British Airways: Aviation Industry in the UK

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Table of Contents

Introduction
Union power within the U.K. aviation industry
Reasons behind the history of industrial unrest at British Airways
Culture in the aviation industry
Lessons that British Airways can learn from other airlines
Conclusion
References

Introduction

The British Airways has experienced several challenges over the past. After incurring significant losses, it had ruined its reputation and it was considered not reliable (Campbell-Smith, 1986). In an attempt to salvage the organization, the management adopted a survival plan that was supposed to enable cost cutting.

However, it failed to use collective bargaining. Several issues have also been highlighted in its management procedures. The use of threats by the management in order to forcefully cut down the employees’ salaries led to strikes since the employees were not motivated. The dismissal of a significant number of employees also played a role in reducing job security and tainting its reputation.

This paper will evaluate the British Airways as an airline in the U.K. aviation industry and propose certain aspects that could be emulated by the company based on the success of other airlines. The paper will also address the importance of culture for the success of an airline.

Union power within the U.K. aviation industry

The trade union movements in the U.K. were developed to fight for the socio-economical well being of the employees. However, the Margaret Thatcher’s government turned the tables around and made the lives of the employees miserable. It weakened the powers of the unions and made strikes illegal (Webb, 1920).

This also had an effect on the union power of the aviation industry. With such limitations on the powers of the union, the employees did not have much say on the decision of the company. In case they felt that some of their needs were not being met, they had trouble airing them. When they attempted to air their views, they were either threatened or sacked.

This had adverse effects on the success of the airlines since the employee/s were not motivated to work effectively. Consequently, this means that the employees would not deliver the services to the expectations of the customers and this has negative effects on the success of the company since it does not have the ability to sustain its customers. One of the airlines that suffered a lot from this is the British Airways (Campbell-Smith, 1986).

Reasons behind the history of industrial unrest at British Airways

British Airways had incurred great losses earlier and this had cost its reputation. This was in the early 1980s. Its reputation for reliability became poor and it could not be trusted to deliver as it did before. In addition, its costs were much more when compared to the other airlines. Privatisation became the option for the organization and in order to prepare for this, they decided to recruit new managers. The Thatcher government had believed that this would help bring back the company to its feet.

The British Airways then decided to focus its efforts on adding value as its business strategy. This was to be in terms of putting customer service as a priority. This was greatly to depend on the development of the activities of its human resource management (Boyd, 2001).

This also meant that the company embraced the policy of working in teams and it adopted a pay scheme that was related to profits. The organization became renowned for this. Another strategy adopted by the British Airways was what was referred to as the ‘survival plan’. This was to involve the significant cutting down of its costs.

The company had attempted to embark on a useful venture, which was to improve the relations with the trade unions, but it failed on one area. This was when they failed to use collective bargain as a tool for change. They had thought that the use of open and regular communication alone would be enough but they were wrong.

At around 1985, there were some improvements that had been experienced in the company. Its financial position improved and was consistent with the current market. The company had become almost monopolistic in regards to the domestic flights. It also took a duopoly position when it came to the flights abroad.

There was also a significant improvement in the employment during that period. An addition 15000 employees were recruited. However, this nice picture portrayed a wrong picture about the British Airways. This is because the company still struggled with industrial disputes. Industrial action still characterised the industrial relations of the company. It had been determined that there was at least one industrial dispute yearly.

The fall of the company started to show in the early 1990s. This was when the company’s environment changed drastically. Firstly, deregulation initiated a competitive atmosphere with other airlines within the European nations. Additionally, there was the effect of the Gulf war and the recession.

Both of these phenomenons had a negative effect on the general market. The company decided to cut its costs even more. This was because getting subsidies from the government was not an option any more. This was when the equilibrium between adding value, providing high quality service and cost cutting was lost (Campbell-Smith, 1986).

In order for the company to continue to perform well in such conditions, it had to do away with some of its ethical considerations. This was in the form of franchising some of its activities.

This was in opposition to its business operations since it believed in consultation and negotiation. Within the next three years, its effect on employment had been felt. About 5400 employees lost their jobs. There was a significant decrease in the employee morale because they were not motivated. This also led to disputes in the bargaining groups.

With a new chief executive in 1996, the company resorted to cutting down its costs in order to realize more profits. This had been determined to be a good strategy basing on its success that year when the company announced a record pre-tax profit. The new strategy adopted to cut costs even further was referred to as the Business Efficiency Programme.

However, some of its strategies were not in favour of the employees. For example, the company attempted to restructure the pay scales and the allowances for the staff. This was particularly on the cabin crew. This was not taken positively as it led to a strike in 1997.

In order to stop the employees from striking, the company threatened to sack the workers or sue them for breach of contract. This was an act of bullying by the company and this had a negative effect on employee morale. Another big problem that the company faced was the alliance with American Airlines. This did not go well due to regulatory difficulties and it led to huge losses.

Culture in the aviation industry

Every airline required to recognize the importance of organizational culture. Culture is basically the way the company goes about its activities. It is how things are done there. It may either be weak or strong. A strong one is usually accepted by employees. This is because it has several benefits that favour them and the organization as a whole.

Some of the benefits in the aviation industry include improved financial performance and increased safety. Some of the key features of any culture are the presence of symbols, values, rituals and heroes. A weak culture, on the other hand, is not strongly embraced by the workers. Such cultures do not have significant impacts on the company’s success.

Culture, in the aviation industry, is vital in order to govern collective behaviour. This is because it governs the way employees perceive things. It also governs the way they feel and think. This means that it would affect the way they interact with each other, with their clients and with other stakeholders. This means that organizational cultures are important in ensuring good customer service.

The goal of every organization, including the aviation industry, is to provide proper services to its customers. This will help attract them and ensure that they maintain them. This is necessary in order to maintain the sales and ensure profitability and sustainability of the business.

Employees are required to understand the needs of their customers. This will put them in a position to match the products of the company with their needs. When the needs of the customers are met, they get satisfied (customer satisfaction) and this is what keeps them coming back for more. Therefore, customer service is important for the success of every business.

Providing customer service is quite a simple task, however, providing efficient customer service is another story all together. This requires proper skills. Organizations can ensure that its employees are well equipped with these skills through providing them with proper training. This may be in the provision of courses that would impart these skills and knowledge to them. This can only be achieved if the company has a strong culture. This way, the organization will be able to maintain its customers and keep its airplanes in the air.

Lessons that British Airways can learn from other airlines

Southwest Airlines and Singapore Airlines are some of the most successful airlines and the British Airways can learn some vital lessons that could help it to realize success. Among the strengths of Southwest Airlines is its unique culture. This has helped it propel and become one of the leading airlines in the United States. The culture of the airline is characterised by several dimensions that show it success as a strong culture.

One of the dimensions of the Southwest Airlines organizational culture as per the Organizational Culture Profile is the people-oriented culture (Pfeffer and Veiga, 1999). This culture cultivates the value of fairness and encourages the support and respect for the individual’s rights.

In Southwest Airlines, the main emphasis is on training the people with dignity and respect. Certain studies have shown that generally, organizations that embrace people-oriented cultures enjoy low turnover rates. The employees have been determined to stay for more than a year longer than in those organizations that do not have such cultures in their organizational cultures. The British Airways needs to embrace this kind of culture in order to motivate its employees and make them feel appreciated.

Kelleher and his management team were responsible for creating the organizational culture. It was created in 1971. However, all the individuals are expected to embrace it and bring it to life. This is because they are one big family that has one goal in mind and this is to make the organization an organization that is dedicated to the highest quality of customer service (Milliman et al., 1999).

It endeavours to deliver these services with a sense of friendliness. This shows that the managers play a key role in the success of the organization through the adoption a strong organizational culture. One of the barriers of the British Airways achieving this is the lack of good managers.

Another dimension is the team-oriented culture. The Southwest Airlines emphasize on the use of collaborative efforts in organizational goals (Morrison, 2001). It emphasizes on team spirit in the performance of its activities. It achieves this through cross training the workers in order for them to be able to assist one another when need arises.

In order to be sure that all its employees are team players, the human resource at the Southwest Airlines ensures that the recruitment process ensures this is covered. If the candidate is believed not to be a team player, the position is not available to him or her (Bunz and Maes, 1998). As for the British Airways, teamwork was mainly seen during the strikes.

This was because the conditions in the company did not provide a conducive environment for working. British Airways could adopt this kind of culture and focus the team efforts of the employees on the enrichment of the company.

One of the founders of the airline, Herb Kelleher, has maintained this culture and this explains why the airline has been a success. He and his employees have adopted a successful philosophy that has ensured the nurturing of teamwork as a culture. This is the philosophy of making the organization a family.

Together, they have made the Southwest Airlines one of the lowest cost carriers. The British Airways has experienced bad leadership in the past since one of its chief executives acted as a dictator rather than a partner. This was one of the reasons that the British Airways was on the downfall.

In order to maintain and foster the culture at Southwest Airlines, the organization has ensured that it is engraved in the organization’s mission statement. The organization also considers their employees as a great resource since they are part of the greatest assets.

Therefore, it endeavours to provide them with a stable work environment that will ensure that the workers will be able to produce their best. The organization has also ensured that every individual treated equally and provided equal opportunities. These are especially when it comes to personal growth and learning.

I strongly believe that there is a strong relationship between Southwest Airlines success and its culture. Firstly, its team-oriented culture ensures that only the team workers are recruited.

This means that all individuals who are employed in the organization work together towards one goal. This combined effort helps the organization achieve its goals. These include being a high quality but low cost provider (Morrison, 2001).

The people-oriented cultures also favour its employees a lot. It ensures employee satisfaction and that they have high morale. This enables them to work even more effectively.

The organization also values its customers. Therefore, they always provide high quality service that is affordable to them. All these things have contributed to the success of the Southwest Airlines and if the British Airways adopts them, it could be on the same route towards success.

Another air carrier that needs to be emulated by British Airways is Singapore International Airline. It is ranked top ten worldwide. One of the reasons why this airline has been able to remain successful for several decades is due to its appreciation of employee training and human resource development (Wirtz and Johnston, 2001).

The organization believes in investing in the training and developing of its staff. It has maintained this view and currently, the organization remains committed to its staff and continuously invests in their training (Chan, 2000). British Airways required adopting this mentality of valuing its employees and empowering them through training and development (Holtbrugge, 2004).

There are several aspects that ensure the effective human resource management strategy at the company. These aspects together with the proper management skills of top management have contributed greatly in the company’s ability to achieve cost-effective service excellence.

One of the elements is the stringent selection and recruitment process adopted by the human resource management. Another strategy that has continuously led to the success of the company is the fact that it has formed successful service delivery teams that have ensured that only quality service is delivered constantly. Another important aspect of the company’s strategy is the empowerment of the front-line staff.

Lastly, the organization specialized in the motivation of its employees. These are some of the things that British Airways can learn from in order to be as successful.

One of the most important aspects of Singapore International Airline is crew resource management (Flin, 2002). This is because this delivers improved service excellence. It also ensures that the customer’s expectations are met. Through this, the company is able to adapt to the ever-changing market and the company will be cost conscious. In order to achieve this, the company has focused on particular aspects to do with the selection and training of staff (Wirtz and Johnston, 2001).

The Singapore International Airline is also successful because it values and supports the contributions made by each staff (Heracleous and Wirtz, 2008). Similar to Southwest airlines, the company has been able to bond everyone and has invested in developing mutual relationships between the top management and the subordinates. This is important in ensuring that fast decisions are made and that deadlines are met in a timely manner. The organization is also people oriented since it values its employees.

The stringent selection process has led to the recruiting of competent employees in to the organization. This involves the use of a highly accurate and stringent selection procedure. This ensures that the individuals selected meet the preferred characteristics of the company. After the recruitment process, the selected employees go for an on-the-job training. This ensures that the new employees understand the corporate values of the organization and being accustomed to the corporate culture.

Conclusion

The union power in U.K. aviation industry has faced several challenges. British Airways is one of the airlines that faced such challenges and tried to improve the relations with the trade unions. However, it failed to use collective bargain as a tool for change. They had thought that the use of open and regular communication was sufficient.

British Airways also had a weak corporate culture that led to its inability to satisfy its employees and eventually acted as an impediment. However, British Airways can learn from the Southwest and Singapore Airlines since these two airlines have been successful for several years owing to their proper management skills.

References

Boyd, C 2001, ‘HRM in the airline industry: Strategies and outcomes,’ Personnel Review, vol. 30, no. 4, pp. 438-453.

Bunz, U & Maes, J 1998, ‘Learning excellence: Southwest Airlines approach’, Managing Service Quality, vol. 8, no. 3, pp. 163-169.

Campbell-Smith, D 1986, The British Airways Story: Struggle for take-off, Hodder and Stoughton, New York.

Chan, D 2000, Air wars in Asia: Competitive and collaborative strategies, Republic of Singapore Air Force, Singapore.

Flin, R 2002, ‘Crew resource management: Improving teamwork in high reliability industries’, Team Performance Management, vol. 8, no, ¾, pp. 68-78.

Heracleous, L & Wirtz, J 2008, Strategy and organization at Singapore Airlines: Achieving sustainable advantage through dual strategy, Elsevier Ltd, New York.

Holtbrugge, D 2004, Management of international strategic business corporation: Situational conditions, performance criteria and success factors, Wiley Periodicals Inc., Singapore.

Milliman, J., Ferguson, J., Trickett, D & Condemi, B 1999, ‘Spirit and community at Southwest Airlines: An investigation of a spiritual values-based model’, Journal of Organizational Change Management, vol. 12, no. 3, pp. 221-233.

Morrison, S 2001, ‘Actual, adjacent and potential competition estimating the full effect of Southwest Airlines’, Journal of Transport Economics and policy, vol. 35, no. 2, pp. 239-256.

Pfeffer, J & Veiga, J 1999, ‘Putting people first for organizational success’, The Academy of Management Executive, vol. 13, no. 2, pp. 37-48.

Webb, S 1920, A history of Trade unionism, Longmans & Green, London.

Wirtz, J & Johnston, R 2001, Singapore airlines: What it takes to sustain service excellence – A senior management perspective, NUS Business School, Singapore.

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