04 March 2010

BA Tries New Cost Measures

A great piece in the Beat this week on BA's new compensation program in the USA indicates a different tack by BA in its way to try and reform its business.

Having essentially rolled over on the issue of GDS fees - it is going after - let's call them softer targets. There is a lot of fodder in the battle with the Flight Attendants - who probably have lost the hearts and minds of the consumers. BA in my opinion now has the ascendancy in that battle. So now it is going after a revised compensation plan against the agency community. This time the US TMCs.

Given the importance of the business market to BA's bottom line (particularly after the disastrous 2009) this might be a risky strategy. Given the spring shoots now appearing in the USA - it would seem unwise to stifle the growth and upset this group of people. But perhaps it feels emboldened by the pending BAAAIB alliance approval and the resulting synergies - particularly in the business market to the UK. Given the relatively small footprint by Star on the UK - US market and the paucity of Skyteam flights (just 2 767s a day between LHR and JFK) perhaps they can throw their weight around.

However I do hope someone from the DoT is paying attention. The reduction/absence of competition on the Transatlantic run does seem to allow behavior like this.

This is my opinion and take it for what its worth


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