Wednesday, August 31, 2011

BA Spring

I flew on British Airways today 31 August 2011 from Dubai to London on my way to Detroit. It reminded of a blog I read on Innovation Analysis Group entitled "Pride in BA Brand" a campaign that is supposed to improve the battered image of BA after 2 years of fighting with UNITE.
According to IAG Blog "Central to the drive is a 90-second film addressing five decades of BA, focusing on the role of BA's role in the history of aviation. Topics are set to include British Overseas Airways Corporation (BOAC), which merged with Imperial Airways in 1971 to create the modern BA, as well as Concorde. Images of BA staff are expected to feature prominently in the campaign." This comes after an internal communications campaign designed to inspire the BA Brand in the 32000 BA staff.

For some reason BA reminded me of the MENA regimes, extolling the glorious past in order to improve a present passenger perception. It is laudable that BA is addressing its staff problems because the current problem is not a passenger perception, it is a lack of consistent performance. Staff that is not smiling, cool and abrupt. A Customer Support organisation that is failing to adequately respond to its passenger complaints. A Frequent Flyer Program that does not use emails as a means of contacting it.

Basically a staff problem, the same staff and organisation that a few years back were "the World's Favorite Airline".

Just like people in MENA, BA passengers are not interested in the past but more in the present and the future and this is what BA needs to address. BA needs to convince passengers that it is aware of  the problem(s) and they are being fixed, otherwise BA might be looking at a BA Spring.

Sunday, August 7, 2011

MENA Airlines, The Elusive Recovery Revisited

As the world bounces from one financial and political crisis to another MENA airlines continue to grapple with the political events in Libya, Syria and Yemen. Most airlines in the region had a small to modest increase in passenger numbers, Dubai saw an 8.9% increase in H1 2011 compared to 2010 (24.6 vs. 22.6 million passengers); Etihad had a 28% increase in revenues due to a 14% increase in passengers carried and a 5% reduction in cost; Air Arabia Q2 net profit increased by 2% over Q2 2010 due to a 22% increase in revenue and Royal Jordanian posted a 39 million JOD ($55m) H1 loss in spite of a 3.5% sales increase, the loss is attributed to fuel prices which is 44% of operating cost and declining yields, yet the airline remains optimistic for the remainder of the year. Al Jazeera and Qatar Airways had passenger increases, and Gulf Air traffic is starting to recover coupled with a new campaign "Family First" that will hopefully put it on the road to recovery.

All the major players in the region continued to expand their networks and take delivery of new aircraft. Almost all the airlines introduced promotions to increase traffic during the Holy Month of Ramadan.

This is a region that is familiar with political turmoil and has always managed to cope and recover, but events in Syria, Libya, Yemen and Sudan are still taking their toll. High fuel prices and an escalating global debt crisis are major challenges.

Very few airlines outside those in the UAE will be posting annual profits in 2011.


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