British Airways

Topics: British Airways, British Overseas Airways Corporation, Airline Pages: 18 (6059 words) Published: June 27, 2013
MQM 421 Case Assignment 2
Due July 7

Read the assigned case. Complete the following:

1. Using the relevant concepts from your reading (your text and Kotter reading) and our discussion on groups and teams, analyze why the change case described in the article was successful. 2. Be sure to use concepts clearly and to provide clear and specific evidence

Expectations:

• Your papers should be no more than 4 pages in length • Papers will be typed, double-spaced with 1” margins. Font should be 12-point Times-Roman • Professional work is expected.

Changing the Culture at British Airways

I remember going to parties in the late 1970s, and, if you wanted to have a civilized conversation, you didn't actually say that you worked for British Airways, because it got you talking about people's last travel experience, which was usually an unpleasant one. It's staggering how much the airline's image has changed since then, and, in comparison, how proud staff are of working for BA today. British Airways employee, Spring 1990

I recently flew business class on British Airways for the first time in about 10 years. What has happened over that time is amazing. I can't tell you how my memory of British Airways as a company and the experience I had 10 years ago contrasts with today. The improvement in service is truly remarkable. British Airways customer, Fall 1989

In June of 1990, British Airways reported its third consecutive year of record profits, £345 million before taxes, firmly establishing the rejuvenated carrier as one of the world's most profitable airlines. The impressive financial results were one indication that BA had convincingly shed its historic “bloody awful” image. In October of 1989, one respected American publication referred to them as “bloody awesome,” a description most would not have thought possible after pre-tax losses totalling more than £240 million in the years 1981 and 1982. Productivity had risen more than 67 percent over the course of the 1980s. Passengers reacted highly favorably to the changes. After suffering through years of poor market perception during the 1970s and before, BA garnered four Airline of the Year awards during the 1980s, as voted by the readers of First Executive Travel. In 1990, the leading American aviation magazine, Air Transport World, selected BA as the winner of its Passenger Service award. In the span of a decade, British Airways had radically improved its financial strength, convinced its work force of the paramount importance of customer service, and dramatically improved its perception in the market. Culminating in the privatization of 1987, the carrier had undergone fundamental change through a series of important messages and events. With unprecedented success under its belt, management faced an increasingly perplexing problem: how to maintain momentum and recapture the focus that would allow them to meet new challenges.

Crisis of 1981

Record profits must have seemed distant in 1981. On September 10 of that year, then chief executive Roy Watts issued a special bulletin to British Airways staff:

British Airways is facing the worst crisis in its history . . . unless we take swift and remedial action we are heading for a loss of at least £100 million in the present financial year. We face the prospect that by next April we shall have piled up losses of close to £250 million in two years. Even as I write to you, our money is draining at the rate of nearly £200 a minute. No business can survive losses on this scale. Unless we take decisive action now, there is a real possibility that British Airways will go out of business for lack of money. We have to cut our costs sharply, and we have to cut them fast. We have no more choice, and no more time .

Just two years earlier, an optimistic British government had announced its plan to privatize British Airways through a sale of shares to the investing public. Although...
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