The Poisoned Chalice - what happens next spring?

I wasn’t going to mention this subject here because when it first arose it seemed just a little too parochial - and the Manchester Evening News published my comments anyway. However, today, when the BA share price fell 6% and two leading investment banks, Deutsche Bank and ABN-Amro, recommended investors to sell, the issue became global.

Also, my critics will be pleased to note that although it’s an announcement by Mr Walsh that’s triggered the further reduction in the value of our old company, he’s not entirely to blame. And if any readers should be surprised that there are pensioners who are critical of my views about the BA CEO let me assure you there are; at least one thinks I bear him a personal grudge, and another is partner to a BA Manager - so you can make up your own mind whose view that is.

The issue which knocked more than one twentieth off the value of the airline is the announcement by Mr Walsh that to save money this winter BA is going to reduce services, temporarily retiring some of the older and less economical aircraft. Of course he could save all his operating costs and not fly any aircraft at all, but that would be silly wouldn’t it?

If you said yes, then prepare for a surprise for that’s exactly what BA is doing to the customers who regard Manchester as their gateway to the world. After over 30 years of flying non-stop daily from Manchester to New York, British Airways is withdrawing from the route. The reason - according to the maestro of aviation sales strategy - because the route is "too competitive".

Too competitive? When Mr Walsh was still in primary school I led the marketing team that worked alongside our colleagues in sales and operations to launch the Manchester - New York non-stop daily. And it was tough. Like most national carriers in those days BOAC operated from a national base, Heathrow, just as Air France did from Paris and Alitalia did from Rome. Persuading the planners at BOAC to even consider a non-stop from Manchester was close to revolutionary but we did it.

And what would BOAC have done if the Manchester-USA business had got "competitive"? Our salesmen would’ve have hit the streets, knocking on the doors of customers and their agents, reminding them of our product’s USPs, our marketing team would have hammered the message home with promotions and some advertising, and operations would have made doubly sure our airport service was second to none - all persuading our customers that we deserved their support.

But not in Willie Walsh’s BA. No, now when the going gets tough, BA drops out.

So from next October American, Delta, Continental, United and BMI will have the entire market to themselves.

Actually it’s not Willie Walsh’s fault, but the fault of those who went before him. As the Manchester-based Business Account Manager for Air France reminded me the other day, whereas she and her colleagues in most of the major airlines have full time jobs calling on their main business clients, British Airways has reduced its sales force to - nil. That’s right, zilch, zero, nada. The only tool British Airways has in its sales armoury is to lower the price. That’s it. The Easyjet/Ryanair solution.

So reverting to Mr Walsh’s decision to downsize for the winter, frankly that’s all he can do, but any salesman worth his salt knows that the job waiting for him next spring is really tough. If Walsh thinks that keeping Manchester - New York going was too competitive, wait until he finds out how hard it is to grow a small airline back into the big airline BA is today.

A number of newspapers have already asked the question I posed some while ago - how long will it be before British Airways is accused of misrepresentation - for it is de facto already "Heathrow Airways".

That begs the question, which is the national carrier? For some time after privatisation BA could claim that title with little argument, but today? Well it depends how you define "national carrier". If you mean the airline that earns most revenue in Britain, the answer might even be Emirates for with non-stop flights from Manchester, Birmingham, Glasgow and Newcastle as well as London to Dubai, Emirates is making a fortune out of travel from UK to the Far East and Australia.

Surprised? You shouldn’t be because the CEO of Emirates, the man who took the company from an ambition to the world-class airline it is today, is the man who was Manager, Midlands and Northern England for BOAC when that airline started the Manchester-New York non-stop service.

Finally, the press have already started the selection process for Mr Walsh’s successor at BA, though it might be harder than they think. One senior and much respected airline supremo said to me recently "the BA job’s a poisoned chalice now, God knows how much worse it’ll be after Walsh has finished running it down".

Poisoned chalice or not, one name that is cropping up is that of James Hogan - the Australian currently leading Etihad Airways, the UAE carrier fast-becoming a second Emirates. Hogan started in ticketing and sales for Ansett and before his Etihad post was head at Gulf Airways. An interesting insight into how different his thoughts are to those of Mr Walsh can be read at

http://www.newarabia.net/James_hogan.htm

An interesting read.