Ayling lost controls on course to globalisation

Outgoing BA chief Bob Ayling set a new precedent in global brand identification with ethnic tail-fins, but failed to build a truly global airline, says George Pitcher

I know it’s easy enough to say now, but Bob Ayling was always going to be the fall guy at British Airways once the share price started its emergency descent. For all the protestations of support from BA chairman Lord Marshall for his chief executive, Ayling was not going to survive unless he pulled BA’s market valuation out of its dive and gained some height.

There have been moments when he might have done so. An Internet strategy usually does the trick these days, but even that didn’t re-fire BA’s engines last month. It will now be up to his successor – perhaps US Airways chairman Stephen Wolf, though an approach has been denied by BA – to provide the thrust for a climb.

It’s hardly an original observation that the City is an unforgiving place. I suspect it was institutional shareholders that finally forced Marshall’s hand. The brutal truth is that, some three years ago, BA’s shares flew at an all-time high of 760p. They hit an all-time low last week of 258p, costing shareholders collectively some &£4bn.

But, at the risk of sounding like someone telling City institutions that money isn’t everything, Ayling had his moments. He launched Go, the no-frills flights service which competed with its own parent on price. This was a pragmatic decision driven by the logic that bargain airlines, such as EasyJet, would erode BA’s market share, so it might as well have some of the action itself.

It should also be said that he took on some of the toughest and most intransigent trade unions since Rupert Murdoch fought the printers. Not being afraid of being disliked is probably a euphemism for being arrogant and high-handed, but the way he faced up to the unions, from which BA will undoubtedly benefit in due course, showed that he was a manager of conviction rather than of fad.

Consequently, he was prepared to cut capacity, which isn’t a cool thing to do in the airline industry. But, again, it will fuel BA’s recovery as and when it comes.

On the debit side of the Ayling balance sheet, apart from the unforgivable share price, was the failure to secure BA’s proposed merger with American Airlines. But that must have been as much a factor of regulatory and political pressures as it was of Ayling not being taken for a ride on landing slots and financials. Either way, Ayling demonstrated that he was no sap.

The other alleged great failure laid at Ayling’s door was the &£60m corporate identity project, which most visibly involved painting the fleet’s tail-fins with abstract art from around the globe. Ayling may have suffered in his career from not understanding that the media can decide whether a great project is a success or failure, simply on the basis of whether a principally bourgeois media like it or not.

Take the Millennium Dome, of which Ayling was chairman (though, oddly enough, a rather low-profile chairman of late). Visitors tend to like it and it is now meeting its more realistically revised capacity targets. The media tend to hate it – including me, which probably tells you all you need to know about bourgeois attitudes. The Dome is consequently declared publicly to be a failure.

Similarly, BA’s brightly coloured tail-fins were an easy media target for art snobs and Little Englanders.

I want to dwell on the tail-fins for a moment, because this element of Ayling’s CV is illustrative of a broader point.

I must declare that I liked the tail-fins. That makes me a pariah in even faintly sophisticated circles, but let me explain that I don’t mean that I liked all the paintings. Some were great, some okay and some were foul. But I liked the principle of BA setting out bravely to create a new genre in global brand identification, away from silly flag-waving exercises in corporate identity.

It seems to me that truly global companies have to get away from the notion that nationality – or, more accurately, nationhood – is a brand value. “Made in Britain” is not a brand strength – and not just because of our relative decline in the world. The same applies to the US or Germany. McDonald’s is no longer a US burger seller and a BMW is no longer a German car. They may still have national resonances, but they are global brands.

BA had the opportunity to stress its internationality and develop as a truly global airline. And it should have told the rich old codgers at the front of the plane that there is a new generation in the back of the plane, who aren’t wearing ties and will soon be flying Business and First Class. But, as the man was saying in the ads until recently, that wouldn’t be very British, would it?

There is an irony that the multinationals are the hardest hit by globalisation and the rise of a supposed new economy. Proctor & Gamble’s shares fell more than 30 per cent last week and are down 50 per cent over two months in New York. Unilever, Coca-Cola and Disney have similarly suffered from the Internet bubble and doubts over the global momentum of traditional brands.

BA is today far from being a global airline. Among Ayling’s regrets must be that he tried to make it start behaving like one.

George Pitcher is a partner at issue management consultancy Luther Pendragon

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