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Future Of BA Under Walsh

Wed Mar 09, 2005 3:41 pm

Wille Walsh will join BA on May 3, and formally take over from Rod Eddington in September. From what I have read he should be up to the job. Eddington certainly didn't have a smooth ride with all the travails he had to endure. But, he has come through with flying colors!

While at AerLingus, WW was credited with having turned the airline around, albeit with a workforce reduced to 3500 from 6800. BA currently have around 46000.

In 2008 BA will consolidate all operations at LHR in T5. Their planned £300M ($700M) savings in employee reductions are proving harder to achieve by 2006 so have been extended to 2007.

They also want to achieve an operating margin of 10%. While at EI, WW attained 9.1%. (Pretty good going, BTW)!

So, what will be the future of BA with WW at the helm?

More employee cuts? Definite. More Airbus in BA's fleet? Possible. Complete restructuring of short-haul? Definitely possible (Ala EI). Full merger with EI and IB to compete with AF/KLM and possibly AZ? Very possible.

It will be an interesting transition. Your thoughts?
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RE: Future Of BA Under Walsh

Wed Mar 09, 2005 5:09 pm

Quoting Scotron11 (Thread starter):
Complete restructuring of short-haul? Definitely possible

I have friends at BA already working on the shorthaul overhaul project. I believe it is already starting to show results.
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RE: Future Of BA Under Walsh

Wed Mar 09, 2005 6:10 pm

I hope WW will not turn BA into a low cost airline like he did with EI.
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RE: Future Of BA Under Walsh

Wed Mar 09, 2005 6:24 pm

I say give him chance to actually start work and become involved with the operation. BA just issued a plan for the next few years, which seeks to prepare the company for the move to T5 and remain profitable. This already means lowering the cost base, but low cost doesn't have to imply poor service. It simply means having a cost base that allows for a successful operation.

I think the future will be pretty much as it has been over recent years.
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RE: Future Of BA Under Walsh

Wed Mar 09, 2005 6:39 pm

As 'Skippy' Eddington has generally done a good job, I see no massive changes.
Short Haul has improved out of all recognition in recent times, in terms of costs and profitability, though there is some way still to go here, so while there are no prospects of a new aircraft order before a 767 replacement around 2010, there are 15 A320 series still on option, a way perhaps to get rid of the remaining B737-300/400/500's at LGW?
Some of these, like the -300/500's are from other operators, all are aging, eliminating these types from the fleet will reduce costs, including maintenance.

But Eddington deserves credit for sorting out LGW to the extent he has, under Alying LGW got in such a state BA might as well have dug a big hole near LGW and poured wads of cash into it.

But problems with short haul profitability go back much further, we will see if Walsh can carry on Skippy's efforts here to bring this part of BA into long term profitability.
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RE: Future Of BA Under Walsh

Mon Mar 21, 2005 6:31 am

I too hope that WW does not take BA down the low-cost route. It is possible to reduce operating costs and consequently air fares without destroying an airlines brand. However, WW seems very able and probably realises that BA's image and brand is important for customer loyalty and hence I think he is unlikely to change that. I reckon an all Airbus short-haul fleet is very much on the cards. Hadn't thought about an BA/IB/EI merger but I think consolidation in the EU airline industry would make sense if correctly managed.
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RE: Future Of BA Under Walsh

Mon Mar 21, 2005 6:36 am

I dread to think what that horrid man is going to do to BA, particularly concerned about domestic/short haul. I cant help thinking I wont be getting me free cuppa and hot breakfast much longer.

I wish WW would go back to EI and why might I ask do we have Australian and now Irish men in charge. fetch back Lord King!
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RE: Future Of BA Under Walsh

Mon Mar 21, 2005 6:42 am

Quoting Orion737 (Reply 6):
I dread to think what that horrid man is going to do to BA, particularly concerned about domestic/short haul. I cant help thinking I wont be getting me free cuppa and hot breakfast much longer.

I very much doubt he will change this, the situation with BA is very different, just look at their proibility in the last stats,

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RE: Future Of BA Under Walsh

Mon Mar 21, 2005 7:04 am

BA is a completely different beast than Aer Lingus. BA has far more premium pax for starters and WW wouldn't want to piss of BA's bread and butter. I'm sure he realises this.
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RE: Future Of BA Under Walsh

Mon Mar 21, 2005 7:31 am

The above link takes you to the BA press release concerning Walsh's appointment as CEO designate. Both Martin Broughton (BA Chairman) and Rod Eddington were full of praise for Walsh's work at EI. In particular, the following from Broughton: -

“Following the tragedies of 9/11 many commentators expected Aer Lingus to follow airlines such as Swissair and Sabena into oblivion but Willie salvaged the Irish carrier and saved thousands of jobs.

“Willie was determined that Aer Lingus had to provide what its customers demanded and that was a low price for an air ticket. At British Airways he will focus his efforts and energies on what our customer base demands which are quality service and value for money.”

The second paragraph shows that the BA Board recognise that at EI Walsh had to go down the LCC route for the carrier to survive, but that BA has a very different customer base with that key phrase "quality service and value for money."

For me BA has to have one of, if not the best, online booking systems as you can find your cheapest available fare easily over the space of up to a month, on every available flight, allowing the cheapest itinery to be constructed. They've shown they can compete with FR and U2 and the focus now will be on improving shorthaul returns.

Apart from the continued need to look at cost savings, and planning for the 2008 move to T5 over the next couple of years I think BA will look at: -

* 737 (And possibly 757) replacement
* Review of FIRST - available on less routes but really pushed as a premium product where available.
* Launch of a second generation Club World Flat Bed (Tied in with above).
* Further streamlining of CitiExpress operations.
* Continued moves to reduce the company debt burden.

Whatever happens, the King/Marshall days are now consigned to history and BA under Broughton/Walsh will be an airline looking to focus clearly on a quality product, offering value for money, but offering a clear return in all areas. The dropping of CCS, BOG, RYD and JED shows the more ruthless BA of the last few years will not maintain routes simply for presteige or history.
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RE: Future Of BA Under Walsh

Mon Mar 21, 2005 12:34 pm

Mr Welsh has to decide about the future of BA. Mr Eddington's strategy seemed to be streamlining BA and making smaller. Eddington played the quality carrier card.
LH and AF had a different strategy. They were looking for becoming bigger and bigger.

Both strategies were succesfull during the recent turbulent times. Mr Welsh has to decide if he want to keep on with Mr Eddingtons strategy or if he will keep up with mass carrier LH and AF.
This strategic decision will also lead the way for BA's future long haul fleet. But if he don't go after sice the next couple of year, BA will have lost contact to the big ones LH and AF. But that doens't mean that the strategy keeping BA luxurious and smaller isn't the more profitable one.
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RE: Future Of BA Under Walsh

Mon Mar 21, 2005 10:04 pm


I've been traveling frequently on Aer Lingus recently. I wouldn't include it on the LCC companies bucket. It has a fleet of about 40-50 planes, has their own handling in Ireland and LHR.

As it has been mentioned before EI's strategy was to meet their customers needs, meaning attractive fares.

Most people don't mind to pay 4 euros for a sandwich or 8 euros for a full Irish breakfast (with the Irish Times included) on board, after having paid 9 euros (plus airport taxes) for a LHR-DUB flight. If you get an early morning flight and decide to have your breakfast at the airport it will cost you the same.

What about Iberia? They don't seem to reduce much their fares but are charging for the food on board.

I believe Mr. Walsh will do a good work on BA and the changes/strategies he'll follow will be in accordance with BA's market and customer's needs.

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