The Battle for British Airways

February 4, 2010

Willie Walsh

Willie Walsh was brought into British Airlines with a justified reputation as a tough negotiator. His toughness has been met with robust rejection by the UNITE union. What’s going on at BA?

The global credit crunch has affected every international business. While there are strategic opportunities, threats are easier to see. According to a recent Business Week report:

Some observers question whether BA will shutter or try to sell (good luck in this environment) the BA OpenSkies subsidiary, which runs flights from Paris and Amsterdam to the U.S., just a year after it was created.

Further stoking investor fear, Virgin Atlantic founder Richard Branson said that he had looked at making a bid for BA but that “the airline wasn’t worth much anymore.” Branson then urged the British government not to intervene to save BA. “It would be better to wait for its demise,” he told the BBC.

At first sight, the news seems unfathomable. It seems that an e-mail had gone out to 30,000 UK employees [June 17th 2009] asking them to volunteer to take up to a month’s unpaid leave, or unpaid work. Such an appeal for loyalty seems unlikely to succeed in a situation where the leader’s style is noted as a rather enthusiastically confrontational one.

The story followed news of a personal gesture by Mr Walsh to work for a month unpaid. But this is too easy to dismiss by workers as being alright for someone like their well-heeled leader. Nor would the new offer be helped by the news that an offer to pilots has been made of shares in the company for a new deal.

According to the BBC

Mr Walsh said BA’s drive to save cash was part of a “fight for survival ..I am looking for every single part of the company to take part in some way in this cash-effective way of helping the company’s survival plan

Strikes averted, strikes threatened

The tough stance cut no ice with the unions. A strike over the Christmas Holiday period was overwhelmingly supported, and narrowly averted through a High Court action by BA. But the Unions continued to plan strike action, probably for the next major Holiday period in the Spring of 2010. In February, The company response was again to take a tough line.

In a ­letter to BA’s 38,000 staff, Walsh offered the opportunity to become “volunteer cabin crew”. He said: “I am asking for volunteers to back BA by training to work alongside cabin crew who choose not to support a strike, so we are ready to keep our customers flying as much as we possibly can if this strike goes ahead.” BA is confident that staff can be trained and certified by the beginning of March 2010, which is the earliest possible date for a cabin crew walkout if, as expected, about 12,000 employees vote for industrial action over staffing cuts.

Discussions between Unite and BA have failed to reach an agreement so far and both sides broke their silences today to cry betrayal. BA said Unite had misled the airline by organising a strike ballot while holding peace talks while Tony Woodley, joint general secretary of Unite, said BA was attempting to break a walkout with “scab labour who have had minimum training”.

A leader’s bid for cooperation

When a leader makes a bid for cooperation, reputation is likely to play a part in its reception. An earlier post in LWD was highly critical of the BA leadership style under Willie Walsh. The outcome may help throw light on the old question of situational leadership.

Creative ideas needed

As often happens, a crisis can drive creative thinking out of the window. But are there opportunities for trying out new ideas to avoid the company sliding into further decline?


Willie Walsh makes a work-for-free plea to BA employees

June 19, 2009

Willie Walsh

Willie Walsh was brought into British Airlines with a justified reputation as a tough negotiator. He now offers an invitation to employees to work for nothing to help the airline out of its short-term financial problems. What’s going on at BA?

What happens when a business faces severe problems in short and long term? The aircraft industry is suffering at present with both direct and indirect impact of the global credit crisis.

Each individual case is being scrutinized by business school students around the world. The wider issues are shared, but a more careful attention to specifics is also necessary.

The wider global credit crunch has affected every international business. While there are strategic opportunities, threats are easier to see.

According to a recent Business Week report:

More recently, some observers question whether BA will shutter or try to sell (good luck in this environment) the BA OpenSkies subsidiary, which runs flights from Paris and Amsterdam to the U.S., just a year after it was created.

Further stoking investor fear, Virgin Atlantic founder Richard Branson said over the weekend in interviews to promote his airline’s 25th anniversary that he had looked at making a bid for BA but that “the airline wasn’t worth much anymore.” Branson then urged the British government not to intervene to save BA. “It would be better to wait for its demise,” he told the BBC.

At first sight, the news seems unfathomable. It seems that an e-mail has gone out to 30,000 UK employees [June 17th 2009] asking them to volunteer to take up to a month’s unpaid leave, or unpaid work.

Such an appeal for loyalty seems unlikely to succeed in a situation where the leader’s style is noted as a rather enthusiastically confrontational one.

The story followed news of a personal gesture by Mr Walsh to work for a month unpaid. But this is too easy to dismiss by workers as being alright for someone like their well-heeled leader.

Nor would the new offer be helped by the news that an offer to pilots has been made of shares in the company for a new deal.

According to the BBC

Mr Walsh said BA’s drive to save cash was part of a “fight for survival ..I am looking for every single part of the company to take part in some way in this cash-effective way of helping the company’s survival plan

A leader’s bid for cooperation

When a leader makes a bid for cooperation, reputation is likely to play a part in its reception.

An earlier post in LWD was highly critical of the BA leadership style under Willie Walsh

I couldn’t help noticing one further remark in the BBC’s report. It seems that negotiations are on-going, as might be expected at such times.

Details of a large pay and productivity deal are expected to be announced on Wednesday [June 24th 2009]. Ah! So maybe the story is part of a bigger game going on off stage. Maybe we are just witnessing a rather crude ploy by BA strategists in advance of those negotiations closing. Negotiations which may or may not be taking place in a spirit of cooperation on all sides. This issue calls for careful analysis.

The outcome may help throw light on the old question of situational leadership.