CE's office (whoever he may be at the time) and shake him. I want to see BA succeed. I was on secondment to another outfit in the eighties when King & Marshall turned the passenger appeal around from zero to hero. We heard from our premium pax (in my other airline) and K&M did a great job. (Would've hated to work directly for old King but they were an effective team).
Is Willie posturing as the CC think? I don't know but my gut feeling is that he is not. What BASSA has to consider is: "Will the gumint bail BA out or not?"
Who knows? (Been done before in a cowboy film :))

The problem I think with BA personally is there loosing money in the Premium side of things, thats were the dosh is made, I recently flew to Frankfurt, 757 was packed to the brim in economy and the return on the A319 was full BUT the Premium section was almost fully empty.

BA will if they cant help it go bust, but the govement will obviously help them out of it, Its the National Carrier and If someone has the figures its like a 50+% of Heathrows movements and that makes £billions GBP for the economy per year.

UK

There's no such thing anymore actually. BA have the pension deficit from Hell and a cost base on cabin crew coupled with a militancy rare in modern Britain that F***s the passenger over a lot when things go wrong. I dated a BASSA apologist once, it was quite revealing.

If BASSA strike for a prolonged period, BA may fall, and UK aviation will be all the poorer for it, for I can't see a British airline ever serving such a network again starting from scratch, certainly not Virgin.

Leahman Brothers and GEC fell, who knows who may be next. I personally think they'll be taking the new B777-300ERs as planned, and then the B787s and A380s.

In short the answer is Yes they can the likelihood is NOT as there would be some type of Assistance offered which would ensure it doesn't happen.

Based on the media article 40% of the Premium passengers were bankers who aren't going to be flying anywhere for a while. There isn't another group who can easily fill that gap in the medium and I doubt in the long term at the prices companies were willing to pay. There goes a huge cash influx.

Ultimately it will come down to the amount of cash they posess as there is a figure reached when bankers start to get worried and suppliers reduce their credit from 7-8 weeks down to 1 week.

9/11 changed the marketplace and while post 9/11 the industry boomed there was a clear warning that the slowdown for 1 year after that day was the time to look at what you were doing and slim down accordingly to match revenue and costs.

I believe in 10 years time people will look at the Salaries people were on now and wish they could earn that amount.

Severely doubt it
 

As an ex-BA staffer now working as flight deck in the loco sector I have to say I find this thread unrealistic and depressing. I don't think BA will go bust, I do think their problems are no different to KLM, Lufty etc right now and they're still one of the very few global supercarriers in terms of routes, fleets, terms and conditions, training, service excellence and capacity to innovate. The current issues will only lead to the emergence of a stronger and fitter BA and that is no bad thing. However I do believe BA has made some very bad business decisions at a strategic level in recent years.

1. Its focus on high yield transatlantic is in my estimation flawed. BA always needed to play in all market sectors.
2. The sale of GO - I opposed it at the time and I oppose it now. BA had the makings of a serious low cost operation there and could have remained dominant and profitable on shorthaul via GO. They also wouldn't have had to renegotiate mainline employment contracts if they had permitted Go to gradually become BA shorthaul.
3. They continually failed to identify opportunities to identify into new business areas to boost revenue - e.g. The wheel. I believe at one time BA were making £50m a year profit from operating this and generating millions more in brand impact. I also recall at one time they had requests from around a dozen cities worldwide who also wanted their own version. 10x£50 million is £500m profit plus huge global brand impact, but the management said it wasn't core activity and hence it was ditched.

Flying into Manchester today where my Father was BA cabin crew in the seventies brings home the appalling lack of BA tail fins there now compared to then. BA should never have abandoned the regions and adopted a fortress LHR mentality. If they hadn't allowed it to happen, the world and indeed our profession and industry wouldn't have to suffer the likes of Michael O'Dreary and his appalling airline.

There are few companies in Britain that can lay claim to being world leaders - BA, BAe and Roll Royce are the only ones we have in aviation, I wish them and their staff well despite now working for a rival airline.

Desk-pilot

To the staff at the coal face (pilots, CC, check-in, customer service) I think you do a great job. You need to take it from a frequent traveller like me who can benchmark airlines in terms of price/value/service.

I've flown with most and like I've already said, I'll go BA any day.:)

i'd be very disappointed if BA went bust, and i hope to **** (< insert creative word where the *s are..) that the government would step in, if they can bail banks out then they can bail out an airline that represents Britain.

A reality check please. Yes anything is possible as history has showed, however, BA is a strong company and this is only a glitch. Do all airlines need to improve their standards, yes. The problem with airlines such as BA who make huge profits when times are good, the attention to detail is forgotten and they get sloppy - yet again large companies do not learn lessons from past recessions. (where did the previous years £750 million profit go?)

As for Virgin, they do a good job, offer a slightly different service and keep BA 'honest'. Without them do you think the standard and service on long haul services would have improved? As for Virgins profits, whichever way you look at it, at least they made a profit through identifying problems ahead and did something about it.

As for wild rumours (Virgin making 10 million loss per month) back up what you write. Don't just pick a number for shock sake, it doesn't help anyone.

We're being told there are the signs of 'green shoot' in the economy. Hopefully all out there will survive and emerge stronger - lets not talk ourselves into a P45

Without dishing your otherwise excellent post, I do not feel that it is Virgin who keep BA honest because after all, BA dont keep Virgin "honest" if Virgins recent results are anything to go by. As BBC World has recently advertised, Virgin Atlantics success is based on Media Spin/Hype and not so much on Business Acumen! LOL!

Virgin compete on a very limited number of routes, indeed they are key routes and yes they compete with BA directly more then any other single carrier but BA still has a huge number of high profile and high standard competitors worldwide which it must fight against! I think these airlines have as much influence on BA's standards as any other!

Also don't be fooled by RB's pious approach. The only reason that VA didn't get right royally screwed along with BA and the other airlines over the price fixing scandal is that he went running to teacher first.

Hi Paddy

No they won't

Less than nearly all other FTSE 100 companies.

Which will operate routes for a lower cost than the current fleet (747/767)

We need to be offering equivalent or better product to our customers. If BA stands still it is really going backwards.

Possibly, lets hope it is an improvment

No it's not

It seems a large bank has bought a number of seats on each service making it a viable route.

I think alot of your info is from BASSA and therefore fundamentally flawed, no matter how long your economics studies took!

I have always hated the Stellios, O'Leary & Branson approach to competing. They don't just want to compete with a fair share of the market, they want to see the destruction of other airlines. What these social psychopaths seem to forget is that it is not just the CEOs and Directors that will suffer, but thousands and thousands of ordinary working people with mortgages, families etc.

If BA went bust how many people would this effect? Not just employees but suppliers as well?

These so called Entrepreneurs have little sympathy for the ordinary worker and are only concerned about feeding their own pockets and egos.

Now I am not saying that Governments should continually bail out Companies that are failing, but please stop the hatred of other businesses as they employ ordinary people!

As an example, I saw something like "Goodbye SkyEurope" written on the side of a FR aeroplane the other day.

I think that is in really bad taste and really is Machiavellian!

Short memories
 

Two words: Laker Airways

Well that BA were the cause of the demise of Laker is contentious, it was in a very different, regulated, environment (BA were government owned then), and it still doesn't make it right.

What about the use of their computer systems to steal Virgin Premium passengers which they lost the court case about in 1991.

As i say, doesn't make it right!

Hmmm. Let's see now.
Take the example of a national carrier with a huge network of established routes and a 'gotcha' hold on movements in and out of the nation's main airport.
It (said airline) decides to go with a business model that utilises 'one-class Standard' A330's and B777's providing unparalleled comfort to the majority of it's customers (see my previous post #33) and a few 'one-class Premium' A318's for those whose employers are prepared to foot the bill and which can be routed to suit demand.
Each aircraft, in whatever format, is its OWN INDIVIDUAL COST CENTRE meaning that customers pay what it actually costs to operate said aircraft.
Wow!! Radical! Well, maybe but common sense - yes.
Get rid of the company 'bean counters' and other sundry science fiction experts and employ some good, old-fashioned, experienced bookkeepers and you could have an airline that is an absolute winner even in today's 'difficult' times.
And to the guy who called me a 'socialist' earlier - please read carefully and assimilate.

So here is the thing - BA was created out of a nationalised industry, given every, at times unfair, opportunity to succeed. British Caledonian was dragged kicking and screaming into the BA fold. Some people did quite well out of it - flightdeck especially, but at least 2,500 people were given a P45. Dan-Air; well there is no need to open that old wound, but it certainly was not all fairness on that deal. British Airways do not deserve yet another government bail out, purely on moral grounds alone; King and Marshall did for quite a few redundancies, Ayling and his internal security ubermensch and then Eddington selling off virtually eveything that wasn't bolted down have left a company with very little fat to trim.

If BA get a bail out, then any start up that appears in the next 2 years deserves equal treatment - after all the entrepreneurs are creating jobs for the ordinary people to be able to feed their families and pay their mortgages. Or am I missing something here?

I think BA got into bed with AA to start flights from STN for one reason.
The AA STN-JFK route was only set up to get rid of EOS and MAXJET :=.

So why bring it up then??

If they're all at it then it becomes the norm . . . . however BA's track record is their certainly more conniving / scheming when it comes to trashing other airlines. Just because they don't paint it on the side of their aircraft, or bad mouth in the press, doesn't make them out to be saints. Their just as bad as everyone else . . . if not worse!

I agree BA killed Laker Airways, and yet that was in Winter of 1981, some 28 years ago. They also ( as BOAC ) forced SAS out of Prestwick in the 1960s and my Dad still rants about this.

There are not a hold lot of people responsible for Laker's demise still running BA anymore, even Sir Freddie himself is now gone.

Don't visit the sins of the Father upon the children. Ba has had it's fair share of howlers of late, but there's a whole load of good people in there who deserve a good outcome I think.

Don't kid yourselves
 

BA could go bust and the government won't be able to save them. In their present form at least.

And as for VS stepping in, forget it. VS only compete on the routes where they can cream off something. There is no such thing as offering a network. hell, VS can't even commit to one of the alliances, they just want the ability to play other airlines off against each other. Thing is they only profit from that approach because of their relatively small size.
I thing VS is at much more of a risk than many realise. I think that's borne out by beardy's recent misleading financial statements.

Back on BA, I think they have decent staff and deliver a decent service to all their passengers. Maybe its just me but I don't need tarted up flight attendants to make my flights enjoyable. BMI have played this card too in the past and it is just obnoxious. Admittedly some people are taken in by it, but obnoxious just the same.

Sir Michael has just got his comeuppance in the amount of money that he expected to screw out of LH and Beardy's time of reckoning could be coming soon.

BA management and staff have made plenty of mistakes in the past adversely affecting both the companies health and sorely testing passenger loyalty.
I think we can all agree on just one thing. There is no room for any further mistakes.

CaptJ ; You should have the rank of 'admiral' very well stated and an accurate view on our aviation times.

Virgin facts
 

49% owned by state controlled, Singapore Airlines.
Highly linked to Star alliance codesharing with Air China, bmi, Continental, Singapore, SAA, US Airways & ANA. FFP with Air New Zealand & SAS.
Lost major part of $73m in 4th Quarter. Pay freeze, 600 jobs under threat, dropped Mumbai due competition. Bought daily LHR slots off Air Jamaica for $10m but has never operated them - leasing them to Blue1 of the Star Alliance.
On launch of Virgin Nigeria, Branson said “Virgin Nigeria will be a new airline for Nigeria in many ways. We aim to create the best airline – not just in Nigeria but in the world – based in Africa.” Virgin invested $24.5m for 49% of Virgin Nigeria. Virgin Nigeria lost $82m in 2006/7. Virgin described by Singapore CEO as " underperforming" & is up for sale.

Good post CaptJ -spot on

Yes BA can go bankrupt. It all depends on the burn rate of its cash.
All BA problems are self inflicted.
The present problem for BA is the death of First and Business class, the company having invested heavily in these. In a downturn people and companies make cuts and luxuries are first to go.
By concentrating most operations in London, they have left a large gap in other parts of country.
This have been filled by Ryanair and Easyjet who have approx 400 aircraft between them. The sale of GO can be seen as a disaster as it would have been money making even in a downturn. Both easy and ryan are making profits. Ryan only made a loss due to its holding in Aer Lingus.
Vs is not making money at present according to Singapore airlines.
Making a profit is the only way a company can continue in business, Alitalia excepted.

Torygraph: .......Mr O'Leary said he had abandoned any thoughts of retiring. "This is so much fun. I love recessions. You get the chance to kick the ---- out of everybody," he said. "It's boom times that are boring."

The Ryanair boss also pilloried Virgin founder Sir Richard Branson, who claimed over the weekend that British Airways could "go bust".

"It's like a little chihuahua barking at a dying labrador. Nobody cares," said Mr O'Leary.

You can still make a profit but go bust...........Polly Peck with Asil Nadir was an example, course this was fraud but still reported profits.

IF a company used all its cash to invest in new assets BUT it was a year or two before those assets would generate any cash then it could easily go bust. Especially if the banks decided not to let it borrow anything to fund short term cash flow situation.

Its also possible to continue to show losses for a couple of years BUT generate positive cash flow and stay in business.

Cash is King where as profit or loss can be manipulated.

BA needs to look where it can increase its revenue flow from. That’s what BD is doing they are looking at the daily operation and seeing where they can increase their revenue flows. Thus increasing company cash flow.
This is where FR has done very well by increasing their other sources of revenue into the company. Such as your internet check-in and checked luggage.
BA can’t do that by they could look at ways to improve the positive flow of cash. It’s all very Willie in water world saying cut cost. But that has to be balanced out by increasing revenue too. And selling Club seats at a fraction of the price might increase customer footfall for BA, but will they pay for duty free on the flight have XS luggage or want to upgrade to first.
Plus what is the yield of some these cheap tickets next to nothing, so you are hoping for those customers to spend somewhere else in the company.
It’s a tricky one to call.

CaptJ and fgmc more or less exactly reflect my views, and I will only add that I am beginning to find Branson's behaviour repugnant. The more he speaks the more he seems like a complete baby. I am overseas at the moment and have seen Branson every half an hour on US financial programmes stating that BA is worthless, whilst only a few days earlier I was told that VS's position is getting desperate, with heavy losses each month at the moment. The impression I got was that VS were the ones likely to go bust and certainly not BA.

Yes, BA could go bust, but it is a good airline with many bilateral routes, and many ex-bilateral routes that have matured very nicely and are still decent earners for the airline. The flight crew are, as a group, excellent. Cabin service is good, and there are a lot of extras thrown in free with BA. Frankly BA's modus operandi is very good and I hope they don't mess about with it.

The problem with BA lies in its management and management culture, and this (partially) drummed-up (by WW) crisis may help improve that situation.

I think buying shares in BA might be a good bet, because you should always buy when the news is at its worst and everyone is talking negatively. If I had shares in VS, though, I'd bale out of them.

Branson shows a real inferiority complex, l and i bet his senior managers are cringing.

RB

Erm, what voluntary pay cut would that be?

Engineering has made no pay cuts at all. Cut staff, yes but not pay. :confused: