Chris Jasper/LONDON
British Airways has launched a corporate plan with the aim of tackling problem areas, including low yields at London Gatwick Airport, loss-making airline subsidiaries and domestic operation and poor aircraft usage.
The plan is part of a bid to secure the massive profit improvements BA financial controller Paul Aliker says are necessary if the carrier is "to make any profit" in its financial year starting in April.
The seven-point plan was approved by the BA board in early November and revealed to the carrier's senior managers last week. The crisis areas it targets are:
• low passenger yields at Gatwick;
• ongoing domestic losses;
• perceived poor value for money in terms of product spend;
• the high cost of ticket sales;
• heavy losses in BA's French and German subsidiary carriers, Air Liberté and Deutsche BA;
• staff-related problems;
• poor short-haul aircraft usage, compared with competitors.
At Gatwick, costs - only marginally lower than at Heathrow - are to be addressed and changes in the mix of aircraft and routes considered. In targeting its various loss-making services, BA has indicated that no operations can be regarded as sacrosanct.
The aircraft usage review will aim to boost average short-haul daily utilisation from 7h to 9h a day, although, here, BA is partially hamstrung by slot restrictions at Heathrow and Gatwick. BA's product spend initiative will attempt to secure "more bang per buck", says a source. The airline will attempt to reduce distribution costs, amounting to 20% of ticket price.
BA's new plan effectively supplements its new fleet and network strategy, detailed earlier this year and involving a downsizing of aircraft types in most market niches, plus route cuts in its sprawling European network. That move in turn is a key element of BA's bid to realign capacity to profitable demand - one of three pillars in a wider strategy. The other two elements are to attract more profitable business and to introduce a more efficient cost structure.
Source: Flight International
