The situation for British Airways is unclear ahead of Brexit. Just in time for its centenary, the company is threatened by strikes, a bad reputation and increased competition.
The British airline British Airways, BA, turns 100 this year. But its reputation is not what it once was. Last September, the company's pilots went on strike over low wages, a data leak cost parent company International Consolidated Airlines Group, IAG, over SEK 2 billion, and on the reputation meter Alva's list of the best airlines in the world, BA ranks 55th out of 65.
Aviation analyst Jan Ohlsson believes that the reputation has been tarnished, among other things, by the fact that British Airways, like many other airlines, is adapting to the low-cost carriers.
”"All the rules are adapted to low-cost flights, with extra fees for baggage and service. Then you also have an old fleet that receives some complaints, you have not been the fastest in Europe in replacing your aircraft," he says.
But financially, things are still going well, BA's operating profit rose to SEK 29 billion last year.
An important explanation is BA's dominant position at London Heathrow Airport – the company has over half of the lucrative take-off and landing slots at the giant airport, according to The Economist.
And EU rules, based on guidelines from the industry organization IATA, cement the situation. If airlines use at least 80 percent of their slots, they are normally entitled to the same number of slots in subsequent years.
However, aviation expert John Strickland does not believe that Brexit will lead to BA losing slot times.
”The rules probably won't change, they are applied internationally,” he says.
According to him, parent company IAG has taken a number of measures to prevent problems that could follow Brexit. But according to Jan Ohlsson, British Airways itself has not done much.
”"Brexit will certainly be shaky for British Airways. On the surface they have done very little to prepare, either that's the case or there is a secret plan," says Jan Ohlsson.
At the same time, there are plans to expand Heathrow. This opens the door for challengers such as Virgin, who want to increase their capacity, according to The Economist.
Brexit, combined with the union problems, with the imminent threat of new strikes, could mean big problems for British Airways.
”"Having many strike days leads to reduced confidence, British Airways has not really solved that. But Britons are Britons and are rather those who take over another company than are taken over. But they have not published any reliable strategy, on paper it looks more like they are thinking like Boris Johnson and shooting from the hip," says Jan Ohlsson.
He doesn't think BA knows yet how Brexit will affect business. It will be important for the company to be able to make travel from London smooth.
”"If border crossings become more difficult, this could be circumvented by expanding the sour cream system in London, so that business people and others can cross the borders more quickly. This could be extremely important for British Airways and London, if they want to maintain their reputation as the financial capital of Europe."”
Jan Ohlsson also emphasizes that BA could benefit from being a little more assertive.
”"They've been given a bit of an arrogant label. Kindness doesn't really cost much and the friendly actor wins in the long run."”
Source: di.se
