British Airways – the world's most successful airline

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This topic contains 23 replies, has 16 voices, and was last updated by  esselle 27 May 2017
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  • Intheair
    Blocked

    This is possibly not a statement that could have been made a few years ago, but it does appear that the strategy of Willie Walsh at British Airways has been very successful in turning International Airlines Group into the most successful airline group in the world at the moment.

    Although Willie Walsh has taken a great deal of criticism from a number of quarters, he would appear to have turned British Airways from a loss-making organisation into a highly successful and efficient airline, and also appears to be doing the same at Iberia.

    Although he has been criticised for his methods in doing so, other airlines now seem to be copying his model.
    Without quoting figures, it appears that only Lufthansa are anywhere close to IAG in terms of a successful operation. The Middle East airlines are state funded and are finding that they are having to continue state funding their airlines with overexpansion. Alitalia and KLM/AF have their issues and now the Far East airlines are also struggling, with recent reports that Cathay Pacific are having to make redundancies etc.

    The list could go on, but despite troubles in recent years, Willie Walsh seems to have turned British Airways into a very successful airline. Their products are priced at an intermediate level, they offer relatively good service without being outlandish and both leisure and business customers use their services frequently, with relative yield income. Of course they have a very significant advantage in having London Heathrow as their base, with coveted slots, but notwithstanding this they seem to be leading the world in terms of financial security for their investors.

    What do other members of the forum think about British Airways and their relative success recently?


    FDOS_UK
    Participant

    What do I think?

    1 – your thinking is muddled – are you focusing on airlines or airline groups?

    2 – what are the criteria for adjudging success? (you seem to over focus on financials)

    3 – from a sustainability angle, how do we assess success v time – Ryanair is an example of a successful airline over the long run, BA is not (yet) IMO

    4 – how do we consider success in relative terms (e.g. make sensible allowance for dominance at home hubs, inexpensive labour, government action favouring home carriers etc.)

    I find BA WT+ a very good product at a reasonable price point and thus fly the airline heavily at the moment, but I wouldn’t relate that to BA being the world’s most successful airline.


    capetonianm
    Participant

    I would ask what exactly is the measure of success? I agree with some of your statement, this in particular :
    “they offer relatively good service without being outlandish and both leisure and business customers use their services frequently, with relative yield income”

    They have significant advantages which help them to achieve this, a big home market, a huge network, a versatile fleet, excellent safety record, franchised operators, and of course LHR and LGW (to a lesser extent) as hubs.

    There is a lot of negativity and resistance to BA for inferior service, and justifiably so, but they remain generally professional and reliable and when I travel with them, which isn’t much as they are in the lower half of my preferred 10 carriers for both long and short haul, I feel safe and that I am in good hands.

    I don’t know about share price increase and dividend yields as (although I am an IAG shareholder) it would be inappropriate to comment without comparing their performance with those of others. Is that a major measure of success?

    I would suspect that in terms of growth and financial performance, Ryanair is one of the most ‘succesful’ airlines around, but I wouldn’t set foot on them. I realise that they don’t give a damn about me as they have 100 million people a year who use them, and perhaps whose major criterion is perceived price and value. I also wouldn’t set foot on EK, for different reasons, but they are generally considered, or at least were until recently, to be a very successful airline, and the majority of people who use them have an excellent experience.

    Interesting discussion and I look forward to the views of others.

    EDIT : I posted this before seeing FDOS’s reply but at least he and I seem to think the same.


    SimonS1
    Participant

    It all depends on what you consider as success.

    I think WW has done a good job stitching together the likes of Iberia, Aer Lingus etc and driving out the benefits. Financial performance has been good so far and the share price held up pretty well.

    The downside is that pretty much all the cost has been taken out, little sign of reinvestment and I think it will get harder to maintain. Plus the dumbing down of the workforce (achieved by ‘smashing BASSA’ as the OP put it quite eloquently elsewhere) has implications for service.

    Nothing wrong with aspiring to be an ‘average’ airline, time will tell.


    stevescoots
    Participant

    It all depends on perspectives. For the investment markets, without checking the data but taking the comments in then I agree, successful compared to the rest.

    In terms of the product, experience and cost I would disagree. Ultimately for long term you need to have both access to capital and sustainable profits to grow and evolve because if you do not then you eventually start to drop. BA is in a good position in terms of its Hub but they know if that is at risk and much more capacity is made available for competition on their routes then they will run into strong headwinds


    Flightlevel
    Participant

    It is ofcourse relative and they do continue to invest in new aircraft every year, B787s and A350s. Operate at the most dominant international airport (not the busiest) and have a large corporate market.
    Recent requests for additional RWYs in London suggest that will continue and LHR may be OW hub while other alliances develop elsewhere (like NYC). Competition from LLCCs is not yet a problem and even EU LCCs are only healthy competition.
    Dividends and shares others can decide ‘though easyjet may not maintain high value, US airlines are hard to beat?
    Personnel wise they just about manage the ‘BA way’ i.e. no compulsory redundancies. Q.E.D?


    Edski777
    Participant

    Based on the comments made on this and other sites BA is a successful airline in financial terms. So it may be correct to conclude that on the investor ax they will score relatively high, subject to your expectations for ROI.
    However, in terms of product development, passenger comfort, customer focus, service, punctuality, catering, personnel treatment, etc. BA scores average at best and too often nowadays simply too low.
    BA is definitely helped by the constraints that LHR puts on the expansion and, as a result, competition on its hub.
    In my view BA is slowly, but steadily, declining. The focus seems to too much on the financial side of the business. BA is helped by the steady increase of passenger numbers in the whole industry. I don’t expect the prices of tickets to go any lower, but passengers will want to be felt appreciated. A more balanced focus of the BA management on all fields in their business seems therefor required. Sooner rather than later.
    The investor will probably suffer, but they have to realize that the airline business is highly competitive and doesn’t offer huge profits and dividends.


    summerfly
    Participant

    Ba is one of the most established Brands in the world and there seems to have been much emphasis on efficiency & cost cutting which have lead to high short term gains. From that perspective it’s very successful, but whether this momentum continues remains to be seen.

    Ba is very dear to me & I can even forgive the terrible club world seat if the crew & service are on form (how they used to be every time, but are now just occasionally). I fly Ba alot because they are often the cheapest (longhaul J & F), have a decent schedule & a good loyalty programme. Terminal 5 is easily accessible too. Ba is still a decent airline but it seems unclear in which direction it’s flying.


    openfly
    Participant

    Summerfly….you seem to think that BA only operates from T5, rather like BA Management. But many BA flights have the dreadful Terminal 3 thrust upon them….no Concorde Room, no BA Arrivals lounge, a “First” lounge famous for its families of mice (and dinginess), dungeon-like check-in facilities (no First Wing in T3). The only good thing about T3 is push-back! I doubt that many managers at BAs headquarters are even aware of any operation from T3!


    TimFitzgeraldTC
    Participant

    I’m surprised people keep saying they are cheap. In almost every instance of a like for like quote with direct competitors they come out considerably more expensive – especially when booking T-28 days from departure for the Premium cabins. Doing what I do every day this is most evident. They can occasionally be cheapest – maybe 1 or 2 in 10 times. But other carriers will have cheaper fares and better products for the most part.

    But BA the World’s most successful airline. Definitely a NO when looking at the whole, not just a few financials at a given moment in time.


    FaroFlyer
    Participant

    Tim TC,
    I guess that others are cheap to you as you have access to fairs that those of us booking direct cannot use. A classic example is CX. Their online fares are crazy, but I know that through agents they can be cheapest. I guess that I, like many, do not want to waste an agent’s time while checking fares


    AisleSeatTraveller
    Participant

    maybe successful (from a financial perspective) at present but will be completely screwed by Brexit (at a group level), as our European cousins extract the revenge they inevitably will on all successful elements of the British economy, an extreme challenge for Wee Willie (and idiots voted for that)


    stevescoots
    Participant

    I am pretty sure TC Agents get the same pricing levels as available online, only difference is they have the tools to be far more effciant at searching


    capetonianm
    Participant

    “I guess that I, like many, do not want to waste an agent’s time while checking fares”
    That’s what a good agent is there for, and by getting the customer the best or most appropriate fare, he’s ensuring himself repeat business.


    CathayLoyalist2
    Participant

    There is a simple formula for any successful company , IMHO, and it is this. Profitable Growth = High Customer Satisfaction + High Employee Engagement + Great Leadership. If success is down to just the financials that is as short sighted as you can get. It is all down to the CEO articulating the purpose and vision of the company he wants to see take shape. WW is clearly a numbers man and in the interviews I have seen him in,he is not a people person. Maybe WW is the equivalent of Sam Allardyce in the airline world meaning if you want to get out of a hole i.e retain your PL status and the financial gains, call for Sam aka WW. Not the type of person or company I would work for in the longer term.

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