The Battle for British Airways

Willie Walsh

Willie Walsh was brought into British Airlines with a justified reputation as a tough negotiator. His toughness has been met with robust rejection by the UNITE union. What’s going on at BA?

The global credit crunch has affected every international business. While there are strategic opportunities, threats are easier to see. According to a recent Business Week report:

Some observers question whether BA will shutter or try to sell (good luck in this environment) the BA OpenSkies subsidiary, which runs flights from Paris and Amsterdam to the U.S., just a year after it was created.

Further stoking investor fear, Virgin Atlantic founder Richard Branson said that he had looked at making a bid for BA but that “the airline wasn’t worth much anymore.” Branson then urged the British government not to intervene to save BA. “It would be better to wait for its demise,” he told the BBC.

At first sight, the news seems unfathomable. It seems that an e-mail had gone out to 30,000 UK employees [June 17th 2009] asking them to volunteer to take up to a month’s unpaid leave, or unpaid work. Such an appeal for loyalty seems unlikely to succeed in a situation where the leader’s style is noted as a rather enthusiastically confrontational one.

The story followed news of a personal gesture by Mr Walsh to work for a month unpaid. But this is too easy to dismiss by workers as being alright for someone like their well-heeled leader. Nor would the new offer be helped by the news that an offer to pilots has been made of shares in the company for a new deal.

According to the BBC

Mr Walsh said BA’s drive to save cash was part of a “fight for survival ..I am looking for every single part of the company to take part in some way in this cash-effective way of helping the company’s survival plan

Strikes averted, strikes threatened

The tough stance cut no ice with the unions. A strike over the Christmas Holiday period was overwhelmingly supported, and narrowly averted through a High Court action by BA. But the Unions continued to plan strike action, probably for the next major Holiday period in the Spring of 2010. In February, The company response was again to take a tough line.

In a ­letter to BA’s 38,000 staff, Walsh offered the opportunity to become “volunteer cabin crew”. He said: “I am asking for volunteers to back BA by training to work alongside cabin crew who choose not to support a strike, so we are ready to keep our customers flying as much as we possibly can if this strike goes ahead.” BA is confident that staff can be trained and certified by the beginning of March 2010, which is the earliest possible date for a cabin crew walkout if, as expected, about 12,000 employees vote for industrial action over staffing cuts.

Discussions between Unite and BA have failed to reach an agreement so far and both sides broke their silences today to cry betrayal. BA said Unite had misled the airline by organising a strike ballot while holding peace talks while Tony Woodley, joint general secretary of Unite, said BA was attempting to break a walkout with “scab labour who have had minimum training”.

A leader’s bid for cooperation

When a leader makes a bid for cooperation, reputation is likely to play a part in its reception. An earlier post in LWD was highly critical of the BA leadership style under Willie Walsh. The outcome may help throw light on the old question of situational leadership.

Creative ideas needed

As often happens, a crisis can drive creative thinking out of the window. But are there opportunities for trying out new ideas to avoid the company sliding into further decline?

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4 Responses to The Battle for British Airways

  1. Liam says:

    Speaking strictly from a reluctant customer’s point of view, I would not miss BA at all. Consistent and willfully bad treatment by BA over the last thirty years has left me with plenty of ill will to this misbegotten enterprise. My first long haul flight on a now defunct US airline was a revelation of customer service and willingly-given basic civility.

    Regarding the post’s topic, it seems to me that it is not so much as a tough negotiator that BA needs (Thatcher Vs British Leyland anyone?), as a top-down replacement of the first x layers of management (how many layers are there anyway?).

    Operational inefficiencies can be dealt with laundry list fashion, and many aspects can be outsourced if necessary.

    Attacking the employees in the manner described smacks of “blaming the victim” if not outright “shooting your self in the foot”. Once again it will be customers that will suffer the consequences of the cancelled flights and even surlier staff.

  2. Tudor says:

    Thanks

    I’m looking forward to hearing what my students think about this little episode.

    Don’t know if you are right about layers of management. I’m not close to the company (although I was some while ago). I’d assumed the WW style would have got to grips with that. Anyone out there willing to share this information?

  3. Saiful Said says:

    Everytime I read/hear of the threat if strike by air crew, I cannot help but think of the management/treatment of the Singapore Airlines (SIA) pilot at the hands of Lee Kwan Yew.

    http://www.littlespeck.com/content/politics/CTrendsPolitics-040111.htm

    I doubt if he had any dilemmain dealing with the situation.

  4. Hugh Phipp says:

    The rights and wrongs of this sem to depend as always on what side you sit on. One thing for sure I don’t see a strike as helping BA into profit and if it weakened financially sureley jobs must follow. I work for a ‘ telecommunications giant ‘ I have seen my pay cut, my woking practices change and although I may not like it the company is making a loss and even a fool should see the books have to balance otherwise the company runs out of money and no one has a job.

    I have flights booked for a one off ‘ trip of a lifetime ‘ to the USA – possibly I will not travel again. BA have my money, can’t guarantee me a flight, the Union won’t tell when they plan to strike so I am left as one of the innocent victims of this tangled mess. I am sure BA and Unite will survive if my flight is cancelled – unfortunately the impact on me will long outlast any action. You are hitting the public as hard if not harder than BA who can proabably ride the storm.

    Don’t forget the public you disrupt are the small people most of them hard working union members who like me are on less money than the cabin crew.

    Lets have some strike dates so at least the impact on the public is small whatever the effect on BA.

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