Waste of space

As we all know there lies, damn lies and statistics.

And instead of getting on with encouraging its staff to do more, better and costing less to help it out of its current predicament of flying fewer people to fewer places less often, the airline has devoted a large chunk of one page of its staff rag, BA News, to explaining why Virgin’s £64m profit is almost exactly the same as BA’s £401m loss.

Anyone who’s dealt with accountants knows how figures can be presented to reflect different faces, and for sure BA’s accounts wallahs wore out many quill pens making the £401m loss seem as little as possible - that’s what they’re paid for.

It isn’t the profit or loss that seems to matter - it’s the mindset in BA that bothers to spend time and money examining how Sir Richard managed to post a £64m profit when all they could rise to was a whacking loss. The message they convey says, "it’s OK we’re not doing as badly as it looks" - which is hardly an incentive to work harder for less.

To be fair elsewhere the CEO repeats how bad the trading environment is - but says little about how he plans to tackle it other than by paying fewer people less money. Taken to its extreme this could be the complete salvation, mothball all the aircraft, fire the staff and reduce the company’s outgoings to nil. That’s taken care of the loss then.

I repeat again, if Mr Walsh can’t get the airline into profit, then he should make way for someone who can.

Elsewhere in the paper, space is given to a self-congratulatory blub from Albion Idrizi, Commercial Manager, Kosovo and Albania who brags that he recently managed to give away two free tickets organised by the British Embassy in Albania. The letter from the ambassador "hopes that the publicity justified the donation".

Apart from the consummate sales skill Mr Idrizi shows in managing to give away two tickets (no doubt there was stiff competition from at least half of the IATA airlines in Albania) the story shows how criteria have lapsed. In BA, up to 1979 at least, we had to prove beforehand the publicity we would gain from any "trade exchange". I know because that was one of my department’s jobs. Now they only have to "hope".

Finally a footnote to reassure pensioners who are used to getting the bum’s rush from Hilary Brayfield or Clare Hatchwell (before she was elevated from Staff Travel) that rudeness is alive and well in BA.

In the latest BA News a staff member writes to complain that because BA is selling last-minute upgrades into Business class at the airport, she found she was stuck in Peasant Class despite having paid the premium standby fare which cost her three times the normal rate.

She points out quite reasonably that unless the reservations system shows that Business Class is practically empty, it’s not worth staff bothering to fork out the rip-off standby fare.

The reply from Janine Sparks, Rewards Consultant basically says "no-one forced you pay the higher rate, it’s your own fault." With that attitude perhaps Ms Sparks should be a candidate for Staff Travel Manager.

Honour and responsibility

So Mr Walsh is going to forgo £51,000 - the salary (without bonus) that he struggles by on each month - as propitiation for leading British Airways into the worst loss of its history.

Not a small part of the record loss must be laid at the fiasco of T5 and its aftermath. According to the CEO, the responsibility for that failure lay with him. The cost to him of that failure? He declined his bonus and demanded the heads of two junior directors. Well that’s alright then.

Failure in the real world impinges directly on those responsible, but not in British Airways. Perhaps football clubs (which shed managers after half a dozen lost matches) are a bit too real-world for a realistic comparison, but do you imagine that Sir Terry Leahy will still head up Tesco if it posts the equivalent of a £400m loss?

Of course the airline has its team of spin doctors, wordsmiths who’ll put a positive gloss on Armageddon if asked. They decreed that the £400m loss was primarily due to the totally unexpected rise in the cost of fuel and the loss of its premium class passengers to other airlines.

That’ll be the same fuel that Virgin, working in the same market as British Airways, had to buy. They’ll be the same premium class passengers who like to travel from airport terminals not shopping malls and on the same aircraft as their baggage.

That’ll be the Virgin that in the same year posted a £64 million profit.

But is it wise to blame the cost of fuel? The implication is that whilst Virgin’s economists bought wisely, BA’s economists bought forward when the fuel price was at its peak, in other words, it’s someone else’s fault.

Taking the blame is a matter of honour. When his Foreign office staff failed to warn Lord Carrington that Argentina might invade the Falklands, he resigned. Can we expect the resignation of anyone in BA? Who knows, but don’t bet on it being the CEO.