The long standing tussle between British Airways’ and the trade union Unite’s seems to be a never ending affair with no sign of breakthrough. BA’s Chief Executive, Willie Walsh, is been criticized for his tough stance on cabin crew travel issue and for his relentless refusal to allow peace a chance. Though he claims the strike action by cabin crew is “a failure”. On the other hand Unite Union Chief, is reported to have flown out of UK with his family for vacation at this hour of crisis. So all this drama gives this general feeling of a unholy nexus between the BA and Unite chief.
Traveling by BA is skeptical and may effect your itinerary or even expect a particular flight is canceled. Passengers are even cautioned to counter-check refund and re-booking options and also advised to look at other flights.
As this drama continues the brand BA has taken a huge beating besides losing customer’s faith. Though they announced about having proper back-ups in place and will operate additional flights to keep up with the demand, but, will this help BA as a company that is concerned about its employee and customers.
The U K’s flagship carrier, once the pride of UK had set a standard for quality, style and service. They even claimed to be “The World’s Favorite Airline”. Let’s face it; BA is undergoing a crisis management so they should now concentrate on how to bring back that old faith the quality, integrity and operation.
Reputation Management For.com finds Google search queries suggest “BA Strike” as first. Better late than never they will need to do some brainstorming to get out-off troubled waters to salvage their reputation both online and offline, after all every second passenger hits the Internet to see whats cooking
The second spell of BA strike that is drawing to a close saw the grounding of over 227 flights, which in other words would mean that one in three flights from Heathrow were grounded. The British Airways cabin crew started a three-day strike on Saturday after the talks to settle the over pay and conditions collapsed, leaving thousands of travellers in dire streets. The two consecutive crippling strikes, which extended over weekends caused travel woes for thousands of passengers ahead of the popular Easter holiday weekend. The estimated loss due to the seven day strike of the UK carrier British Airways’ cabin crew union Unite is put at about GBP100 million.
Meanwhile, the Unite union is threatening a third phase of industrial action should an agreement not be reached, soon after Easter, around 14 April. A solution to the all out war brewing between the BA management and the union regarding cost cutting measures and working conditions of over 13,500 cabin crew is no where in sight. While the workers demanded better perks,BA is sticking to its stand that even as the company registered a loss of nearly £300million in the first half, the cabin crew had faced no pay cuts and remained “the best rewarded in the UK airline industry”.
As the claims and counterclaims continue unabated, the passengers are meted out with a raw deals, blotched holiday plans and undue hardships for no fault of theirs. What is astonishing was that even when the nation is grinding to a halt by a spate of airlines and rail strikes, the government machinery does not seem to be in a hurry to resolve the issues and minimise the hardships of its citizens.
The Prime Minister Gordon Brown stuck to his opinion that “The disruption to services is completely unacceptable, it places passengers who have already booked flights in a very difficult position.”
From a reputation management point of view, the national airliner of the UK has fared really badly in handling the labour strike as it runs a risk of losing a major chunk of its customer base. As other airlines are enhancing capacity to cope with extra demand, the risk of a major revenue loss for BA is on the cards!
One friend is hoping that the BA does go ahead. He has planned a family holiday in the USA and is scheduled to return to the UK in time for a major visit from the in-laws. He has booked himself on British Airways in the hope that they strike and he can stay away throughout the in-laws visit. Every dark cloud has a silver lining, as they say.
At first it seemed like a straight forward industrial action. Now newspapers are suggesting that a power struggle with Unite union is a key ingredient along with a seeming total breakdown in relations between cabin staff and British Airways.
You can sense a massive behind the scenes PR programme from both sides as they attempt to salvage their reputations in the face of total consumer disgust at the strike. For all participants this is a high stakes strategy with a lot of questions.
- Did the BA management think they could bluff thinking that staff would never strike over christmas period.
- Does Unite’s McCluskey think he can prove his credentials and force a climb-down from BA?
- What attitude will investors take? This last question is critical. Many investors will take the view that the management need to break the cabin crews once and for all and the price is worth it if BA can achieve a lower and more flexible cost base.
- What is the long term cost to BA’s reputation? Xmas is the worst time to ruin people’s holidays.
The Stakes for Unite
Unite are trying to suggest that management are incompetent and wanting to run a Ryanair (the world’s most profitable airline, by the way) whilst management are countering with the assertion that crews are massively overpaid for what they do and the value they add.
Watching Twitter it is clear that BA is winning the reputation battle as customers beg staff not to strike. For Unite’s leadership they are charting a course that is perilous in the extreme.
For Unite, the existence of other planned strikes at Heathrow by baggage workers make this period a PR nightmare. There is a strong strong whiff of union activism which for struggling consumers, many of whom are facing job threats, is distinctly out of step with the times.
Stakes for BA
BA are facing a customer melt-down of epic proportions if the strike goes ahead. But equally problematically, investors want to see who is running the airline – management or cabin crews. Walsh feels he must impose changes and most investors agree. If management lose or even blink, expect the shares to go south, fast. Investors see this like the Miners strike in the 1980s. A defining moment in BA’s history.
Stakes for the Government:
This is a lose-lose situation for this government. They cannot support either side without alienating one community and yet platitudes just make them look weak. The sense that UK Inc is broken continues.
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.