Agents have a big role to play in British Airways’ future. Martin Ferguson talks to new UK head of sales and marketing Stephen Humphreys and chief commercial officer Drew Crawley
British Airways faced a series of headwinds between 2001 and 2010. The post-September 11 and credit-crunch years were particularly challenging. A cost-cutting programme caused major upheaval across the business and changes to cabin crew contracts at Heathrow led to bitter disputes with unions and lengthy strikes.
Then everything changed. BA merged with Iberia to create the International Airlines Group (IAG), acquired BMI and forged ahead with its transatlantic joint venture with American Airlines.
From losing almost £2 million a day in 2009, the company is now making a handsome profit and investing in its future.
Slots, tie-ups and aircraft
Chief commercial officer Drew Crawley said: “Buying BMI has given us important slots at Heathrow and scope to grow the long-haul business.
“And IAG and the joint venture with American Airlines has given us the platform to grow.
“We are spending about £1.5 billion every year for the next 10 years on modernising the fleet.
“At the moment we are taking delivery of a new aircraft once every two weeks.”
BA already has eight Boeing 787-8 Dreamliners. It will add 16 787-9s from late next year. It has also ordered 18 Airbus A350s, with an option to buy 18 more. Delivery will be spread between 2017 and 2023. The airline will gradually start to retire its 46 Boeing 747 jumbo jets over the next 10 to 12 years. Four have been taken out of service this year.
BA makes most money from long‑haul services, but is still investing heavily in refurbishing cabins of its short-haul fleet.
Crawley said the interiors of its A319s, A320s and A321s at Heathrow would be overhauled by next summer, with work on those aircraft at Gatwick to begin at the end of summer.
The main developments include new, slimline, lightweight seats, which, importantly for the airline, increase capacity by 5%.
“Until now we have not been competitive in the short-haul market. This will allow us to be competitive in terms of price and will be an attractive product to customers,” said Crawley.
New routes
This year BA introduced several seasonal short-haul leisure routes. Their success was such that more destinations have been added for summer 2015. Sales through travel agents, consolidators and direct-sell BA Holidays have all driven growth.
“The noise in the market has been staggering,” said Crawley.
“Sales have been much better than expected. I shouldn’t be surprised, because we are flying to places people want to visit.”
He said BA had no plans to increase the frequency of domestic services to Scottish airports, but said the airline was “utterly committed” to Scotland, and that agents and travellers would benefit from the extra capacity on refurbished aircraft.
Stephen Humphreys, BA’s new head of sales and marketing for the UK, said his predecessor, Richard Tams, had left the trade business in “very good shape”, but insisted there were more opportunities to grow bookings.
The Australian worked for BA as UK corporate sales manager 11 years ago before moving home with his family. Now back in the UK hot seat, Humphreys said working with the trade would be crucial to the airline’s growth.
He also urged agencies in the leisure and business travel sectors to start thinking about the opportunities that may come with the Iata-created New Distribution Capability for selling fares and add-on products. “It will enrich the way we are able to present products to customers,” he added.
China ambitions
Tams has moved to Beijing to spearhead BA’s growth strategy in China. Crawley said: “We wanted to put a heavyweight in there to show our commitment to the market. We’re not massive in China as we only have four routes – Beijing, Shanghai, Chengdu and Hong Kong – but we want to grow that. We want to develop relationships with government officials and regional airports.”
One thing BA will not be doing, however, is allowing inflight mobile phone calls. The airline is working with Inmarsat to develop high-speed Wi-Fi technology for the short-haul fleet, but Crawley said he did not expect phone calls to be permitted.