New British Airways boss denies he will “Ryanair-ise” airline

British Airways CEO CruzThe new boss of British Airways says he has no plans to “Ryanair-ise” the airline, but that a focus on costs is inevitable given the competitive environment for both short-haul and long-haul.

In his first interview since taking over from Keith Williams on April 4, 2016, CEO Alex Cruz said:

“Am I going to “Ryanair-ise” or “Low-cost-ise” BA? The answer to that is clear – No. What is expected from me is to bring in a way of thinking so that [British Airways] can survive in a competitive environment. These are the ways of working that a company such as Vuelling has had to adapt to survive”.

Mr Cruz also pointed out that he “wasn’t a stranger to BA”.

“I’ve been on the management committee of IAG since 2013 so I’ve seen the evolution of recent decisions with regard to BA and I’ve had to support those decisions because that’s how Willie [Walsh] wants to run the place.”

The occasion was a roundtable with representatives of the British media. He addressed the unconfirmed reports about his intention of removing free catering on board European short-haul. He also announced increased new flexibility in booking with BA Holidays and the new Santiago route.

Questions were asked by a number of journalists on a number of topics. This is an edit of what he said with specific questions inserted to explain the sudden change in topic.

On his approach as CEO at British Airways

“My emphasis is not on making BA a low-cost carrier and I think that would be a mistake. It is on making it a significantly more competitive company in the way it works, both within, and towards the way it works outside to clients and customers.

If you ask the BA staff around the office they will not say I am looking to change all the products. They instead will say “Alex doesn’t like long PowerPoints, long meetings or long emails”. I am keen on using the unbelievable attributes the company has in the right way.

As we look at our challenges we are still formulating a tangible vision, but we need to spend time with people internally to do that.

We are absolutely looking at many things as to how we make us more competitive.”

On buy-on-board (the possible removal of complimentary short-haul catering)

“The emphasis in recent days has been on things that are punitive [the buy-on-board reports], but we will not look at what others are doing from a product point of view in terms of low-cost. We are also looking at how we can make our premium product more premium and we plan to introduce technology that has not been introduced anywhere in the airline industry.

So I do not want to “low-cost-ise” BA, but I do want to make it a more competitive airline overall, looking at every single part of the experience.

In that journey, surely we will analyse if the practices of some of our competitors are valid for BA or not. So all the chat with regards to charging for food. Is that something that we should be doing? Is that something that makes sense? What are our customers saying? So we are looking and listening about the sort of catering they want on a plane from an airline like us.

We haven’t concluded yet what we are going to do. But I can tell you something, and I’m intent on this for everything single thing we do. This will be my outrageous over promise. if we do decide to move to a buy-on-board set-up for European short-haul flights, it will be by far the best proposition of any airline that does it.

And best proposition means many things. It could mean what is on offer, it could mean the prices, it could mean the way you pay, it could mean how you manage the expectations of economy passengers who have paid the higher economy fares.

We are not ready to talk about it because we haven’t made a decision, despite what you might have read. I haven’t been misrepresented in those reports. Most of the papers have said in their second or third paragraph “It has yet to be approved”. Is it a relevant topic being discussed? Yes, along with another million things, some of them with no visibility to the customer and some which have.  But if we do make that decision, it will be “flashy” because it will be something that none of the existing carriers that are doing this modality of catering are doing.

I’m not interested in this [buy-on-board] as a standalone feature. I’m interested in how we are going to compete with Norwegian and Ryanair and Easyjet and all those we compete with day in and day out, and there is a formula that has been extremely clear to me over the last ten years.

British Airways short-haul seating

We have a tremendous amount of evidence that the number one overwhelming, largest criteria for selecting an airline for a short-haul experience, say two hours or less, is price, so one of the components that is absolutely clear to us is that in order to be able to compete effectively on short-haul, we need to be able to compete effectively on price.

Will we see £9.99 fares from BA? I’m not sure. I don’t think so, but the pressure on short-haul comes mostly on price.

Incidentally, from the surveys we do, we know that less than one per cent of passengers would choose their short-haul carrier based on food. I asked for that statistic after all the headlines we’ve seen this week about the buy-on-board possibility.

The food will be great, and the quality of the food. I have flown low-cost carriers four times a week every week for the last ten years, so I’ve seen the evolution of the product (food) on board. It has changed.

I think that part of what we need to be thinking about offering is a wider set of different types of food for different types of moments. When you think about travelling short-haul it seems to be a sandwich or something to drink, and then chocolate bars or muffins or crisps. I think there’s an opportunity to go beyond that, and there are other airlines in the IAG group who have experimented with some of this successfully. There are different types of passengers inside of the plane and they have different needs and different ways they want to engage with that food.”

You can’t compete with Ryanair or Easyjet on price, surely?

“It’s very unlikely that we will reach Ryanair’s cost structure. But BA’s short-haul operations at Gatwick could reach Easyjet’s cost structure and it might approach it soon and I’m bringing more vigour into that process.

We absolutely can compete on price. Can we do it on every route at every time by having half the of the plane on offer for £19? No, but we can use pricing as a lever and we can do it more often if we have cost control. I have not been hired to come here and dedicate 150 per cent of my time to do cost reduction. I’ve been hired to make BA more competitive. Some of it will be cost reduction, some will be how we trade, some by investment. A combination of multiple things.

You need a mindset and here I am. Do you think I’m satisfied that to approve a project we need nine people? No. Will we be a better airline if it only takes two people to approve that project? Yes. Will we be more agile? Yes. Most people in BA know this. I’ve got the top managers speaking about this. Now we need to do something about this.”

Will BA consider flying long-haul from Manchester?

“I’ll give you the same answer I have given my staff, and the answer is “not yet.” We are serving Manchester. We have an inherent interest in the city of Manchester because we have a pretty large call centre there and we have a fairly large number of Executive Club members from the Manchester area who are coming to Heathrow to fly to a number of places, so while I wouldn’t rule it out, at this particular time there are no plans to do so at the moment.

We will continue to monitor what opportunities surface, however. UK carriers’ Manchester propositions are mostly leisure from Manchester – Las Vegas, Florida, etc. Otherwise Manchester is being connected by non-British carriers coming in from the US or the Gulf. So how would BA fit in with that when BA is not strictly a leisure carrier? I don’t know. It’s not entirely out of the radar but it’s not in the immediate radar.”

Will the new business class on the A350 be retrofitted to the rest of the long-haul fleet?

“At the moment the new business class for the A350 doesn’t appear to be ultra-revolutionary – sufficiently revolutionary to retrofit the rest of the long-haul fleet. What I think has some merit, is to look at some of the attributes and small extras around the seat and the seat experience that we could more easily translate to the premium cabin.

I’m very conscious that we do have a job to do in looking for ways to make our premium products more premium in a way that is suitable for passengers. So potentially some of the features, yes. The seat, I’m not entirely sure. For us to commit to a new seat [across the long-haul fleet], those are big words.”

Business Traveller also published a separate article on the subject of BA’s A350 Club World seating earlier this week.

British Airways A350

On competition from the Gulf carriers (and Turkish Airlines).

“There’s a “hidden” Gulf Carrier which is Turkish, which is not a Gulf carrier but is an unbelievable powerhouse, which has one feature which we never talk about but it’s incredible – and it’s they can reach all of Europe and a great deal of Africa with single aisle carriers B737s, which means the economies of scale and cost of operating those aircraft is incredible.

Turkish is a formidable carrier, and then there’s the big three of Qatar, Emirates and Etihad. I’m not really sure that there’s a way of competing with them that is very different from the others. Yes, there’s a price component, but I think the emphasis is more around the product.

Today we have three flights to Dubai, it’s a good route, we’re picking up a lot of traffic from Europe and from the US going to Dubai. You will have seen we are going to start flying to Doha directly. We believe there’s a good opportunity to continue engaging with Qatar [Airways] in this respect.

The actual direct destinations, I think we are managing the well with capacity but if we feel we have too much we will move it around. The effect of the Gulf carriers in Asia to US traffic, probably doesn’t affect us too much, and the effect of Gulf carriers from the US to here (UK) doesn’t affect us too much. So regardless of if they affect us or not, we recognise that they are very competitive, that they are going to continue growing, that their product offering is very good, and all of those things put together will continue to motivate us to become a better airline.

Let me be specific. When I get together with 120 people (managers) at BA who I don’t know, maybe I knew twenty of them, the senior people at BA, and we use the BA theatre in Waterside [BA HQ]. I got up to the podium, said “Good morning” and I read a letter from a customer. I didn’t say anything else, and I read the whole letter. The letter was from a customer. It said:

“I’m British. I’ve always flown BA, I love BA, and I want to continue flying BA. But I’m not going to fly BA next week because it’s 700 quid more expensive and because they [the other carrier] said they are going to do this and this and this for me, and you don’t.”

So, in terms as setting the tone internally, I am setting the tone that these carriers are very much providing a fantastic service and we have to be working towards that. We have to be able to come up with propositions that go beyond the brand safety of BA and actually come up with delivering even greater service. We have great staff, but we have to think of the rest of the passenger experience.

Turkish Airlines

[At my last airline] I started a culture from scratch and we got up to 100 airplanes and I was very proud of the culture. When I came into BA I found that the degree of attachment of staff to BA the brand, BA the value, and BA the hallmark, is a specific mechanism we have internally to drive customer service within the company. It’s huge, and it’s humbling for me. What that means is I have a lot of responsibility to make it work. It’s working, but to do an even better job.

You can fly any of these other carriers and find the crew are absolutely not as experienced as BA crew. They can’t be, because they haven’t been flying for as long as BA crew. If you’ve flown for ten or 15 years you’ve come across a lot of experiences, and to have BA staff know how to deal with those situations, a lot of people pay for that. “I know I’m going to get comfort and if there’s a situation they can handle it”. People attributes like this make BA very competitive airline, but we can work on making it even more competitive”.

ba.com

Tom Otley


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  • dutchyankee

    ‘I’m not interested in this [buy-on-board] as a standalone feature. I’m interested in how we are going to compete with Norwegian and Ryanair and Easyjet and all those we compete with day in and day out, and there is a formula that has been extremely clear to me over the last ten years.’

    So I guess he isn’t interested in how BA competes with the likes of LH/LX/OS/AZ/KL/AF etc., just with the LCC’s. The Ryanair-isation of BA has begun, or considering his past job, the Vueling-isation has begun!

    • mariscalcus

      Exactly. LH and AF can compete in European short haul and offer a free bar and snacks. And I laugh at how paying for M&S is somehow sold as a positive! It is the principle and BA now want to lower their standards to compete with Ryanair and Easyjet. So, I will now fly AF or LH instead of BA. Given that Cruz came from Vueling, an airline that I had the great misfortune to fly once and which makes Ryanair look like Emirates, what do we expect? Long haul I have long since given up on BA and fly usually Qatari or SQ. Now short haul I have finished with them too. And if I really want cut price, Easyjet or Ryanair are fine at £9.99. Cruz has no idea what he wants other than to send his customers elsewhere.

  • Alex_F.

    “…it could mean how you manage the expectations of economy passengers who have paid the higher economy fares”.

    I wonder if part of the strategy with Buy-On-Board would be to provide certain passengers with a complimentary meal put together from the BOB menu. If done properly, it could work. The key would be to manage the expectations/disappointment of those not eligible for the free meal but the opportunity would be to convince those passengers to trade up next time they travel.

  • colsmc30

    Experienced Crew!!!! I flew WT+ to Sydney, mixed fleet crew and they were appalling…. Rude, rolled their eyes, and told me if I wanted a chocolate bar then I should have purchased a club ticket…. never again will I give my money to BA. The return ticket cost me £2600…. Never again!

    • John russell

      Its the old adage, Stay a loyal customer and get shafted!!

  • BIllyBleach

    £2600 for WT+! You could have flown Business class with Emirates or Qatar for that.

    More money than sense it seems

  • SamWardill

    I’ve been flying Qatar a lot recently. In fact I decided not to renew by BA gold and I’m going for Qatar platinum instead. Qatar staff are so much more customer focused than BA staff. The food, the seat, the entertainment are so much better.

    Operationally BA clearly is much better and I saw that on this trip when a delay was extremely badly handled by Qatar ground staff (however the crew were mortified and proactively asked me what had happened so they could feed back for improvement).

    For me the only big differentiator of BA at the moment is direct flights. They do fly to my main destination (KL) but they are just too expensive so I can’t justify.

  • MarkC62

    At least with Vueling, I understand, you can buy 2 seats for 1 passenger (or 3 seats for 2 passengers) so you don’t have anyone sitting right on top of you if travelling economy. I’d like to see BA offer that option as I have had too many bad experiences of people sitting next to me who spill on to my seat / personal space, or have screaming babies on their lap etc! BA are unlikely to make those types of passengers pay extra even though they make other passengers journeys uncomfortable. For the moment, as BA won’t sell me an extra seat, then if the premium isn’t too much, I will pay extra for BA’s ‘so called’ Club Europe so I have the extra space and comfort. I’d also be happy to see a section of seating on short haul, which is the same as Club (middle seat not sold) but without the trimmings of lounge access, meals etc. All I really want on board is more space and a couple of drinks! I can buy a sandwich / meal in the airport to take onboard.

  • theworldtraveller

    I think BA would so well removing the complementary catering from under 2hour flights – it’s so appalling (and unhealthy) most of the time. As long as the airport has good catering favilities it’s not a problem to buy your own choice of food and I prefer to do that. The issue comes with airports that don’t have much take away catering I guess.

    Otherwise maybe allowing customers to preorder ‘club’ style food and pay online before the flight could be a good option I would take up.

    • John russell

      Change your airline!

  • alainboy56

    MarkC62 — Good suggestions — More space less rif-raf in my face and a drink or two.
    That’s good think – let us hope BA read this suggestion – a halfway house decision.

  • FDOS_UK

    Did anyone ask him why an airline that is so profitable needs to become more competitive?

    It doesn’t make sense, at face value.

  • IanFromHKG

    “I’ve been on the management committee of IAG since 2013 so I’ve seen the evolution of recent decisions with regard to BA and *I’ve had to support those decisions because that’s how Willie [Walsh] wants to run the place*”

    Oh good – someone who will support decisions because that’s how the boss wants it. That’s just the kind of radical thinking BA needs.

    MarkC62 – 21/05/2016 13:58 : At least with Vueling, I understand, you can buy 2 seats for 1 passenger (or 3 seats for 2 passengers) so you don’t have anyone sitting right on top of you if travelling economy. I’d like to see BA offer that option

    BA do offer that option.

    http://www.britishairways.com/travel/gsanswer/public/en_us?faqid=3804&gsLink=searchResults

    • John russell

      You were a manager and not allowed to offer an opinion? What was the point of you then?

  • Cloud-9

    Perhaps the BOB food would be free for flex Y pax and OW emerald and sapphire? I have always felt that BA do not give enough respect to higher tier OW fliers: CX for example, greet them all individually (even ruby). It costs nothing but is a nice touch.

    Sadly, I fear that BA will indeed be led down the RyanairRoad.

  • mikeact

    Hand over all the Euro routes to Viewing / IB Express and then really improve/expand long haul routes and start to give the competition a real run for their money.

  • DavidEllis

    Why doesn’t BA want stand out from the crowd instead of following like sheep! Bring back a better service! This is a flag carrier Brits should be proud of! I must admit going cheap is beginning to make me feel like my loyalty is just being laughed at or ignored????

  • 1Sasboy

    You know Turkish Airlines has come a very very long way if the CEO of British Airways heaps praise on them.

    • John russell

      They have,they are rated in the top ten best business class airlines (Skytrak) BA is not in the top ten!

  • MarkC62

    IanFromHKG – 26/05/16. Thanks for the information re buying an extra seat – I may be putting that to the test in the autumn as I’ll have reached silver so I won’t need the club tier points for another month or two, so will probably fly economy if I can get a second seat at a good price.

  • JourneyingJohn

    Perhaps BA could provision their long hauls in and out of India with sufficient meals for all of their paying customers? 5 of 6 last long hauls London – India in premium economy, they’ve run out. Sorry sir, you may pay a premium for this cabin and your seat is broken but your choice is this one dish from the economy menu or the worst, returning from Delhi; I’m sorry we’ve also run out in economy and we’re not allowed to serve you from the business galley. So basically, here’ a selection of minature chocolate bars but you can go hungry…

  • Sean J

    trying to offer a better ‘premium’ product should start with the crew. yes, the crew on some routes are experienced and wonderful but an increasing number of routes have the mixed fleet crews and they are shocking in a lot of cases. I have always loved flying BA because of the crew and the service but now I feel that the company don’t care about passengers and their opinions and I have recently been using other carriers to reach my destinations. Etihad, South African, China Airlines all offer an acceptable product at better prices than BA in business so unfortunately I now choose to fly on BA less. I don’t think the company cares about my business because I am only one passenger and they are filling their planes at the moment but if they keep going down this path the future may be a different story.

  • John russell

    What a lot of nonsense, BA are no longer in the top ten of best business class Airlines-just look at their ying and yang shoe boxes they call business class seats!!! BA stands for Budget Airline, designed for the shareholder NOT the customer. Perhaps if QUALITY was your first priority you would not face Ryanair and Easyjet. You ought to get out more and travel on business class with these Airlines-Qatar,Emirates,Cathay Pacific,Singapore Airlines, EVA,Lufthansa,Turkish Airlines,ANA,Air France,Etihad and Air New Zealand. So instead of issuing BA propaganda read the thousands of complaints on line about BA’s “Service”

  • TheSnail

    I had to mis-fortune of flying the new BA format (LHR-DUS). Flight time was just under the hour. I was sat in row 22 and the crew with drinks and food did not make it past row 17. You can only pay by card so, as in this case, if they only have one machine working and you are sat in the wrong place then tough – not even a drink of water! Based on my experience Ryanair offers a better service at a lower price and I never thought I would say that.