NEWS Update
Cruz set to review BA fare structure
British Airways could be facing a serious shake-up of its operations and practices following the appointment of its new chairman and CEO.
Alex Cruz took both roles in April 2016, replacing Keith Williams who had worked at the airline for 18 years having joined from PricewaterhouseCoopers. Although Cruz has been a staff member of BA owner International Airlines Group (IAG) since 2013, his recent background is from the low-cost carrier (LCC) sector, having founded Clickair in 2006, which merged with Vueling in 2009 in a deal that saw him become CEO of the airline.
It is this experience he will draw upon as he seeks to ensure BA is fit to compete in the 21st century. Cruz said: “What Willie [Walsh, IAG
chief executive] is expecting me to do is bring in some of the ways of working that a company like Vueling has had to adopt to survive in an incredibly competitive environment. “We’re looking at many different things as to how we can make BA more competitive.
“My emphasis is not on making
BA an LCC; that would be a mistake.” Instead, Cruz said the airline would
focus on the customer and is looking to use technology to improve the experience at all stages of the journey. He also denied recent reports in the
Technology will help staff improve customer service
UK that a decision to replace a free- food service on short-haul flights with a paid offering had been agreed. Meanwhile, Cruz argued that if the airline was to compete effectively with easyJet, Ryanair and Norwegian in the short-haul arena, then fare pricing would certainly be under review. He said: “The number one criteria
for selecting an airline when you’re travelling for two hours or less is price. “To compete in short-haul
effectively we must be able to provide air fares that are competitive. Are we going to £99 fares for BA? I’m not sure.” While fares might not go as low as the LCC market, Cruz added the cost of short-haul flights from Gatwick “could come down in price soon” as the airline competes against the airport’s other key partner, easyJet.
Although
he views using price as a way of stimulating demand, Cruz added: “This is strictly not a cost
reduction exercise. I’ve been hired to make BA a more competitive company. Some will be cost reduction but some will be how we trade.”
Cruz also said the airline had
no intention currently to follow fellow IAG airline Aer Lingus into negotiations with Ryanair to provide feeder flights for its long-haul offering, in a deal that could be concluded and implemented within a year. He added: “There are a number of other things we’d want to do before getting there, so I don’t think it is for BA at this stage.” He also warned both airlines that a number of issues, from ticketing to which one takes responsibility for lost luggage, will need to be ironed out, adding: “These are big issues and I’m sure Aer Lingus will be looking at it very carefully
to ensure the passengers will be well looked after.” But Cruz said the
negotiations represented another step forward for
the LCC, which is predicting it will carry 113 million passengers in 2016 alone.
He added: “Ryanair is just beginning to understand what it needs to do [in offering] more than going from point-to-point, and that has many implications for the industry.”
Cruz also said that a return to Sharm el Sheikh in the wake of last year’s suspected bomb attack was not likely until summer 2017 at the earliest.
It’s easy to get in touch: Email
erobertson@ttgmedia.com or get in touch via Twitter at
twitter.com/banthamed
10 ISSUE 4 ROUTES NEWS 2016
routesonline.com
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