View Full Version : Demise of BA

29th Aug 2001, 18:28
BA seem to be in terminal decline.
Staff morale is low as management continually try to outsource.
Concentration on business traffic is not working as recession approaches.
Pilots are ready for a fight on pay.
285 employees per aircraft.
Looks like Rod is at the helm of his third disaster. http://portal.telegraph.co.uk/money/main.jhtml?xml=/money/2001/08/29/cnba29.xml

[ 29 August 2001: Message edited by: nhl ]

29th Aug 2001, 18:32
And your point being????
Has BA pissed you off somewhere along the line???

Bally Heck
29th Aug 2001, 18:40
All other things being equal, I would fly with an airline that didn't insult my gastronomical sensibilities with an "All Day Deli" Just what you don't need for breakfast.

29th Aug 2001, 18:59
Oh no not the recession thing again

In the UK many companies such as Easyjet
Ryanair Rolls Royce Smith + Nephew
Woolworths are doing better than ever
BA made a loss last year profit this
year ?

Inflation is Low, Growth is 2% (nowhere near
a recession), Unemployment falling, Interest
rates lower than 20 years ago

Some people are using this telecoms/IT recession as an excuse for failure

Tim Denning
29th Aug 2001, 19:28
I have to totally disagree with both nhl and Bally. This month I've flown as a pax 8 times, 4 times with bmi, the rest with BA. BA completely put bmi to shame. On the evening shuttle BA provide everyone with a good meal , bmi just throw out a tasteless sandwich. The early morning breakfast is better too. Furthermore, the seats are more comfortable, the crew are more friendly and the check-in facilities are far better. I could carry on.

Regarding the recession; its not entirely true. Yes some sectors are suffering, particularly some parts of the financial sector, but as a whole the economy is doing well. When house prices start falling and high street spending plummets then we'll call it a recession. At the moment things may have slowed in some sectors of the economy but as a whole its certainly not a recession in this country. The US is suffering but again, the economy is still growing, if only just.

Recession - looking at retail sales - I think not...

Biggles Flies Undone
29th Aug 2001, 19:50
Sorry RVR800. Merrill Lynch (BA’s own broker) said yesterday that it was cutting this year's estimates before tax and exceptionals from 150m profits to 65m losses and next year's profits forecasts from 316m to 88m. Full story is in today’s Daily Telegraph (see the link in the first posting too).

29th Aug 2001, 23:42
I've just read the Merrills report on BA.
It starts with:
BA shares are ultimately likely to outperform on the anticipation of improvement in the macro backdrop.
It goes on to say:
Yield looks attractive, management plans to hold div.
More specifically,we have shown in this section that changes in the NAPM have led a change in BA's passenger mix at points in the past. (NAPM is stabilising.)
The benefits of the controllable elements of yield are materialising more strongly than anticipated.
This reflects the fact that BA appears to be taking share of the premium market.

Sounds like more sensationalist reporting from the press. ;) ;) ;)

Al T Meter
30th Aug 2001, 01:41
Just to correct you RVR800 vis a vis (get it!!) Inflation is Low, Growth is 2% (nowhere near
a recession)

By UK Governments own statistics and admission the UK is, and has been for several months, in recession. I don't claim to understand these things but I am told that 2% growth does not keep pace and needs to be 5% or more (?). :confused:

30th Aug 2001, 14:42
Al T

I dont know where your source is but the Annualised UK growth rate stands at 2.1%

We are NOT in a recession (This is neative growth over 2 quarters)

If you dont believe me read

[ 30 August 2001: Message edited by: RVR800 ]

Al T Meter
30th Aug 2001, 15:33

I really must be a little more careful in what I write! Manufacturing is back in recession in UK. That was well publicised at the end of July this year. I think I am correct in saying that the Governor of the BoE has acknowledged that fact as well. I also remember that there was a question at PMQs and the fact was also acknowledged. One link to a news report though http://www.guardian.co.uk/recession/story/0,7369,52 8659,00.html (http://www.guardian.co.uk/recession/story/0,7369,528659,00.html)

Al :(

[ 30 August 2001: Message edited by: Al T Meter ]

31st Aug 2001, 03:15
Ice Viper

My point is- can they survive.
My answer to your query is, yes.

It's all very well debating whether or not there is a recession. BA are proud to boast that their market share of premium transatlantic traffic has risen. Despite this rise, though, they have still seen an overall fall in traffic because of the fall in this market.

They are basically a civil service type operation with practices dating back to the 1960s, and unless there is major change they cannot survive in the highly competative world in which they operate.

I forsee that they will retrench to a long haul only operation at soley Heathrow in an attempt to prolong their existance.
Maybe the government will bail them out, or maybe it will be politically advantageous to allow them to fold in an attempt to demonstrate the folly of privatisation.


Don't forget that Merrill Lynch are employed by BA.

[ 30 August 2001: Message edited by: nhl ]

31st Aug 2001, 03:35
I agree that we are not in a recession. Yes, manufacturing is in recession. However, on today's BBC Radio 4 I heard that personal debt (mortgage, overdraft and credit card) has increased in the year to end June by some 45%. That does not bode well.

Japan has not recovered from the 1989/1991 recession. The States are teetering on the edge. So, we have to be mindful of what could happen.

[ 30 August 2001: Message edited by: PAXboy ]

31st Aug 2001, 04:05
Official definition of a recession = two successive quarters (6 months) of negative growth.


The Guvnor
31st Aug 2001, 11:05
From ATW Online:

British Airways has suffered yet another downgrade by house broker Merrill Lynch.
The investment bank now is forecasting that BA will post a full-year pre-tax loss of 65 million ($94 million), revised downward from a previous estimate of pre-tax earnings of 150 million. For 2003, pre-tax expectations have been slashed from 316 million to 88 million. In its most recent research note, Merrill Lynch said it is worried about the effects of economic slowdown and the impact of rising costs, including those due to result from the next round of wage negotiations. Additionally, the report noted, there are potential implications for earnings from seeking antitrust approval with American Airlines, as US and European regulators will ask BA to give up landing slots at London Heathrow. Commenting on the downgrade, BA said in a statement that the announcement was "not out of the ordinary" given current market conditions.

31st Aug 2001, 11:28
Talk of BA's demise is premature.

One World is growing nicely
The AA deal is coming together
Ayling has left
BA's strategy of switching to premium service and cutting capacity is now being followed by almost every major carrier (2 years later than BA!)
BA has about the highest credit rating of any airline
BA is widely regarded as having amongst the very best service of any airline
Staff morale is an issue (but you show me a major corporation that hasn't a problem there and anyway I would say that's improving with Eddington)

I totally agree with the comment about bureacracy though - serious work needed there!

BA's no different to any other carrier - it's having a tough time at the moment but losses of 65m are trivial for an organisation of BA's size.

As for can it survive - fear not my friend BA will outlive all of us!


Kerosene Kraut
31st Aug 2001, 11:38
Don't think BA's declining. Just don't understand why they give up all their promising little projects like Go and Deutsche BA.

31st Aug 2001, 14:41
It gives me no pleasure to see BA in its current condition, but as one correspondent has already said, MG is a major player in BA equities and we might be forgiven for thinking that there’s a bit of propaganda going on here. Several employee groups are approaching pay round negotiations, and it’s standard BA practice to carry out its internal politics in the national press. The reporting on BA’s prospects has been selective to say the very least, but it does give the image of a cash strapped company to those who would ask for inflation busting pay rises. What better than for the suits to pitch up to the negotiating table looking thin and emaciated and threatening severed limbs to greedy union hacks.

Not surprisingly, we’ve seen it all before. The company turned over 9.25bn last year so there is cash flow, it’s simply that the company is as yet unwilling to deal with its massive and burgeoning administrative empire. The figures are much vaunted these days, but at 285 employees per aircraft, they out-strip Air France for state leviathans. If thousands of redundancies are necessary then so be it. It’s nothing more or less than they’ve been told since than Ayling Bob began his incumbency of ineptitude.

In the uncomfortable event of the company going bust, there would be no shortage of buyers to come along and manage the infrastructure and resources of this company in a far more effective and sensible manner. The only losers would be those such as the aliens from Waterworld with their tenuous grasp on reality and inability to understand the airline industry or customer service. Pay and conditions would have to remain competitive since the whole industry is suffering from a serious skills shortage, and the need to retain and recruit experienced staff will not be lost on an enlightened management.

As far as the pilot pay round is concerned, there is some serious catching up to be done. You’ll not have missed the Airtours pilots saying that they wanted pay-parity with Easy Jet and Ryanair, no mention of the ‘World’s Favourite’. We can expect all kinds of threats and ultimatums from the management, but if nothing is done to address the slide in P&C’s, then the trickle of leavers will turn into a steady stream, and the company will not be able to attract the right kind of applicant. Unfortunately for the ‘Havard Hardmen’, the market has changed and they’re now having to compete. The most recent attempt by the Prince of Darkness to do the training on the cheap has resulted in massive training costs, not helped by the Loons of the Lake buying lots of Eurobuses and having to convert/train hundreds of pilots.

I think that cynicism over the companys’ tactics has reached such a stage now where we simply don’t give a $%^. Every pay round we’re told that either we’re just recovering and it would be a shame to spoil it, or we’re going down the toilet and we can’t afford it. The net result is they have abused our good nature for far too long and it stops right here. The current pay claim is carefully thought out and is quite affordable, and frankly if the company is on its uppers then perhaps they won’t have the stomach for a fight. Our new Chief Pilot – The Lord Protector is not known for his depth of understanding nor his loyalty to his colleagues. There is considerable speculation that his tenure and his thirty pieces of silver are dependent upon delivering the heads of his colleagues. That we’ll see as the order of battle emerges. In the mean time the watchword is as always – don’t believe everything you read in the press. There is more going on behind the scenes than may be immediately obvious.

One of the favourite sayings is that BA prospers despite its management. The company, or it’s offspring are here to stay. Let’s pray that its management is not.


31st Aug 2001, 15:59
A very good post there Roobarb, right on the money so to speak.

I'm sure BA will pull through, but it my become very costly if the "mangaement" get any bright "ideas"! :eek:

31st Aug 2001, 17:21
Spot on Roobarb!

An excellent post that goes straight to the heart of the matter.


31st Aug 2001, 22:04
Compared to other majors BA ain't doing That bad.... :p

1st Sep 2001, 12:37
i agree with roobarb.The management have been taking the p#8s for to long.Down here in the engineering world of BA,are salarys have just been blown out of the water by all of the american nationals.AA have just been given a massive rise to there engineers putting them on around 50k a year,as have Delta,Northwest,and soon United.Puts our crap of 33k a year in the shade.What will we we get?,more than likely 1.2% over 2 years,and a hard luck story.All of these carriers are affected by the same market forces as BA,so there`s no excuses!.If your reading this waterworld personnel,it`s time to get your`e fingers out of your asses,and start paying pilots and engineers the market rate!!!!!! :mad:

1st Sep 2001, 14:09
For info...which pay round comes first, the CAs or the pilots? Or will there be some attempt to put up a united front? :p

1st Sep 2001, 16:07

From your second post:

They [BA] are basically a civil service type operation with practices dating back to the 1960s

Maybe the government will bail them out, or maybe it will be politically advantageous to allow them to fold in an attempt to demonstrate the folly of privatisation

I think you've got yourself a bit confused here. How can you complain about BA's civil service style operation in one breath and then talk about the folly of privatisation in another? Nationalised industries, by definition, are a part of the civil service!

The Guvnor
1st Sep 2001, 19:53
Plenty of lessons to be drawn from the following Wall Street Journal article:

August 28, 2001

High Fares, Mediocre Service Cause Business Travelers to Mount Rebellion

By Martha Brannigan, Susan Carey and Scott McCartney
Staff Reporters of The Wall Street Journal

It's payback time.

In a startling change of behavior, business travelers are mounting a rebellion that could reshape the way the airline industry operates for years to come. Fed up with spiraling fares and mediocre service, road warriors are using technology and other means to beat the system airlines have long stacked against them.

The last thing the carriers need right now is to lose their most profitable passengers. After years of bottom-line growth, the airline industry suddenly finds that everything seems to be going wrong. First, jet-fuel prices skyrocketed. Then, the long economic expansion that sent business and leisure fliers jetting around the globe stalled. And now, labor costs are going up just when the airlines need to keep them in check.

The result: Caught in a vise between rising costs and falling revenue, the U.S. airline industry is careening toward an estimated $2 billion to $2.5 billion loss for 2001, ending a six-year profit streak.

Spooked by the faltering economy, fliers who long seemed indifferent to high ticket prices are scouting for cheap fares, shuffling travel plans or staying home. The first quarter of 2001 marked the biggest drop ever recorded in the percentage of full-price coach and first-class tickets booked on a large sampling of routes tracked by American Express Travel Related Services since 1992. The percentage of passengers paying full-fare coach fell to 7% from 12% a year earlier. Those buying first-class tickets dropped to 2% from 3%.

"None of us has ever seen this kind of collapse in business travel," says Doug Hacker, chief financial officer of UAL Corp.,
the parent of No. 2 United Airlines.

The loss of those high-priced seats is taking a toll on the carriers' bottom lines. In May, domestic unit revenue, a closely watched indicator that measures revenue per available seat mile, plunged 11.8% from a year earlier among U.S. carriers -- the biggest monthly decline in two decades. June and July proved even worse, with drops of more than 12% in both months. In a survey of 200 companies earlier this month, the National Business Travel Association found that only 16% plan to boost travel spending next year.

New Tools

The new mentality among business travelers suggests the airlines milked their profit cow too hard. And just as computer technology let airlines precisely match prices to demand and seat inventory to squeeze the most from passengers, it's now equipping travelers with tools to buy smarter and save money -- threatening airlines' pricing power.

Leading the consumer revolt are frequent fliers such as Neil Butani, a Los Angeles physician working on a start-up medical publisher. For a trip to Chicago earlier this year, he bid $168 on Priceline.com (www.priceline.com ) and ended up with a $198 round-trip ticket just one day before his departure. With empty seats to fill, American Airlines charged him one-tenth the normal walk-up fare.

Dr. Butani normally flies no-frills carrier Southwest Airlines. "But when you can get this fare for a nonstop, you take it," he says.

"Anybody who has a modicum of Internet capability and wants to take what is now a modest amount of time can very rapidly find out and comparison shop," says Leo F. Mullin, chairman and chief executive of Delta Air Lines. "There is almost perfect information out there."

Checking Your Agent

Michael Guirlinger, a senior managing director for Profit Technologies, a Davidson, N.C., consulting firm, says he routinely researches trips on the Web to find the best fare before booking through an agent.

Travel agents, he says, might not ferret out combinations that have one or two extra legs but save a lot of money. For a trip next week between Columbus, Ohio, and Dallas, Mr. Guirlinger checked several airline Web sites and found that a nonstop flight cost $1,300, but going via Atlanta was "nearly $500 less,"
he says. "That's a lot of money. And when you travel as much as our firm does, it adds up." He says when the economy rebounds, he expects he and other frequent fliers at the firm will maintain such price sensitivity.

At Intel Corp., employees using a new online booking program linked to its corporate travel department have turned into bargain-hunters. As travelers scroll down a computer screen and see they can often save several hundred dollars by shifting to an earlier or later flight, many have become more willing to do so. The big chipmaker slashed travel spending 25% in the second quarter from a year earlier with such measures, as well as handling more meetings by phone and videoconferencing. And even senior executives at Intel are booking coach tickets between the U.S. and Asia.

Robert Africk, head of investment banking at Blaylock & Partners L.P. in New York, had long been among the travelers who flew "any time, any price." That changed when he saw the price of a full-fare ticket between New York and Houston, a route he travels often, double to more than $2,000. "Several flights go through Houston to Cancun, and the guy going all the way pays significantly less," he says. "That doesn't make any sense."

With air fares soaring and business softening, Mr. Africk began focusing on booking ahead whenever possible, hunting for
bargain fares and buying restricted tickets. "Travel and entertainment so overwhelm other expenses, it's really the place where you can make a difference," he says.

Royal Cutbacks

Royal Caribbean Cruises Ltd. cut its own corporate-travel spending by 28% in the first half of 2001 from a year earlier by forcing many employees to forgo first-class and business-class seats in favor of economy class -- even on long international flights. The cruise giant is dispatching fewer employees to meetings, and those who do fly are urged to book well ahead to get cheap fares.

"We're not paying those $2,000 and $4,000 tickets anymore," says Nick Hafner, a Royal Caribbean vice president who manages corporate travel. "We're paying the $400 tickets. It's a pretty dramatic change." While Royal Caribbean's employees miss the first-class and business-class seats, "my expectation is probably it will not come back," he says.

The airlines' pricing strategy over the past five years has made them an easy target. Cocky that business travelers needed to fly
no matter what, the big carriers aggressively pushed up business fares -- six times during 2000 alone. Meanwhile, they held flat or even reduced discount fares, mostly used by leisure travelers.

By the second quarter of 2001, the typical business fare had climbed to 4.91 times the price of the lowest discount fare, compared with 2.61 times in the first quarter of 1996. That's the widest gap ever between ticket prices, according to American Express Travel Related Services.

Lucrative Customers

The Air Transport Association, an industry trade group, estimates business travelers take about half of all airline trips but generate as much as 65% of carriers' revenue. Full-fare business travelers are far more lucrative to the carriers than that:
United, during the boom times in the late 1990s, figured 9% of its passengers accounted for 46% of its revenue.

During the recent go-go economy, the strategy worked. Fare increases didn't dent demand for business seats, as euphoric dot-com executives and high-tech consultants roamed the country. Carriers boosted their yields and reaped record profits.

But as companies and individual fliers scrutinize spending in the weak economy, the yawning gap between business and leisure fares makes the cost of a business-class seat seem more irrational and unfair than ever. "Why should a seat be twice as expensive five days out than a seat purchased 14 days out?" asks Dennis Kivikko, a frequent traveler and official with the garment division of the AFL-CIO. "Their primary mission is to gouge the business traveler."

Unstable Situation

Many observers think the changes may be here to stay. "We're increasingly thinking 2000 and 1999 were business travel bubbles that aren't going to be duplicated any time soon," says Jim Higgins, an airline analyst with Credit Suisse First Boston in New York. "As that bubble has burst, it has revealed an inherently unstable pricing situation in the industry," Mr. Higgins says. "The implication is that business travelers may be in the process of retraining themselves as to what they are willing to pay for business travel tickets."

Meanwhile, more travelers are getting used to high-tech alternatives to travel, such as online meetings and videoconferences. "Travelers are learning this stuff works," says Scott Gillespie, chief executive officer of Travel Analytics, a Solon, Ohio, concern that analyzes corporate-travel patterns for companies negotiating airline contracts. "I don't get frequent-flier miles, but at least I get to see my wife at night." He
predicts a sizable portion of air travel won't rebound when the economy does. "It's going to peel away the marginal travel," he says.

Pushing for Discounts

Many corporate travel managers say they have begun pushing for bigger percentage discounts from full-fare in negotiations with carriers. Full-fare coach, says Harlan Bennett, vice president of revenue management at Delta, has become like the rack rate posted on the back of a hotel door. It's the standard used for cutting deals, but the percentage of travelers paying it has fallen to "the single digits."

Also tipping the scales toward the buyer are sophisticated software systems that crunch data on employees' travel patterns to ensure they stick to travel rules and to use as leverage in negotiating discounts with airlines. In-house travel managers now also use software that distributes employee travel among carriers to meet volume targets for negotiated discounts.

"I doubt we'll see the high margins of the late 1990s in the next upturn," says Philip Baggaley, an analyst with Standard & Poor's Corp.

Not Permanent

Many airline executives dispute the suggestion that a permanent shift in business travel is under way. Some recall similar dire predictions that air travel wouldn't rebound after the recession and a widespread fear of terrorism in the early 1990s temporarily curtailed demand.

Doug Steenland, Northwest Airlines' president, expects a revival in last-minute business bookings when the economy rebounds. "The time of our corporate customer is as valuable today as it was before," he says.

"The memo never comes out saying start traveling again," says M. Michele Burns, executive vice president and chief financial
officer at Delta. "But it just happens."

In the meantime, the major airlines are slashing capital expenditures, freezing hiring, and paring capacity to shed unprofitable routes and ground older, fuel-guzzling planes. The double-whammy of higher labor costs and lower business travel
is "going to mean a rebalancing of supply and demand in the industry," says Tom Horton, chief financial officer at American.

Last month, Northwest announced a second round of layoffs, a move likely to spread to other carriers. Earlier this month, American lowered the cap on the commissions it pays travel agents to $20 from $50 for a domestic round-trip ticket and to $10 from $25 for one-way. The move, quickly matched by several other airlines, could generate $365 million in pretax savings for the industry next year, according to Brian Harris, an analyst with Salomon Smith Barney.

Northwest has already reduced the number of flight attendants on its Airbus A320s and A319s to the legal minimum of three, down from four. United has quit stocking grapefruit juice and yanked the linen place-mats from domestic first-class cabins. Delta is substituting regional jets for larger jets on its shuttle between Boston and Washington.

Labor costs are headed in the other direction. David Swierenga, chief economist for the Air Transport Association, an industry trade group, estimates that labor costs at U.S. carriers will rise by $6.6 billion, or 15%, to $51.9 billion by 2002 from about $45.3 billion in 2000.

Tough Talks

Both American and Continental Airlines are facing tough contract negotiations with their powerful pilots unions that are expected to result in significantly higher labor costs. "We don't have a choice," says one executive at a "Big Three" airline. "It isn't worth burning the house down trying to save it."

United, which set the pattern for higher labor costs with a rich pilots' contract last year, is expected to post a loss nearing $1 billion for 2001. No. 3 Delta just signed a pilots' contract that will top United's pay rates and boost its costs by $500 million a
year -- more than its entire profit in many past years. No. 1 AMR Corp.'s American is facing even higher pay demands from its own militant pilots, even as it tackles a tough integration of recently acquired TWA.

Mr. Swierenga says elements of the current industry decline -- including a run-up in jet-fuel costs followed by an economic downturn -- are reminiscent of the bleak days of 1990 through 1994. During that period, the industry lost $12.6 billion -- more than it had earned throughout its entire prior history.

Cutting Fares

In light of the soft demand, the airlines have been offering a host of targeted fare sales -- including one launched just Monday by Northwest and matched by other carriers. In some markets, they have relaxed restrictions on leisure fares -- such as advance purchase and Saturday night stays -- mostly to draw back business travelers from low-fare rivals.

Meanwhile, the sophisticated revenue-management systems that help airlines predict demand have begun holding back fewer
seats for the last-minute business traveler in many markets. In other words, the airlines are peddling more cheap seats to match the times.

Says Mr. Bennett, Delta's vice president of revenue management: "Some fare is better than no fare at all."

-- Melanie Trottman contributed to this article.

Write to Martha Brannigan at [email protected], Susan Carey at su[email protected] and Scott McCartney at [email protected]

Final 3 Greens
2nd Sep 2001, 11:33
One must remember that BA was part of the civil service until 1984, so as a commcercial organisation it is only really just over 16 years old.

Profound change takes many years to achieve and I have certainly seem sound progress in terms of both customers service and business improvement over the years.

Sure, they have their problems, but they also have a solid strategy which will work over the long run, once the present economic downturn stabilises and recovers.

People always talk about low staff morale, but IMHO having worked with the company as a an external consultant, they have a workforce that is remarkably committed to the airline, even if they do not always appreciate some of the management moves ... but then again what large organisation (65K employees) does not find it difficult to maintain perfect morale?

If BA is contrasted against other flag carriers, it looks pretty good; not the best business performance, but a strong performer moving in the right direction.

Also, remember that BA's main base is LHR, where the airline has 40% of the slots and Star Alliance 26%. Contrast that with FRA where LH has 70%. Everyone wants to service LHR and so BA is constantly under strong attack in it's own backyard.

I am not anti bmi, British European, Virgin et al (as a Brit I think that they are good companies and part of the reason that BA is constantly forced to improve), but ask yourself what real internal competition SA or Alitalia have.

All in all, BA is doing okay. The industry is suffering from a downturn at the moment and Merril Lynch's statement is pretty fair comment. But over the long term, BA will do well for the country as an ambassador and an earner of foreign "hidden" income.

2nd Sep 2001, 14:49
A BA Purser showed me her pay slip last month. Her take home pay was 3500. How can that be justified? How can you work for an airline that pays a Purser more than a pilot?

2nd Sep 2001, 20:48
Interesting article in today's Sunday Telegraph which illustrates the scope of BA's problems. The Atlantic stuff is doing OK-ish (like all the Atlantic carriers), but short-haul is really struggling against the low-cost carriers. It does make you wonder if BA's shift of emphasis towards the now rapidly-disappearing business class passenger was badly timed and will hurt. One very interesting statistic quoted was BA's passenger/employee ratio of 650, compared to Ryanair's 6000. Virgin's is around 3000. That's expensive, and will need to change. However, I don't doubt that they will survive and, at around 3, the shares are probably a very good buy.

The Guvnor
2nd Sep 2001, 21:06
Carpe - easily! A Purser/CSD has a considerable amount of responsibility and experience. I see nothing wrong at all with someone in that position being paid the same as - or more than - a junior pilot. Bear in mind, though, that the total pay will of course include allowances and per diems ... what's the basic like?

Human Factor
2nd Sep 2001, 21:09

Please lets not get into the 'why should I get paid more than you' type arguments again. It's very dull. :rolleyes:

Final 3 Greens
2nd Sep 2001, 21:24

BA believe in paying people what they perceive them to be worth.

You may not agree with their view in respect of cabin crew and you are quite entitled to your differing belief, but BA are paying what they think is a fair rate for the job.

If you contrast this attitude with some carriers, it is actually quite refreshing.

2nd Sep 2001, 21:52

I'm sorry, you can build it up as much as you wish but I can not see how a Cabin Attendant can reasonably be paid that amount of money.

I don't know who you work for, but if your junior pilots are taking home 3500 a month I want to work there. I'm sure they're not though, our Captains aren't even earning that, flying the same long-haul routes as this Purser.

I wish BA pilots every success in their pay negotiations.

[ 02 September 2001: Message edited by: Carpe ]

The Guvnor
2nd Sep 2001, 22:04
Carpe - are you seriously telling us that BA long haul captains don't earn 3,600 per month? :eek: :eek: :eek:

2nd Sep 2001, 22:18

You misunderstand me, I don't work for BA, but for the bearded one, whose Pursers would take more than 3 months to pull in what BA dish out in 1

2nd Sep 2001, 22:27
Know nothing about BA's culture or internal politics. But after having ridden aboard 67 of the world's airlines, BA is my favorite.
28 BA flights, 12 trans atlantic, left me most impressed with consistent excellent cabin service. And if a BA purser makes 3,500 then so be it. :cool:

2nd Sep 2001, 22:53
I read on FT.com that SR are cutting 7 to 8 % of capacity and also cutting 5% of jobs (don't know from which areas).

I think BA is planning to be 12% down on ASKs vs last year yet as far as I know there has been no noticeable reduction in staffing (apart from Air Liberte coming off books).

SR obviously seem to believe that cutting jobs is going to help them - what do BA manangement know that they don't I wonder ?

2nd Sep 2001, 22:55
Guvnor - who actually pays your wages at the moment?

3rd Sep 2001, 00:10
Finals 3Gs,

Do you really believe what you have just written? If BA, or any other airline for that matter, paid you what they believed you were worth, you would be on income support.

BA pay exactly what they can get away with and not a penny more. But my understanding is that cabin crew run BA and that, to bring the discussion neatly back to the point, is one major contributor to the company's demise

3rd Sep 2001, 01:06
Having read the thread through re BA, I can only comment on their daily flight from LGW to RIX and back again.

That flight is usually about 80% booked, both business class and cattle class. If such an out-of-the-way place like Riga has 80% booking, where, oh where, are they going wrong?

The only competition BA has flying to London out of this city is a BT-SK connection out of Copenhagen (pretty much the same price, mind you) but it takes three hours longer.

I always thought that if you had more than a 55% payload you were making money. At 80% this short-haul operation definitely is making money for BA. So, if they go long-haul only, they will lose income by eliminating RIX. In that case someone else will come in and make money.

3rd Sep 2001, 11:29
I think Carpe ,the BA purser's pay you saw recently is certainly not typical of the rest of the company.

Maybe it was a -one-off-,where they triggered some outstanding allowances.

I have friends who are psrs within the company,and earn half that or less.

Meanwhile, like many airlines , the new crew are lucky to take home 1,000/mth,and then try to survive in W.London.

There are some that are highly paid in the company,and get destination payments for places they don't like going to,alot of time off,and v.large long flight payments (clue:these people are not on s/haul) , but as we have just been asked to save a further 17m in cabin services ,perhaps these are the people who will be targeted for the shortfall.

3rd Sep 2001, 12:04
An Economic rebound is predicted by City
Analysts Sunday Telegraph 020901 This will
be BAs renaissance

Details follow...

EXPERTS are predicting a stock-market rally in the coming months that could lead to the market rising by 21% by the end of the year.
The big City investment banks are united in predicting that the market will be higher by the end of December, despite its recent drubbing and a succession of profit warnings.
Last week, the London market took another battering when falls on Wall Street sent share prices tumbling. The FTSE 100 index of the biggest shares finished the week at 5,345 - near its three-year low.
Although experts are unwilling to say that the market has hit the bottom, most expect considerable progress before the year ends. Everything, however, depends on a recovery in America, which would help to propel the British market out of its current lows.
Steve Russell, a British equity strategist at HSBC, said: "We anticipate a market rally as we pass through the low point of the American cycle in September and October. The recent downturn in Britain's market is being driven more by negative sentiment in America than domestic woes."
HSBC expects the FTSE 100 to hit 6,500 by the end of the year - one of the more optimistic predictions.
An upturn in the American economy may, however, seem improbable in the wake of all the bad news that came out of Wall Street last week. On Wednesday the American government reported the slowest economic growth in eight years. Gross domestic product figures for the three months to June were revised down to 0.2% from 0.7%. Investors took this as a sign that a recovery was still a long way off.
But expectations are growing that the Federal Reserve's policy of aggressively cutting interest rates could start to have an impact on the American economy.
America's central bank has cut rates seven times in the past eight months - so far, to no effect. But historically, the benefits of lower interest rates have taken six to nine months to filter through to the economy.
Hasan Tevfik, equity strategist at Credit Suisse First Boston, predicts an end-of-year level of 6,000. He said: "The interest-rate cuts in America will start to feed through over the next few months. This will signal a turnround in the American economy and will boost the markets in Britain and Europe."
Private investors already in the market are advised to sit tight. Historically, some of the sharpest rises occur just after the market hits its low point, which even the finest minds in the country cannot predict with any accuracy.
Anna Bowes of Chase de Vere, an independent financial adviser, said: "There is no point trying to time the market by selling out and then buying back in when you think the time is right. The market is always full of surprises."
The bottom of the current downturn was initially called back in March. It caused the FTSE 100 to rally by more than 10%. But prices quickly fell back after it became clear that worse news was still to come.
Hilary Cook of Barclays Stockbrokers said nervous investors should stay out of the market until the economic outlook is clearer. "We expect the FTSE to be at 5,900 by the end of the year. There is upside from these levels, but it is going to be a rocky ride."
Jeremy Batstone, head of research at NatWest Stockbrokers, is even more cautious. Although his company is predicting an end-of-year FTSE level of 6,300, he believes this may be difficult to achieve given current market conditions. He said: "I can't see the markets moving out of this range because corporate profits will continue to be eroded."
Even so, Batstone believes there is money to be made from shares for braver investors. He favours defensive stocks such as utility firms and drug companies. Even though these have performed well over the past 18 months and now look expensive, he said it was too early to move into cyclical shares that would benefit most when the economy staged a recovery.
When there are signs that the economy is stabilising, investors are advised to start buying stocks such as housebuilders, chemical firms and engineering companies, as these should be among the first to feel the effects of a pick-up.
But even if the market rallies, investors should not expect the returns they have enjoyed over the past two decades.
Low inflation means prices are expected to rise more slowly than in the past, with most experts predicting returns of much less than 10% a year.

The Guvnor
3rd Sep 2001, 12:25
RVR800 - an optimist sees the glass as half full; a pessimist sees it as half empty; ... and an engineer sees it as being twice as large as it needs to be! :D :D :D

Super Stall
3rd Sep 2001, 12:41
The thing about market crashes (and rallies), is that they very rarely come when anybody is expecting them, thats why the price movements can be so severe. Many predicted the inevitable (with hindsight) collapse of the tech stocks, but very few the downturn in the wider market.

If most city institutions are now predicting a year end rally you can bet they are almost fully invested, so now who's left to buy ?.

If no rally is forthcoming and these guys then get the jitters.. :eek: :eek: :eek:

[ 03 September 2001: Message edited by: Super Stall ]

3rd Sep 2001, 13:58

You don't know who the Guvnor works for?

I think you'll find he's a full time internet poster/daydreamer!!

No wages coming in there methinks, he's more likely to be using giros as opposed to gyros.

Final 3 Greens
3rd Sep 2001, 23:54

My opinion is based on close quarter observation, but you are welcome to your opinion.

I have no other connection with BA than supplying them with consulting services from time to time.

They are big enough to fight their own battles without my small contribution.

But I guess I am thinking as a management consultant, not a pilot. then again, we get paid a lot more than pilots for thinking .....

4th Sep 2001, 11:25
The fact that BA's share price or Stock Market recommendations are faltering has little to do with anything. Shares in general are over-priced but no-one seems to be able to accept long-term lack of fast buck profits. Except of course Warren Buffet, and he's the second richest man in the world.

Oh - and me.

4th Sep 2001, 16:53
I think that Roobarb has got it right here.
Covenant, I'm not confused, BA is run like a government department, but I'm not saying that privatisation is folly, merely that the government when considering a rescue may try to make this appear to be the case. However, New Labour actually seem to like privatisation so maybe they will help BA.
What I'd like answered is how BA are ever going to make money and if they aren't will investors eventually go elsewhere with their money.

[ 04 September 2001: Message edited by: nhl ]

4th Sep 2001, 21:35
The majority of my short flights have been over 90% full for at least the last 2/1/2 month, I ain't got a clue where the money is going, but all I know is that it ain't going in my pocket.

5th Sep 2001, 13:52

This is exactly the problem with BA at the moment. It doesn't matter that the aircraft are full, they will still make a loss with the beurocratic fat that they carry, so in the long term they can never make a profit.
Their recently announced staff cuts would appear to be in entirely the wrong areas. Did'nt one of Rods previous disasters suffer severely because of too much trimming in engineering?
Departments still vie as to how much each can spend on courses for their staff in order to maintain their percieved status. The "suits" still run their empires at Waterworld.
The latest rumour is that BAR are to go, further unrest with probably no savings.
At least investors finally seem to be realising that without major changes in strategy and management BA will never be profitable.

5th Sep 2001, 16:17
Well now, let me say this.

I'm just looking at a London to Cairo trip. Travelocity gives me but two direct carriers.
I can choose BA or Egypt Air. Now which one am I going to choose? :rolleyes:

Just testing how PC you are - how much you value your life.

Now I'll add this. BA 303 pounds. Egyptair 752 pounds.

You can slag BA off all you like but I think they're trying reasonably hard... ;) ;) ;) :p

21st Feb 2002, 04:35
Although terrible events have occurred since I started this thread, I think that those who doubted what I said at the time must now realise that the predictions were more accurate than Nostradamus himself!

21st Feb 2002, 07:39
Nostrodamus wasn't very accurate at all.`

The Original Geeza
21st Feb 2002, 14:02
Look at this way, BA has had its faults for too many years to just simply change them. Unfortunately it is run by a bunch of idiots who couldnt manage to save their lives, the sad fact is they will never get rid of these klingons, they have been established for too long. As for Roddy well, dipstick.. .If there was other work out there at the moment i would jump at it, but unfortunately me and the other 50000 people are stuck untill we are made redundant. Seeing how BA is operating , it shouldnt be too long now before that happens.. .Good Luck to all at BA dont let the B*****ds get you down. <img src="frown.gif" border="0"> <img src="frown.gif" border="0"> <img src="frown.gif" border="0"> <img src="frown.gif" border="0"> <img src="frown.gif" border="0">

Peter L
21st Feb 2002, 19:20
Desk Pilot

Nice one I could not agree with you more..... <img src="smile.gif" border="0">

Tough times but we will work harder and longer and show the BA bashers they wished they had bought a BA ticket!!!! Probably already have..... <img src="tongue.gif" border="0">


LGW Vulture
21st Feb 2002, 19:31

You're missing one vital element of airline profitability....

Your a/c might be full..but what yield is BA achieving to get full pax?

Stick to flying...its less taxing on the brain!

21st Feb 2002, 20:19
LGW Vulture - look at the date on Suggs post!

21st Feb 2002, 20:21
Guvnor..... You just about did it....

A full page all to yourself. Just a little bit more effort next time...

LGW Vulture
21st Feb 2002, 20:27

I'll stick to consultancy...its less taxing on my memory!!!

21st Feb 2002, 20:55
We are in a BEAR market in the USA. And the so called experts , the ones that didnt see this coming, now try to BS the public into telling them that recovery is just around the corner. As I remember, it was just around the corner a year ago, 9 months ago, 7 months ago, etc, and a month ago. Today the experts tell us that it is just around the corner in 6 months. The US Teasury Dept. is pumping Billions of dollars into the system every day and nothing is changing. And unfortunately most countries will suffer because like it or not the US is the engine of the economic train. . . Anyone want to bet that the Dow Jones Industrial average and the price of gold will some day cross each other ?

Hussman.net Select research and insite, then weekly commentary Its FREE

[ 21 February 2002: Message edited by: polzin ]</p>

22nd Feb 2002, 22:27
LGW Vulture

I scrolled down to read my post before I read yours and was horrified that somebody had stolen my login and password. Then I looked at the date, how times have changed. NHL was right but then most pilots have been saying the same for at least a year and a half.

I think that it's fair to say that the loads aren't quite has high as they were over the Summer!!!