During the volcanic ash and more recent snow episodes there were countless media shriekings about people "stranded" or "stuck" in Europe.
Perhaps the most vitriolic was by a lady journalist from the Independent who said she had been stuck at Geneva Airport which was another place affected by snow. It wasn't just Heathrow.She was obviously suffering considerable distress when she wrote her article and had even lost the ability to figure out how to painlessly and pleasurably eat a large Toblerone. You don't just stick the whole thing in your mouth dear or those ridges will indeed be painful.Just break the triangles off one by one and all will be well. Much more alarming was her rant about a Captain trying his best to keep the passenges up to date with a fast changing situation and her alarming fantasising about stabbing anyone present, past or future who looked as if they might have anything to do with BA. It was an extraordinary outburst, forgiveable perhaps if she had no option but to be incarcerated in Geneva Airport, or any other place, for three days. But she did have an option as did tens of thousands of other "stranded in Europe" people last Spring. Even a basic knowledge of geography should tell most that Europe is not a series of islands. Apart from the UK and Ireland it is one continuous landmass= roads and railways connecting everywhere to everywhere else.Did she sleep through all her geography lessons at school? If so, the purchase of a map at the Geneva Airport bookstall would have been a good investment and enabled her to either while away the time in deep learning or get a clue that Geneva is linked to Paris by train. It takes three hours. There are then trains from Paris to Calais Ville via Boulogne. After that a short taxi ride takes you to Calais port where you are spoiled for choice of frequent ferries to Dover and bingo,- in a matter of hours you are no longer stranded at Geneva but on firm British soil and less than a hundred miles from London.
The airlines perhaps made a big mistake when most dumbed down their route maps by taking out all but the most basic information and making them totally uninteresting. They could have left them as they were as an aid to those who they had to leave "stranded" or "stuck". Maybe now they should hand out wartime style escape maps to all arriving passengers so that in extremis they can see where they are, where they have come from and how to get back there without an aeroplane. "Oh look,- it's land nearly all the way".
Thursday, 30 December 2010
Airline Liability-Snow Nonsense.
For the second time this year, airlines are facing having to compensate passengers whose flights have been delayed or cancelled due to natural factors entirely outwith their control. Under normal concepts of justice a party can only be responsible for an act or omission by itself or a contractor. That is fair.
Some time ago the EU enacted laws under which an airline which failed to deliver the contracted transportation either reasonably to schedule or not at all has been liable to pay compensation.Its purpose was to avoid airlines cancelling flights for their own convenience or to avoid losses on lightly booked services. Again,fair enough. Since then though governments have found that by decreeing that this extends to flights disrupted by volcanic dust, snow or other unavoidable natural causes they themselves slip neatly off the hook even if their own decisions grounded flights. This is particularly useful,- and immoral,- when the act or mmision is actually one of their own. The panic measures taken during the volcanic dust episode,which happened during days of visibly clear blue skies over the UK,-were absurd and costly backside covering. This activity appears to be normal in the civil service where accountability for anything is rarely accepted.Bonuses flow regardless.
The whole principle needs urgent review but is unlikely to get it. Just as there is little incentive for EU and state politicians to tackle the whole question of their own pay and allowances, there is none for them to probe anything which would move responsibility away from the airlines to themselves. They can not even face people up to the fact that its is up to themselves as users to take out appropriate insurance. Unfortunately the idea that anyone should have personal responsibility for anything they do does not sit well with the European view that someone (else) is always liable. Even "Act of God" does not wash although to be fair it is unlikely that any Almighty gets involved in the minutiae of daily volcanic or meteoroligical activity.
Unfortunately for the airlines,the producers of mass, safe, low cost travel and huge economic benefits to business and tourism, they are too often portrayed as carbon emitting, environment destroying hooligans by the green lobby and as wonderful cash cows there for the milking by governments. On bad days, their customers join in the chorus ,screaming for more regulation or just plain cash handouts for the misdeeds of volcanos, snow or any other thing. Airlines are seen as ineligible for the normal sense of natural justice or fair play. They are vilified and the baying mob of EU governments and upset passengers says someone else,- i.e.they,- must pay. Despite all their efforts and all they do ,they have no sympathy when the chips of "who pays?" are down. Outside the EU there is more understanding of the realities and airlines fly in less hostile skies.Some are even appreciated for their contribution to national economies.
Some time ago the EU enacted laws under which an airline which failed to deliver the contracted transportation either reasonably to schedule or not at all has been liable to pay compensation.Its purpose was to avoid airlines cancelling flights for their own convenience or to avoid losses on lightly booked services. Again,fair enough. Since then though governments have found that by decreeing that this extends to flights disrupted by volcanic dust, snow or other unavoidable natural causes they themselves slip neatly off the hook even if their own decisions grounded flights. This is particularly useful,- and immoral,- when the act or mmision is actually one of their own. The panic measures taken during the volcanic dust episode,which happened during days of visibly clear blue skies over the UK,-were absurd and costly backside covering. This activity appears to be normal in the civil service where accountability for anything is rarely accepted.Bonuses flow regardless.
The whole principle needs urgent review but is unlikely to get it. Just as there is little incentive for EU and state politicians to tackle the whole question of their own pay and allowances, there is none for them to probe anything which would move responsibility away from the airlines to themselves. They can not even face people up to the fact that its is up to themselves as users to take out appropriate insurance. Unfortunately the idea that anyone should have personal responsibility for anything they do does not sit well with the European view that someone (else) is always liable. Even "Act of God" does not wash although to be fair it is unlikely that any Almighty gets involved in the minutiae of daily volcanic or meteoroligical activity.
Unfortunately for the airlines,the producers of mass, safe, low cost travel and huge economic benefits to business and tourism, they are too often portrayed as carbon emitting, environment destroying hooligans by the green lobby and as wonderful cash cows there for the milking by governments. On bad days, their customers join in the chorus ,screaming for more regulation or just plain cash handouts for the misdeeds of volcanos, snow or any other thing. Airlines are seen as ineligible for the normal sense of natural justice or fair play. They are vilified and the baying mob of EU governments and upset passengers says someone else,- i.e.they,- must pay. Despite all their efforts and all they do ,they have no sympathy when the chips of "who pays?" are down. Outside the EU there is more understanding of the realities and airlines fly in less hostile skies.Some are even appreciated for their contribution to national economies.
Wednesday, 22 December 2010
Heathrow- A Glimmer of Hope for the Managers.
From amidst reports that the Heathrow terminals today again resemble zoos, with more people admittedly getting away but thousands from the cancelled flights still there trying to get last minute seats from people who don't show up or whose connections don't arrive, a glimmer of hope for the beleagered BAA and airline managers,- as distinct from their leaders.
For most of the airport and resident airlines' managers there are two distinct parts of the year. From October to March they are heads down into the planning and budget process for the next summer peak season. The battles flow to and forth as the line people battle for money and resources from their finance departments. The line is trying to maximise performance and customer service, whilst the finance departments are pushing them to minimise costs. The senior managers who present the budgets are repeatedly told to go back and try harder until they finally return with a figure which the finance people reluctantly accept. At this point the airport or airline General Manager responsible is assured of surviving his or her forthcoming annual review and may now get a bonus."Good budget,- well done" is what he or she hopes to hear even though they know respite is only temporary as the whole edifice is built on sand. There is at least temporary remission from being battered to death.
The second part of the year, from April to September takes in the peak operating season for which the planners were trying to get the required resources. After a lull maybe in April and May, the pressure starts to build up, any resource gaps begin to show and sooner or later the daily operation begins to crack. At this point the battering resumes with a new intensity, this time from the CEO and other people who were the original ultimate source of the big "No" to the additional spend. All delayed departures are allocated a code, identified as "late baggage" or similar. In fact the real code should be "CEO" or "Finance Director" or "Head of Service Delivery". Instead it is the unfortunate line General Manager standing next to the (planned)disaster who cops it.
For those about to go into the final rounds of the budget after Christmas,the current disaster is a Godsend. Which Finance Director or CEO or other will dare to kick "Essential additional equipment for snow clearance and emergency customer care" into the "Go back and do it again" long grass.The operators might,just for once, get all they need.
Go for it ladies and gents!
ps While the above deals with the physical resources issue ,it still leaves all levels of management and supervision with the question about the whole service ethos and whether every ounce of effort and energy have been correctly and creatively deployed to deal with the situation prevaling since last Saturday. Why did the Salvation Army, that magnificent last resort of customer service when all else has failed, have to dish out warm drinks? There are plenty available in the terminals. Where were the BAA and airline people? Why weren't they tipped out of their offices and straight onto the front line to do and hand out whatever was necessary?
For most of the airport and resident airlines' managers there are two distinct parts of the year. From October to March they are heads down into the planning and budget process for the next summer peak season. The battles flow to and forth as the line people battle for money and resources from their finance departments. The line is trying to maximise performance and customer service, whilst the finance departments are pushing them to minimise costs. The senior managers who present the budgets are repeatedly told to go back and try harder until they finally return with a figure which the finance people reluctantly accept. At this point the airport or airline General Manager responsible is assured of surviving his or her forthcoming annual review and may now get a bonus."Good budget,- well done" is what he or she hopes to hear even though they know respite is only temporary as the whole edifice is built on sand. There is at least temporary remission from being battered to death.
The second part of the year, from April to September takes in the peak operating season for which the planners were trying to get the required resources. After a lull maybe in April and May, the pressure starts to build up, any resource gaps begin to show and sooner or later the daily operation begins to crack. At this point the battering resumes with a new intensity, this time from the CEO and other people who were the original ultimate source of the big "No" to the additional spend. All delayed departures are allocated a code, identified as "late baggage" or similar. In fact the real code should be "CEO" or "Finance Director" or "Head of Service Delivery". Instead it is the unfortunate line General Manager standing next to the (planned)disaster who cops it.
For those about to go into the final rounds of the budget after Christmas,the current disaster is a Godsend. Which Finance Director or CEO or other will dare to kick "Essential additional equipment for snow clearance and emergency customer care" into the "Go back and do it again" long grass.The operators might,just for once, get all they need.
Go for it ladies and gents!
ps While the above deals with the physical resources issue ,it still leaves all levels of management and supervision with the question about the whole service ethos and whether every ounce of effort and energy have been correctly and creatively deployed to deal with the situation prevaling since last Saturday. Why did the Salvation Army, that magnificent last resort of customer service when all else has failed, have to dish out warm drinks? There are plenty available in the terminals. Where were the BAA and airline people? Why weren't they tipped out of their offices and straight onto the front line to do and hand out whatever was necessary?
Monday, 20 December 2010
Heathrow- White but in the brown stuff.
As much of the Sky and BBC 24 connected world knows, UK Plc is suffering a bit of embarrassment over the inability of the world's busiest international airline hub to recover quickly from snow which last fell on Saturday. It is now Monday night and Tuesday looks little better with the southern runway billed to stay closed, presumably still snow and ice covered. Why? The root of the problem is unclear-not enough machines? manpower?fluid?Heath and safety issues? What? No clues have emerged from the BAA and BA leaders who have appeared on our screens. All they have done is to say they are working on it, disruption will last for some days, airlines which don't announce their cancellations are bad and passengers whose travel isn't really necessary (in Christmas week?) should do them a favour and cancel, presumably to hold Christmas in June or some other time convenient to the operators.
It is all extraordinary,- or appears to be. Maybe it isn't but clearly Joe Public is not to be trusted with real information. The same appears to be happening at Eurostar over at St Pancras. Intending passengers are required to queue in the freezing cold outside in a line stretching back to the British Library. Presumably it is considered good for them and anyway keeps them from cluttering up the very pleasant cafe and shop lined interior of the building .The ticket office is closed until New Year as "We have no more tickets to sell". Neither there nor at Heathrow do there appear to be enough staff and their leaders simply walking the floor giving information and solving whatever problems there are as best they can. Few probably have "the authority" to do much or make even minor non standard decisons anyway. This is another recent problem in some service businesses. The Heathrow terminal situation is almost becoming a humanitarian problem now.The foreign airlines seem to be coping much better but the home teams seem just overwhelmed. Again the question, "Why?". No well trained army of Head Office and other volunteers able to provide real help or a friendly face? Are the basics of friendly faces and care of people not a dominant part of the corporate ethos? We are talking airports, airlines and rail companies here,- not banks.
Philip Hammond, the Transport Minister, says that there will be a thorough assessment of all the problems and their solutions once life is back to normal. Very sensible and he looks as if he will keep it objective.Let's hope though that rather than entrusting the task to civil servants he will recruit a team well versed in organisational structures, the mechanics and the detail of making airports run, and the concepts and fundamentals of of customer care. Key is the need to look beyond "who didn't order the snowplough?" and who did what on the day to the underlying corporate ethos. What sort of people run the companies concerned? What are their core vaues? As well as vital profitability ,are they really all about genuine customer service and care when things go wrong? How are the hands-on operational professionals regarded in the company and are they listened to or scorned? What happens in annual reviews to people who champion spending money on an occasional but vital need? One suspects that they may have a hard time of it and risk being labelled as lacking commercial acumen or awareness and generally rather boring compared to the more glitzy and higher profile marketing and other folk. It's worth a probing look. Nearly every disaster is a long time in the making before it happens and it stems from roots far from the scene and time of the event and people on whose watch it eventually happens. Sadly though ,courts of enquiry and the like often don't look far enough back along the chain of events .It is usually those holding the ball on the day who end up in the dock. The blame is allocated,scapegoats selected and sacked, imprisoned or just villified and the world moves on without learning the lessons .The really guilty escape unscathed.That's what happened when Heathrow's Terminal 5 originally opened and there is a danger it will happen again.Over to you Mr Hammond.
It is all extraordinary,- or appears to be. Maybe it isn't but clearly Joe Public is not to be trusted with real information. The same appears to be happening at Eurostar over at St Pancras. Intending passengers are required to queue in the freezing cold outside in a line stretching back to the British Library. Presumably it is considered good for them and anyway keeps them from cluttering up the very pleasant cafe and shop lined interior of the building .The ticket office is closed until New Year as "We have no more tickets to sell". Neither there nor at Heathrow do there appear to be enough staff and their leaders simply walking the floor giving information and solving whatever problems there are as best they can. Few probably have "the authority" to do much or make even minor non standard decisons anyway. This is another recent problem in some service businesses. The Heathrow terminal situation is almost becoming a humanitarian problem now.The foreign airlines seem to be coping much better but the home teams seem just overwhelmed. Again the question, "Why?". No well trained army of Head Office and other volunteers able to provide real help or a friendly face? Are the basics of friendly faces and care of people not a dominant part of the corporate ethos? We are talking airports, airlines and rail companies here,- not banks.
Philip Hammond, the Transport Minister, says that there will be a thorough assessment of all the problems and their solutions once life is back to normal. Very sensible and he looks as if he will keep it objective.Let's hope though that rather than entrusting the task to civil servants he will recruit a team well versed in organisational structures, the mechanics and the detail of making airports run, and the concepts and fundamentals of of customer care. Key is the need to look beyond "who didn't order the snowplough?" and who did what on the day to the underlying corporate ethos. What sort of people run the companies concerned? What are their core vaues? As well as vital profitability ,are they really all about genuine customer service and care when things go wrong? How are the hands-on operational professionals regarded in the company and are they listened to or scorned? What happens in annual reviews to people who champion spending money on an occasional but vital need? One suspects that they may have a hard time of it and risk being labelled as lacking commercial acumen or awareness and generally rather boring compared to the more glitzy and higher profile marketing and other folk. It's worth a probing look. Nearly every disaster is a long time in the making before it happens and it stems from roots far from the scene and time of the event and people on whose watch it eventually happens. Sadly though ,courts of enquiry and the like often don't look far enough back along the chain of events .It is usually those holding the ball on the day who end up in the dock. The blame is allocated,scapegoats selected and sacked, imprisoned or just villified and the world moves on without learning the lessons .The really guilty escape unscathed.That's what happened when Heathrow's Terminal 5 originally opened and there is a danger it will happen again.Over to you Mr Hammond.
Wednesday, 15 December 2010
UK Cuts- Railways do Well
The previous Labour Transport Minister,Lord Adonis was probably the best we have seen in that role for some time.Approachable,genuinely able to talk to anyone at all in an unpatronising fashion, and a good listener and without a train of political or social baggage and hangups he was an unusual politician and an even more unusual Minister in that he had a deep and enquiring interest in his subject exemplified by his two week round Britain rail trip on 2008. He also produced a much needed definitive plan for the rail network, including High Speed 2,electrification of the North Western Liverpool-Manchester-Preston-Blackpool triangle,and the Great Western main line through to Wales, including its Oxford and Newbury branches, the completion of Crossrail and Thameslink (let's forget that was once called Thameslink 2000), the replacement of the veteran but excellent diesel HSTs and the addition of more carriages in various areas. It was a difficult act to follow, especially when Ministers have been told to come up with major cuts almost everywhere.
Transport and rail in particular is a difficult subject to get to grips with. Fortunately in the current circumstances it has short , medium and long term implications for social mobility (literally),employment,the cost of manufactured good, efficient distribution of goods and services,blurring north/south divides, living standards, quality of life particularly for commuters,as well as pollution levels ,and energy policy. In short it has many constituents all of whom need it to work well, efficiently, safely and as pleasantly as possible. It working- or more powerfully not working -can have a significant effect on ballot boxes all over the country.
The incoming Minister, Phil Hammond and his aide, Theresa Villiers, have wisely and successfully championed continuing as much of Adonis' rail plans as possible and almost the entire programme has survived, albeit with some timescales stretched by a couple of years and the Great Western scheme limited for the moment to London/ Hayes (already done for Heathrow Express)/Reading and beyond only to Oxford and Newbury.Two important items,the HST replacements and whether/when to extend electrification of the Midland main line north of Bedford remain to be resolved and decisions on these are expected in January 2011. The truncated Great Western and the North Western electrification schemes are far more significant than they may at first look. The Great Western project takes the wires through Reading station which is about to undergo a major track and facilities rebuilding. It would have been a great waste of future time and money not to have done the wiring at the same time. The Oxford branch takes the main line wires west as far as Didcot,over 50 miles from London, from which further incremental expensions to Swindon, then Bath, Bristol and the Severn Tunnel all become within reach and much simpler to do. It also opens the way to further progress north into the Midlands and the long electrified West Coast mainline. Similarly the relatively short distances of the 4 components of the North Western scheme , each little more than 20 miles in length and about 40 years overdue, open up the opportunity for more much longer distance electric traction -eg Manchester and Liverpool- Scotland at a low cost. A trans Pennine link to Leeds could make Liverpool-Manchester-Leeds-York link into the electrified East Coast mainline. It's all rather like positioning the first lines in a game of boxes. A clever early strategy can make for big long term gains. Lord Adonis undoubtedly saw this and knew what he was doing although at first sight some of the components may have looked unsexy. It is fortunate that despite all the financial pressures and demands from all sides ,the new government has seen the array of economic and electoral bottletops Adonis' blueprint hits and have had the nerve to stick with it.
Transport and rail in particular is a difficult subject to get to grips with. Fortunately in the current circumstances it has short , medium and long term implications for social mobility (literally),employment,the cost of manufactured good, efficient distribution of goods and services,blurring north/south divides, living standards, quality of life particularly for commuters,as well as pollution levels ,and energy policy. In short it has many constituents all of whom need it to work well, efficiently, safely and as pleasantly as possible. It working- or more powerfully not working -can have a significant effect on ballot boxes all over the country.
The incoming Minister, Phil Hammond and his aide, Theresa Villiers, have wisely and successfully championed continuing as much of Adonis' rail plans as possible and almost the entire programme has survived, albeit with some timescales stretched by a couple of years and the Great Western scheme limited for the moment to London/ Hayes (already done for Heathrow Express)/Reading and beyond only to Oxford and Newbury.Two important items,the HST replacements and whether/when to extend electrification of the Midland main line north of Bedford remain to be resolved and decisions on these are expected in January 2011. The truncated Great Western and the North Western electrification schemes are far more significant than they may at first look. The Great Western project takes the wires through Reading station which is about to undergo a major track and facilities rebuilding. It would have been a great waste of future time and money not to have done the wiring at the same time. The Oxford branch takes the main line wires west as far as Didcot,over 50 miles from London, from which further incremental expensions to Swindon, then Bath, Bristol and the Severn Tunnel all become within reach and much simpler to do. It also opens the way to further progress north into the Midlands and the long electrified West Coast mainline. Similarly the relatively short distances of the 4 components of the North Western scheme , each little more than 20 miles in length and about 40 years overdue, open up the opportunity for more much longer distance electric traction -eg Manchester and Liverpool- Scotland at a low cost. A trans Pennine link to Leeds could make Liverpool-Manchester-Leeds-York link into the electrified East Coast mainline. It's all rather like positioning the first lines in a game of boxes. A clever early strategy can make for big long term gains. Lord Adonis undoubtedly saw this and knew what he was doing although at first sight some of the components may have looked unsexy. It is fortunate that despite all the financial pressures and demands from all sides ,the new government has seen the array of economic and electoral bottletops Adonis' blueprint hits and have had the nerve to stick with it.
Tuesday, 30 November 2010
BA/Iberia: The Galleon enters harbour.
As predicted, BA's Chairman Martin Broughton had no problems with reluctant or recalcitrant shareholders at yesterday's meetings to approve the company's move into oblivion as a standalone financial entity and into the hands of IAG,- International Airlines Group. Two hours to the south west and not on the direct onward path to anywhere other than South America, Iberia's shareholders were just as enthusiastic to get their hands on the new paper. At the three public meetings which took place, the lowest percentage in favour of the merger was 99.88%. The small number of individual investors (about 50 according to The Times)who turned up despite the bitter weather and the London tube strike need not have bothered. Thanks to the institutional investors it was all over before it started and their small percentage of shareholdings would make not a jot of difference.
By all accounts the Chairman was in a bullish and not too cuddly mood, confidently tossing aside questions he didn't like with something approaching apparent contempt.This was despite several questions from the floor being very valid and the concerns expressed reasonable and worthy of considered and considerate replies. This rumbustuous knockabout stuff is a worrying sign. Once Chairman and Board start treating what they see as the little people without genuine understanding and some degree of empathy it is a straight run to dealing with all who question or disagree the same way,-investors, customers and staff alike. Shareholders are also usually BA customers and they wil be concerned that the same "policy" driven high handedness, already a feature of some BA dealings with its customers, will become a dominant and dangerous culture. Never mind the icy patches outside yesterday. Even on a warm day there are enough bananaskins around for the Board to avoid throwing more in its own path.
In the words of the 1960's folk song: "If I had a hammer,I'd hammer out danger............"
Footnote: One of the advantages of registering IAG in Spain was said to be the tax breaks available there. Does this mean that UK Plc is about to see a large chunk of UK corporate tax move outside its grasp along with its erstwhile "national carrier".
By all accounts the Chairman was in a bullish and not too cuddly mood, confidently tossing aside questions he didn't like with something approaching apparent contempt.This was despite several questions from the floor being very valid and the concerns expressed reasonable and worthy of considered and considerate replies. This rumbustuous knockabout stuff is a worrying sign. Once Chairman and Board start treating what they see as the little people without genuine understanding and some degree of empathy it is a straight run to dealing with all who question or disagree the same way,-investors, customers and staff alike. Shareholders are also usually BA customers and they wil be concerned that the same "policy" driven high handedness, already a feature of some BA dealings with its customers, will become a dominant and dangerous culture. Never mind the icy patches outside yesterday. Even on a warm day there are enough bananaskins around for the Board to avoid throwing more in its own path.
In the words of the 1960's folk song: "If I had a hammer,I'd hammer out danger............"
Footnote: One of the advantages of registering IAG in Spain was said to be the tax breaks available there. Does this mean that UK Plc is about to see a large chunk of UK corporate tax move outside its grasp along with its erstwhile "national carrier".
Friday, 26 November 2010
BA/Iberia. The Galleon Sails On.
Next Monday,November 29th,BA's shareholders meet to vote their old company into oblivion as "a publicly quoted financial entity" and together with their Iberia equivalents sign up for compensatory shares in the new Spanish registered IAG,- International Airlines Group. BA's Chairman , writing in Overview, the magazine for shareholders,claims in an article headed "Still British to the core" that he "can reassure shareholders that British Airways will not have its strength drained by this merger". The front cover proclaims boldly "Everything you need to know about the merger". From this we can deduce that the Board thinks we need to know very little.Its 16 pages including covers are surprisingly unrevealing.It is a million airmiles from "Everything there is to know about the merger". There is absolutely nothing in it about the proposed organisational and financial structure for a start.
Mr Broughton says "Now British Airways will be more an airline brand". Nothing is said about its ongoing legal persona,if any. It is reasonable to assume therefore that it will indeed simply be a brand or division of IAG rather than a wholly owned subsidiary. He mentions airlines joining IAG "to retain their identity for the long term", but does not explain how this will be achieved or what guarantees there will be. If it is just a brand then BA will have lost control of the ultimate test of independence,- could it walk away from IAG if it found it didn't like the way things were turning out? It appears not. In that case BA and Iberia will be dead and gone for ever as separate businesses. All that will remain will be two facades, hollow shells,for the time being the frontage for IAG.
If this reasoning is correct and we haven't missed anything, there are a whole host of unstated facts and unasked questions behind the corporate smokescreen theme that this is an unmissable deal for BA's shareholders,customers and staff. What are the specific strategies and financial objectives of IAG? How do they differ from what the individual companies might reasonably have expected to achieve (bearing in mind that BA has been remarkably free of a global geographical strategy for the last 10 to 15 years)? Is the initial 55/45% split between the holdings of former BA and Iberia shareholders relevant for a second beyond the start of trading on the first day? How will the starting price of IAG shares be determined? If BA and Iberia have gone as separate entities ,who will mastermind staff issues, recruitment, career progresion etc? Will the two brands have any independence in strategy, route development and aircraft aquisition or will they have to bid against each other for turf and resources in an annual IAG budgeting process? If they do,as would be normal in a straight merger then surely the Group HQ will grow EU style and become another tier of management above the two brands. Decision making will be slower and complexity and costs higher?
Possibly the answers will be appear during Monday's meetings, but given the fact that the institutional investors, tired of years of few dividends and depressed share prices, have already indicated that they will vote "Yes" ,it looks all over bar any shouting from individual investors .Numerically they will be heavily outvoted anyway.
All that apart,recent events in Euroland and Ireland in particular should furrow the brows. Putting aside Greece, already in the sin bin,Spain is third after Ireland and Portugal in the list of Euro countries which could end up calling for the cash dispensing fire brigade. Unlike the other two it looks too big an economy to be rescued in the same way. That being the case,is this a good time for a UK company to be throwing in its lot with a Spanish one whose domestic market could end up with all sorts of problems were its homeland to get into serious difficulties? What if the needs of the Spanish side of the business drained cash from the needs of the UK operation? If you were piloting BA at this moment might you not be thinking of quickly hitting the "Go Round" button on the control panel?
Mr Broughton says "Now British Airways will be more an airline brand". Nothing is said about its ongoing legal persona,if any. It is reasonable to assume therefore that it will indeed simply be a brand or division of IAG rather than a wholly owned subsidiary. He mentions airlines joining IAG "to retain their identity for the long term", but does not explain how this will be achieved or what guarantees there will be. If it is just a brand then BA will have lost control of the ultimate test of independence,- could it walk away from IAG if it found it didn't like the way things were turning out? It appears not. In that case BA and Iberia will be dead and gone for ever as separate businesses. All that will remain will be two facades, hollow shells,for the time being the frontage for IAG.
If this reasoning is correct and we haven't missed anything, there are a whole host of unstated facts and unasked questions behind the corporate smokescreen theme that this is an unmissable deal for BA's shareholders,customers and staff. What are the specific strategies and financial objectives of IAG? How do they differ from what the individual companies might reasonably have expected to achieve (bearing in mind that BA has been remarkably free of a global geographical strategy for the last 10 to 15 years)? Is the initial 55/45% split between the holdings of former BA and Iberia shareholders relevant for a second beyond the start of trading on the first day? How will the starting price of IAG shares be determined? If BA and Iberia have gone as separate entities ,who will mastermind staff issues, recruitment, career progresion etc? Will the two brands have any independence in strategy, route development and aircraft aquisition or will they have to bid against each other for turf and resources in an annual IAG budgeting process? If they do,as would be normal in a straight merger then surely the Group HQ will grow EU style and become another tier of management above the two brands. Decision making will be slower and complexity and costs higher?
Possibly the answers will be appear during Monday's meetings, but given the fact that the institutional investors, tired of years of few dividends and depressed share prices, have already indicated that they will vote "Yes" ,it looks all over bar any shouting from individual investors .Numerically they will be heavily outvoted anyway.
All that apart,recent events in Euroland and Ireland in particular should furrow the brows. Putting aside Greece, already in the sin bin,Spain is third after Ireland and Portugal in the list of Euro countries which could end up calling for the cash dispensing fire brigade. Unlike the other two it looks too big an economy to be rescued in the same way. That being the case,is this a good time for a UK company to be throwing in its lot with a Spanish one whose domestic market could end up with all sorts of problems were its homeland to get into serious difficulties? What if the needs of the Spanish side of the business drained cash from the needs of the UK operation? If you were piloting BA at this moment might you not be thinking of quickly hitting the "Go Round" button on the control panel?
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