Few industries have faced the assaults that have battered the airlines over the last fifteen years or so. 9/11 delivered a the literal smash to the face sending the very heart of this industry into fibrillation’s. Following this, the erosive grind of intensifying customer demands for cheap services and relentless cost cutting has left established workforces reeling as companies struggle to satisfy both customer and shareholder alike.
Major carriers are finding themselves at a disadvantage going against the emergent nimble upstarts. Small airlines early in their life contract out maintenance and other capital and labour intensive functions writing employment contracts that the established giants can only crave. It isn’t that the new starts necessarily pay badly, it’s their relative youth that delivers benefit in that they don’t have the burden of experienced and established employees to carry with their accrued service benefits. Advantages originating from more genteel times during relatively placid market conditions. They are cheaper to run and difficult to compete with on cost. So what on earth can the ‘legacy’ carriers do?
Enter the phenomena of the ‘Parasitic Airline’. That delightfully named corporate gem that has crept onto the scene to change the landscape and enabled ‘old clothing’ to be shed and dumped. Old clothing in the form of employees with agreed terms and conditions of service that have been earned with loyalty and service. They have become ‘outdated and outpaced by the force of change’.
It started with American Airlines introducing American Eagle as a small turbo-prop subsidiary serving thin routes and feeding the mother company. Now it has jets, is the eighth largest carrier in the USA and it is eating its mother. Qantas rubbed its hands and fired up a new company called Jetstar and has not looked back – even for a minute. Jetstar has exploded across the Far East operating out of Qantas bases competing directly with its mother company.
Perhaps, (and I need to say perhaps because we don’t know) in an attempt to replicate the model, British Airways has started Open Skies, a new start airline.
Strangely, industry watchers just don’t seem to understand what this new venture is about as it appears to be poorly positioned and ill equipped to make a significant impact. In one recent podcast analysts being interviewed by Addison Schonland of IAG ran over the factors and were unable to make any sense of the strategy and concluded that BA had made an error in a half hearted attempt to respond to competition. I believe they missed the point, at least they almost did. In the closing moments of the podcast, Tim the final speaker may have hit the nail on the head when he decided that there was a deeper agenda in the formation of Open Skies; he just couldn’t identify it. Supposition of course, we don’t know yet, do we?
British Airways pilots look as though they may well clash horns with their Leadership Team over the issue of crewing the new carrier. BA insists that ‘OS’ is a different company and wants autonomy for the managers and the pilots in the ‘new start’ airline. BALPA, the pilots association, insists that the airline is wholly owned, funded, maintained and will be managed by the parent company and as such IS BA.
A common seniority list is being insisted upon by the pilots as they say to do any less would allow ‘parasitic action’ (as witnessed elsewhere) to drive down terms and condition of service within the parent company. At least that is the concern, there has been nothing of any substance produced by British Airways managers to allay that fear beyond vague assurances. This is not seen as boding well by a savvy and astute BALPA.
BA pilots have some sympathy with the thrust to lower costs, we have been living and working with it for decades as the government owned leviathan has been trimmed down to form the relatively lean profit maker the new BA is now. Pilot productivity has risen to the point where it has no peer within Europe and probably the US as well. The drives in this direction have taken our rolling flying hours toward the 900 per annum mark with some pilots requiring compulsory roster breaks to return to legal limits. We love hard work, enjoy the flying and work hard collectively towards making the airline safe and a great success.
Willie Walsh has a considerable job on his hands, he has kept a back seat for now but will undoubtedly come to the fore later. I can tell you that he retains the respect and admiration of his workforce at the moment, I hope that it will survive the coming months. We all hope ardently that common sense will prevail and that an agreement that will allay fears and safeguard pilots interests will be reached. In the end, the negotiating table is where the future lies, not the mortuary slab. A point, that without doubt is not lost on all parties.
These will necessarily be my last words on the subject. I love my job and want to keep it.