Matt Nieto

3/29/14
GSB 737
British Airways Case Analysis

1. Life before the turn around at British Airways was very bad. The
crisis at BA started in the year 1981. This is the year that BA was
expected to lose at least 100 million pounds. The rate of loss was
calculated at 200 pounds a minute by chief executive Roy Watts.
The culture at BA was greatly affected by the divide between the
two airlines they owned, British European Airways and British
Overseas Airways Corporation. Each airline still employed
separate chairman, board, and chief executive. The workforce
employed by BA neglected to realize its inefficiencies because of
the government support that influenced a deceiving string of
profitable years. The workforce and management did not see
change as a necessary thing because of the profit they assumed
was in direct relation their work ethic.
2. When Sir John King was appointed chairman in 1981, BA took a
positive turn. King was perfect for the job because he was
already wealthy and was not doing the job simply for a paycheck.
He could devote his time efficiently in order to effectively make
changes. The first critical move King made was launching his
survival plan, which started with the reduction of staff from 52

thousand to 43 thousand in just nine months. He further reduced

BAs staff to 35 thousand. This was close to a decrease of 25
percent and was critical in saving BA from going bankrupt.
Kings next big change was hiring Gordon Dunlop as the
companys accountant. Gordon was vital in determining the
financial changes that needed to be made in order to bring BA
out of the red. King then decided he needed to change the
airlines image and hired Saatchi and Saatchi. This was a clear
indication that BA was completely changing. The marketing
campaign called, Manhattan Landing, was launched in April
1983 and was a commercial that could be seen globally.
The transformation continues with the hiring of Colin Marshall as
chief executive and it was Marshall who greatly increased the
attention to customer service. He instilled an education model
that helped the airline change their customer service procedures
completely. He introduced the Putting people First program and
this was crucial in BAs customer service turn around. Employees
and management warmly received it with 40,000 employees
participating.
3. The case concludes with BA turning their finances around and
coming out of bankruptcy by the 1990s. A lot of employees
believed that the company made a positive change from where
they were in the midst of their crisis, but believe that other
fundamental changes needed to be made. Additionally customer
service programs were introduced, but they did not carry the

same effect as the PPF program and were not seen as sincere. I
believe that more change needs to be made to continue the
trend of changing the culture. A decade seems like a long time,
but in business terms it really is not. The cost cutting will be
frightening to employees who might fear their jobs are in
jeopardy, so their must be some type of loyalty measures
implemented to get the most out of every single employee. The
competition of other airlines will also force BA to make crucial
decisions and continue adapting to an ever-expanding market.
New measures and procedures will need to be introduced and
the problem solving will need to happen faster because of the
competitive market.