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Posts Tagged ‘Airline reputation’
Flyglobespan: It all becomes E-Clear
February 12, 2010 | 
Author December, 09 all flights of Flyglobespan were cancelled after its parent company, Globespan, entered administration. An attempt to enter a financing deal with Jersey-based Halycon Investments broke down that led to Flyglobespan collapse.
The firm blamed for the deadly blow to Globespan was E-Clear, a credit card processing company. When passengers book tickets online with their credit card, the money goes into the booking site (E-Clear) and is then passed on to Flyglobespan. So it’s all about the way money reaches the airline after it was processed by E-Clear
It was learned that E-Clear withheld £35m from Globespan, this was money that had been paid for tickets, but was not been passed on to the airline. They also diverted £1.5 million to keep its struggling sister company Allbury Travel alive.
E-Clear was forced into administration by Globespan’s in an effort to reclaim the missing cash and Allbury Travel was closed.
This disgraced episode only raises few doubts, No credit card company can hold money of this size particularly if that business depends on cash flow, so what was Globespan doing to retain the non-payment? Secondly why did they continue to use E-Clear when payments were not being processed?
This is a strange situation and it’s getting murkier by the day and it’s time for some close introspection about the reputation of credit card processing companies. Airline reputation management is going through its most turbulent times.
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British Airways – Legal action to save reputation!
The 12-day strike called by Unite union looms large this holiday season putting hundreds of thousands of people and their travel plans in jeopardy. As British Airways fears the backlash, forums are swamped by passengers venting their anger against the insensitive approach of more than 13000 cabin crew who have voted for the strike.
The strike is planned in protest to the proposed pay and job cuts that BA has planned to ease its pension deficit of £3.7 billion which is likely to more than double to £8 billion this year. Unite union’s 13000 cabin crew are expected to join the strike even though they are paid double that of other airlines like Virgin.
In a bid to get the union to call off the strike and save its reputation, British Airways have resorted to legal action. “The airline called on Unite to call off the industrial action by 2pm today. The union has not done so and BA is now seeking an injunction to prevent the strike from going ahead,” the flag carrier’s chief executive Willie Walsh said in a statement last night. The legal action is taken on the grounds that there were irregularities in the strike ballot.
The papers are full of articles citing passenger anger at the strike which is to begin on December 22nd to Jan 2nd 2010. Would you plan your holiday booking with British Airways after this fiasco? Chances are you will not, if this issue does not resolve well.
It would almost be impossible to recover from this bad reputation for BA. The service industry is constantly dogged by bad reviews, bad press, and negative forums and an internal crisis like this will be nothing short of a disaster for BA’s reputation.
Damage limitation is what is being resorted to and BA plans last-ditch talks to solve the issue.