Yesterday (Sunday 20 June) The Sunday Times published (Magazine page 32) the most comprehensive interview of BA boss Sean Doyle since his appointment in October 2020. John Arlidge met him at T5.
The whole interview is 2,500 words and is easily summarised by Doyle early on “It’s been worse than 9/11, Sars and the global financial crisis combined.”
Arlidge’s last line says it all: “There will be only one thing on Doyle’s mind: how to get BA “back big and beautiful again”. He promises: “Today’s the start.”
Also see BTN 19 October 2020 Sean Doyle is the new BA CEO.
The article is set out below and is also available free of charge on the website of the The Sunday Times for whom we thank.
www.thetimes.co.uk/article/british-airways-is-in-crisis-can-new-boss-sean-doyle-save-it-hdhmmw9vl
Like most of us, Sean Doyle is itching to hear the engines rev on an aeroplane as it tears down the runway to go somewhere, anywhere — starting, in his case, with home. “I’ve not been back to see my mum and my sisters in Cork since October,” he says. After that, he’s looking forward to bumping up through the clouds on his way to New York. “I want to meet our teams in America.” Doyle, who was appointed British Airways’ boss last October, wants to use his first flights since travel restrictions eased to signal not just that the flag carrier is back at 39,000ft but also that it’s on a glide path that will once again make it Europe’s, if not the world’s, favourite airline. “That’s the goal. Yes — we’re ambitious,” he says.
Doyle, 50, has to chart a new course for one of Britain’s corporate icons because it has nosedived. BA was losing £20 million a day during lockdown. To stave off bankruptcy it shed 10,000 pilots, cabin crew and ground staff, while its parent company, International Airlines Group (IAG), took on £10 billion of debt. “It’s been worse than 9/11, Sars and the global financial crisis combined,” he says when we meet at BA’s hub, Heathrow Terminal 5. Getting back into the air to the US, BA’s biggest and most profitable market, is the first step to repairing the battered balance sheet.
But Doyle has to do something even harder: win back the loyalty of millions of passengers who now fly “Abba” — Anyone but British Airways — because, they say, years of cost-cutting under Doyle’s predecessor, Alex Cruz, left BA little more than a budget carrier. People like 62-year-old Julie Willson, from Guildford in Surrey.
She grew up looking forward to flying off on holiday with BA but now goes easyJet. She began avoiding BA after a series of catastrophic IT failures starting in 2017 grounded flights and Cruz removed the little extras she thought made the airline a cut above its rivals — especially a free G&T. “The whole thing went downhill fast,” Willson says.
The final straw came when BA made it next to impossible for her to get a cash refund for flights she had booked from Heathrow to Cyprus but were cancelled after lockdown. The airline did not put a refund button on its app or a web link and, instead, forced her to phone its call centre — which could not cope with the volume of requests.
Doyle is under no illusion how many passengers like Willson are out there. “We need to be honest as to whether we got the experience right,” he admits. “We need to be clear what our customers’ expectations are and that may require shifts in direction.” What shifts? “From booking until landing, BA needs to feel like a premium experience. We stand for excellence. We’ll drive that through the airline.”
Those words are as complete a corporate U-turn as Coca-Cola admitting it botched the launch of New Coke. Though Cruz adopted a premium strategy, he combined it with cost-cutting. To attract high-spending passengers, he continued to offer posh nosh and fizz in the pointy end of his jets and ensured speedy customer service by using call centres reserved for high-status travellers. At the same time, he wanted to reduce costs to tempt a generation brought up on low fares offered by the budget carriers. He copied their business model at the back of the plane: offering low headline fares but charging for food, choosing a seat and, sometimes, checking in a bag.
The strategy boosted profits and returns to shareholders — IAG’s share price soared to a record £5 before the pandemic; but it also confused customers and damaged the brand, critics said. “You can’t be McDonald’s and a Michelin-star restaurant,” one complained. Cruz’s cost-cutting zeal plunged BA into crisis last year when he threatened to fire staff and then rehire them on worse terms after lockdown. The move prompted Huw Merriman, Conservative chairman of the House of Commons transport select committee, to condemn the carrier as a “national disgrace”. Small wonder one of the first things that the new boss of IAG, Luis Gallego, did when he arrived last year was to press the ejector button on “Mr Cruz Control”. After so many false dawns over recent years, can BA’s third CEO in less than a decade really fix the mess?
Doyle, who worked at BA for 22 years, joined its sister airline Aer Lingus as CEO in 2019 before returning to BA as boss. He has already made a strong start by reversing Cruz’s most unpopular move and reinstating free water and a snack in short-haul economy. A free cuppa may follow, but booze probably won’t. What other mistakes will Doyle correct? Hire more staff to answer the phone when things go wrong? Scrap occasional fees to check in luggage? Put back the second lavatory in short-haul economy that was taken out to squash in more seats, so we no longer have to go before we go? He acknowledges BA needs to do more to keep in touch with passengers. “First-contact resolution is something we’re committed to,” he says, using the corporate jargon for helping customers quickly. “We’re investing in how people can contact us.” As for baggage fees and a new loo, “I’ll take that feedback on board,” he says with a laugh.
Doyle and I are chatting over breakfast at T5. His soft Irish lilt and relaxed “ask me anything” style could not make him more different from Cruz, who often preferred to release pre-recorded statements to journalists on Twitter and Facebook. Doyle is more of a natural showman, too — an important quality for an airline boss, as Richard Branson has proved at Virgin Atlantic. On a terrace behind him sits the 13ft nose cone of one of BA’s Concorde jets, which he has had moved over from BA’s corporate HQ. Is the supersonic sculpture a signal that the era of relentless cost-cutting is over and high-flying days are back? “This business is competitive and value for money is very important, but at the same time we know investment is important,” he says. “I don’t hide from the fact that we’re a very, very strong brand. The bar is set high for British Airways and we have to meet that.”
Doyle’s early moves have the support of the man who is BA’s biggest partner, John Holland-Kaye, boss of Heathrow airport, where BA has more than half of the coveted take-off and landing slots. “Sean has brought a big cultural change,” Holland-Kaye says.
A key part of that change is reconnecting with ordinary passengers like Willson and boosting staff morale, which hit rock bottom under Cruz. That’s why the airline’s first television advertisement on Doyle’s watch dispenses with the usual celebrities, flutes of champagne and smoked salmon in the posh cabins. In their place are holidaymakers waking up at 6am and flying off in economy class with free food and drink, supported by pilots, cabin staff and ground crew.
Doyle is also rediscovering generosity, a quality all too rare in BA over the past few years. He has extended the status of frequent flyers who were about to lose their cherished Gold and Silver cards because lockdown meant they could not fly and earn loyalty points. He has also increased the number of Avios (air miles) reward seats.
Larger TV screens and more choice of entertainment on long-haul flights
Premium economy — the cabin between economy and business class — will expand and improve
Business class has been revamped with a bigger and more private Club Suite
Heathrow passengers will be served food prepared by BA’s caterer Do & Co in a new multimillion-pound kitchen near the airport
Cabin crew will sport uniforms designed by the Savile Row tailor Ozwald Boateng Technology refined during lockdown to minimise contact between passengers and staff is being used to launch a pre-order service in short-haul economy for those who want a full meal, not just a snack, from a new menu created by Tom Kerridge
As part of a £6.5 billion investment programme, there’s wi-fi on all new jets and a snazzy new Club Suite in long-haul business class. Bill Gates, the Microsoft co-founder, argues that business travel will recover only to half 2019 levels, but Doyle insists “people do business with people, not organisations” and predicts demand will get back to 2019 numbers by 2023-24. He’d better be right. Although travellers in BA’s business and first class cabins account for only one in ten of tickets sold, they generate more than half the airline’s revenues and 75 per cent of profits, analysts say.
Early after the first lockdown, Virgin Atlantic pulled out of Gatwick and BA transferred most short-haul flights from the West Sussex airport to Heathrow. Will Doyle return to a full service at Gatwick? “We’re still evaluating what we’ll do.”
In some ways, the pandemic might help Doyle. BA’s big European rivals, Air France-KLM and Lufthansa, were partially or wholly nationalised last year when governments took equity stakes to ensure their survival. Boris Johnson refused to do the same for UK airlines — and that might now give them a competitive edge. “Airlines are better when they’re run as businesses, not state carriers. They’re more customer focused,” Doyle says. “That discipline is something that will be an advantage as we come out of the pandemic.”
Doyle’s reforms will be a breath of fresh air to many passengers who thought BA had come to regard them merely as self-loading freight, but the scale of his task remains daunting. The cutbacks meant that BA slumped to 40th place in the 2017 Skytrax World Airline Awards, ten slots below the Russian carrier Aeroflot. And it wasn’t just passengers who were giving the red, white and blue tail fin the thumbs down. In an interview with this newspaper in April, Akbar al Baker, the chief executive of Qatar Airways, which holds a 25 per cent stake in IAG, rated BA “two out of ten”.
BA has had to cut so deep to survive the pandemic it is restarting flights as a far smaller airline. If you want to fly from Britain direct to Seoul, Kuala Lumpur, Abu Dhabi, Osaka, St Petersburg, Beirut, Muscat, Calgary, Pittsburgh, Charleston or the Seychelles, you’ll have to find another carrier. Some of the perks that help to lure high-spending passengers have gone: BA001, the all-business-class service from London City airport to New York nicknamed “the banker express”, has been axed, as have all the Elemis spas at BA’s lounges in London and New York.
Lockdown has slowed the delivery of new jets and the refurbishment of old ones. Only eight new Airbus A350s and two Boeing 787-10 Dreamliners — BA’s flagships now that it has axed its ageing, gas-guzzling Boeing 747 jumbos — have joined the fleet. Overall, only 28 of BA’s 111 long-haul jets have the Club Suite.
The new man in the cockpit also faces market headwinds. The pandemic remains unpredictable. Portugal’s change in travel status from green to amber has cost BA millions of pounds in cancellations. Flights to India are unlikely to return any time soon. Dubai, another key market, is scratchy. BA last week put thousands of staff back on furlough. And there are worries about hellish — and risky — airport immigration queues.
At Heathrow, Holland-Kaye may have warm words for Doyle but he is also anxious to increase fees for airlines to make up for the £2.6 billion in revenue the airport has lost during lockdown.
There are even bigger challenges on the horizon. Doyle faces fresh competition — and not just from Virgin Atlantic, which has weathered lockdown in better shape than many anticipated. The US budget carrier JetBlue will begin cut-price transatlantic flights in August with a service that it promises will feel anything but budget.
It is not clear that BA passengers will want to fly in the dozens of Boeing 737 Max 8 short-haul jets that IAG has signalled it will order. The jet was grounded in 2019 after two crashes that killed 346 people and was only recertified as safe to fly in December after improvements to its complex flight software systems and pilot training. “That’s a question for IAG,” Doyle says, swerving the issue.
As he tries to fly higher, Doyle, who lives with his wife, Sophie, and their son in west London, will also face growing pressure to “green” his business to help tackle climate change. BA emitted 18.8 million tonnes of carbon dioxide in 2019. To put that figure into perspective, the House of Commons climate change committee recommends a reduction of total UK aviation emissions from all UK airlines to about 23 million tonnes by 2050.
Doyle points out that BA’s new Airbus A350 and Boeing 787 jets “are up to 40 per cent more fuel efficient” than its outgoing planes. BA is also developing sustainable aviation fuels, investing in hydrogen-electric-powered aircraft and exploring carbon capture, which should help “to get to a net zero-carbon position by 2050. I’m putting sustainability at the heart of our business model.” Environmentalists remain deeply sceptical of his and other airline chiefs’ efforts, pointing out that they rely on carbon-offsetting schemes that critics dismiss as “greenwashing”.
In spite of all the challenges, some who have been highly critical of BA in the past are daring to hope Doyle can fly back to the future. “There’s still enough goodwill and equity in the BA brand to reclaim the high ground,” says Rita Clifton, former director of strategy at Saatchi & Saatchi, who helped to create BA’s iconic “world’s favourite airline” advertising campaign.
City analysts are also encouraged. Andrew Lobbenberg at HSBC argues: “The repositioning of the business is sensible. It was run too aggressively for short-term profit.” But he raises one ticklish problem. “BA can be premium and profitable at Heathrow but it’s not obvious that will work for Gatwick, which is largely a short-haul leisure hub where BA competes with easyJet.” One solution might be to use one of the budget carriers in IAG’s stable, perhaps Spain-based Vueling, for short-haul services, but retain BA on Caribbean routes.
That and many other tough decisions lie ahead. But for now, as his jets to Cork and New York rev for take-off, there will be only one thing on Doyle’s mind: how to get BA “back big and beautiful again”. He promises: “Today’s the start.”