Drastic measures vital to salvage customer confidence in BA

Apr 23 2008 by Bill Gleeson, Liverpool Daily Post

YOU run a business. You have good days and you have bad days. Some of the bad days are long and they run on, one after the other, until it seems you are on a hiding to nothing.

Step forward Willie Walsh, chief executive of what we were once led to believe – with not much in the way of qualification – was the world's favourite airline.

British Airways is in trouble.

The calamitous opening of BA's new home at Heathrow is the stuff of nightmares for any firm with a reputation to protect. BA's reputation has lost a lot of its gloss in recent years, so you would have been hoped the firm would have been especially careful on the opening of its showpiece Terminal 5 at Heathrow.

That makes it all the more difficult to understand how the business has allowed itself to plunge into yet another crisis.

As is so often the case in such circumstances, just when it's already bad enough, it gets a whole lot worse.

The extra kick in BA's case has been delivered by a selection of insurance companies who have declared they will not offer cover on luggage likely to find its way into the black hole of Terminal 5’s baggage handling system. With friends like that . . .

BA may argue that it's a situation beyond its control. Perhaps it is, but there is no doubt the circumstances prompting the move were very much in the airline's control.

So, too, were the decisions about which suppliers to commission for the necessary kit and training to get the new facility fit for purpose.

Clearly, something has gone horribly and terribly wrong in this process leaving the reputation of our national carrier in pieces.

The dismissal of two senior managers may be more to do with ensuring others survive, and appeasing institutional shareholders, than finding Mr and Mrs Bloggs's bags and mak- ing sure they don't get lost again – should Mr and Mrs Bloggs ever decide to fly BA again.

Things may be running a little more smoothly now, but there is a long way to go before this crisis is over for the airline. The costs it has incurred as a result of the foul-ups will take some explaining to shareholders.

The next AGM could be another bad day for Mr Walsh – assuming he is invited. There will be more bad days before then, not least, when the position of the airline’s pilots is taken into account.

The pilots, it is reported, are fearful for the damage to their airline's reputation and are said to be losing faith in senior directors.

Two have already left the company. Others remain on board, but for how long is anyone's guess.

When a business is as badly damaged as BA, drastic measures are required to salvage reputations and customer confidence.

MATT JOHNSON is chairman of Mando Group