Let me state a few things from the get-go.
- I’ve been a big fan of the direction British Airways was moving in for the last two years, and was actually one of the few who supported it as I saw change (slowly) making a (big) difference.
- I actually think Alex Cruz is one of the smartest people in the airline industry, and made tough choices to create long term viability for a large workforce, which would be smaller without his leadership.
- I absolutely agree that every airline must terminate a percentage of its workforce. No one on earth is saying travel will rebound 100% for years to come, and that means measures must be undertaken to ensure the success and viability of an airline for the future.
None of these things account for whatever is happening at British Airways right now, nor does it account for the lazy op-ed from Alex Cruz, which fails to draw any moisture from the tear ducts, while raising great concerns.
For a start, British Airways currently benefits from the UK Job Retention Scheme (JRS), which has been extended until October. The airline refuses to consider the possibility of keeping employees on during this interim period of government support, despite enjoying the financial benefits.
Mr. Cruz is quick to cite years of dwindling demand ahead, but considering the world hadn’t even heard of covid-19 in December, and grim projections were more than 10x worse than actual realities around the world today, it’s hard to understand why the airline won’t even consider the dynamic nature of this fast paced world.
Take Spain, for example, which previously hinted at remaining closed off to the world through 2020, but will now open to most of Europe in just a weeks time, with even broader entry from July 1st. It’s certain that the airline business won’t be the same, but it’s not all doom and gloom, nor may it be as bad as forecast.
It’s one thing to terminate a portion of staff, which virtually every airline has, or will soon do, but it’s another thing to make life a living hell for those which do get the “pleasure” of remaining.
If anything, one might rightly think that protecting the livelihoods of those deemed “worth saving” would be more essential than ever right now, so as to have employees who feel even more grateful and proud to be at work, not marginalized and more stressed than ever as to whether their wage can provide a decent life, beyond young uni student standards.
Some corporate soundbite type could tell me that all employees should take pride in their work no matter what, and they likely will, but they’re rarely the people who are being asked to scrape the barrel of meager pay on worse off working terms. In reality, most never have. Making that point even more concisely, the financial pain certainly isn’t being felt around the IAG, BA Executive teams, and even if someone like Mr. Cruz, or Mr. Walsh were to go a year without any compensation, it’s a lot easier when you’ve made millions in recent years.
And lets not forget the old “giving up their salary” chestnut. For an executive, salary compensation can often equate to less than 10% of overall take home pay. People working under these mercurial figures will undoubtedly be professional, but professional and proud are two very different things.
The latter (proud) can make all the difference as consumers become more educated and flexible in who they fly with, and why they choose who they choose.
Some people are even keeping sh*t lists of who wronged them with things like refunds, vouchers during covid-19. Somewhere at BA, an executive made the choice to have their IT department code their website so as to remove the option of a refund, which took manual work to do. Perhaps that’s why they won’t be asked to take a haircut on pay?
Those corporate contracts British Airways relied on aren’t going to be nearly as generous as they were, and there will be many airlines fighting to take even a half a percentage off. British Airways can solve its people problem by reducing head count, which no one would hold against them, and that’s the fundamental thing people don’t get. It’s the moves to negatively impact employees which aren’t terminate that are seen as opportunistic.
British Airways would love to start fresh, under the loose, almost lawless governmental and employment terms of some foreign competition, where workers have no rights, protections or virtually anything in their favor. That makes sense financially, but there’s an equilibrium between financial performance desires and the livelihoods of those which represent a given brand.
As someone who spends the majority of their time – under normal circumstances – observing the demeanor of travel industry employees, there’s a notable difference in those collecting a pay check, and those proud of their employer, no matter what the person insisting on the cost cuts says to justify them.
As noted, I’ve been a big Alex Cruz fan. I understand the unpopularity of removing “free” things from short haul flights, and I even wrote a viral letter berating him for the move, for which I admitted to be wrong. But over time, statistical analysis proved that Mr. Cruz was in the right.
Over 90% of travelers book based on price, and this allowed the airline to compete better on smaller margins. His interest in technology, from biometric boarding to kitted out new seats and facilities at Heathrow have made a positive impact, no doubt. For those that don’t know, Mr. Cruz was extremely early in unharnessing the power of the internet for the benefit of airline booking, and this isn’t his first rodeo.
I can only hope that the direction he’s steering is at the behest of his boss, Willie Walsh, because I’ll unfortunately think of him in less of a positive light, if it’s not.
This letter of his… my goodness. Not once in the letter, an op-ed published in the Mail On Sunday by the man Alex Cruz himself, specify why we should care about British Airways, or even want them to succeed.
What if travel does rebound at a better rate than hoped? These aren’t questions IAG or British Airways are willing to entertain, because they go against the deep seeded desire to cut costs, at any cost.
Alex Cruz is absolutely right about the balls up from the UK Government in regards to an idiotic quarantine, and I support BA and others suing the government for lack of consultation. His point to the fact that fewer planes are flying is of course true as well, but not once is there a clear reason as to why reducing the viability and livelihoods of staff which will remain on the workforce is genuinely necessary.
Cut headcount numbers, sure, Virgin is, EasyJet is, Ryanair is, Qantas is, United is…. but this is more than that.
He’s absolutely wrong about most of the rest. He’s mad at the idea of unions, MP’s and media (like myself) who entertain the threat of taking away slots, or bad mouthing the treatment of staff, but offers no justification as to why British Airways should retain the slots, or why diminishing quality of life for lifelong employees is needed, when virtually every other airline is simply reducing head count.
He went as far as to say that Parliament, which recently called the airline a “national disgrace” are operating solely on emotion, rather than fact, yet Mr. Cruz offers no statistics or facts of any kind in the piece. When it comes to the livelihoods of fellow humankind, particularly when attempting to recover from a health crisis, some level of emotional is only human.
Before British Airways became a private company, owned by a Spanish conglomerate that’s 25% owned by Qatar Airways, the British public and its government did everything to make the flag carrier ultra competitive, and that’s why the company enjoys virtually everything it has today. It wasn’t from private investment, big risks and aviation innovation but rather from a government creating – and protecting – a national brand.
Almost all the airlines slots which give British Airways a 51% monopology at Heathrow, the world’s most premium airport, were gifts from the UK over decades as a public entity, not purchases by the shrewd minds at IAG, guiding a privatized airline. If you gave me planes, and 51% of the slots at any major airport in the world, I’d like to think I could find a way to stay competitive.
Furthermore, awarded slots which were intended to connect the UK were converted from routes that benefited the UK public, like connecting regional airports, to those which created the greatest international profit centers once the company became private, including more than $1bn in revenue between just New York JFK and London Heathrow alone, annually. Well, at least last year…
If the airline isn’t offering the best service, or prices in any cabin, nor is it taking care of its own employees in the time of a global pandemic, why should it – a private company with few ties to the UK other than employment – actually benefit from the gifts of the British public?