British Airways has a serious problem (nothing new there you might say). It’s been a long time since the carrier has been able to call itself the “World’s favourite airline” (a self-proclaimed title anyhow) and instead seems to be on a mission to self-destruct its brand and scare away its loyal fans. Is it time for British Airways to finally reinvent itself?
We ask this question because yet again British Airways is facing a public relations disaster and even calls for a passenger boycott and the resignation of its chief executive. This time, as you have no doubt heard, the airline allowed hackers to steal personal information belonging to nearly 400,000 customers who had booked their flights directly through the British Airways website or mobile app.
Along with customer names, addresses and email details, the criminals also managed to steal full payment card details – including the all-important three-digit CVV code. It’s a monumental failure which has opened up hundreds of thousands of customers to the very real possibility of becoming a victim of fraud.
Thankfully, British Airways has been quick to react and apologise, promising that no customer will be left out of pocket as a result of the hack. The airline went into full damage control mode once the breach had been detected on September 5th, notifying passengers by email the following day and sending the seemingly hapless chief executive Alex Cruz, to do the rounds on broadcast media.
Of course, British Airways isn’t alone in having customer data stolen in a sophisticated online hacking attack (although BA’s incident stands out as being particularly acute in the amount of personal data which was stolen). What’s more worrying, though, is that this wasn’t an isolated hiccup in an otherwise successful brand strategy.
British Airways is somehow making the headlines for all the wrong reasons on an all too regular basis. As far as IT-related fiasco’s go, the data breach was not an isolated incident and you don’t have to look far for further evidence.
In June, a relatively minor IT failure forced the airline to cancel several flights – a problem associated with BA’s new ‘Fly’ operations system which staff bemoan as being unreliable and prone to technical failures. That was nothing in comparison to the May 2017 IT Meltdown which left 75,000 passengers stranded for several days around the world.
That incident was made only worse by the PR Team’s decision to dress Cruz in a high-viz jacket for a heartfelt Facebook apology – to signal, it would seem, that he had been working the floor and getting stuck in on the frontline to resolve the mess. The truth, sadly, wasn’t quite as heroic – Cruz was in fact holed up at the airline’s corporate headquarters, a mile or so away from the hoards of disappointed and frustrated passengers.
And we haven’t even started to talk about the actual product BA offers its customers yet. Take last years introduction of a Buy on Board range of snacks and drinks for short-haul economy passengers – a knife in the back or good value for money depending on which side of the fence you sit.
There’s the so-called ‘densified’ seating on single-aisle aircraft – which leaves high fare paying business class passengers with no more room than economy passengers. Or the antiquated long-haul Business Class seats and out of touch First Class product. The food and onboard service it would appear is a perennial bugbear of passengers.
And of course, there’s also the constant and annoying drip, drip, drip of stories and incidents that slowly damage the British Airways brand – striking workers who earn ‘poverty pay’, various onboard emergencies and aircraft diversions, violent disruptive passengers, and saucy cabin crew appearing in risque videos are just a few examples but I could easily carry on and on.
If this were any other business, it’s hard to imagine heads not rolling. Yet, at British Airways the corporate governance structure seems remarkably secure – even with the threat of a near £500 million EU-imposed fine waiting in the wings over the latest data scandal.
And there’s a very good reason why Cruz and other relative new-comers like head of the brand, Carolina Martinoli probably won’t have to clear out their plush offices any time soon. British Airways continues to perform well – very well in fact.
Earlier this year, the carrier reported a more than healthy profit of £1.75 billion for 2017 – a £281 improvement on the year before despite the huge compensation payouts the airline incurred after the power failure in May. And with a decent overall passenger load factor of 81.8%, British Airways clearly isn’t struggling to get bums on seats (year to date figures show an improvement of 1.1% on seat load factor).
Despite the naysayers who complain BA’s constant penny-pinching will be the demise of the airline, the very opposite appears to be true. Cost cutting has helped the airline compete against the rampant growth of low-cost carriers (Cruz says costing cutting is now “injected” into the DNA of the airline) while the carrier has maintained just enough of a “premium” image to compete with well-funded luxury competitors like Emirates and Singapore Airways (An aggressive pricing strategy has gone a long way to help as well).
Overall, the airline’s strategy has seemed to be one of mediocrity – and it’s a strategy that has worked very well. Running an airline is expensive, especially if you want to run a “premium” airline (the way Cruz prefers to describe British Airways) – somehow, executives have created a product that just about delivers that sought-after premium experience while importantly delivering a decent return for shareholders.
But how long can this run of success last? There are plenty of critics who say the cut backs have gone on for too long and are going too deep. Legacy airline competitors, especially North American carriers have significantly upped their game in recent years – Delta has its Suites product with sliding doors, United is (slowly) rolling out its Polaris branded biz product, while even American Airlines has direct aisle access for all passengers in premium cabins (on transatlantic flights).
There are glimmers of hope – British Airways says its investing some £4.5 billion over the next five years to improve the passenger experience. That figure includes the price tag for the glacially slow rollout of fast in-flight WiFi (regulatory problems still need to be overcome for the short-haul network), in-seat power across the fleet, the renovation of airport lounges and a new dining experience for both long-haul and short-haul business class passengers.
The Airbus A350 featuring the airline’s long-awaited new business class seat with direct aisle access for passengers will finally arrive next year.
But are these “enhancements” enough to change your average passenger’s opinion of staid British Airways? Perhaps it’s cynical but could British Airways benefit from a rebranding?
You see, the airline will celebrate its centenary next year – it’s not only the time to reflect back on 100-years of history and heritage but also the perfect opportunity to look ahead towards the next 100-years. And the best bit is that British Airways already has plenty of plans which could make this idea a reality.
A plan to overhaul and refit the interiors of over 100 long-haul aircraft is not only massively overdue but also a huge opportunity that shouldn’t be wasted. Then there are plans to transform the look of BA’s uniform (a top British designer is set to be announced in the next couple of weeks).
And while they’re at it, how about overhauling the rest of the brand – logo, livery, website and everything else to boot?
The question though, is whether British Airways has what it takes to transform itself ready and fighting fit for the future ahead? Even Cruz has complained of a corporate culture in which employees hold meetings just for the sake of holding a meeting, while nothing actually ever gets done. This is a golden opportunity to turn around a bad situation – one wonders if BA will have the braverly to take advantage.