How damaged is the British Airways brand?

British Airways is one of the world’s most iconic airline brands, but a decade of economic turbulence and a rapidly deregulating air travel market have chipped away at its leading position.

The airline’s reputation for high-class customer service has been dented by a poor record on losing passengers’ baggage and repeated problems at its Heathrow and Gatwick hubs, from where it serves some 150 destinations in 75 countries.

It has suffered from the rise of budget short-haul airlines and transatlantic business rivals such as Eos, Silverjet and Maxjet. The effects of terrorism, increased fuel prices and the fluctuating fortunes of its key business customers have also hit the business. But some of its most embarrassing moments have been self-inflicted. There was the price-fixing scandal on fuel surcharges that emerged in 2006. Then came last week’s meltdown at the opening of BA’s new £4.3bn Terminal 5 at Heathrow.

When it was privatised in 1987, BA was gifted advantages that other airlines could only dream of, including monopolies on key routes and 43% of the valuable take-off and landing slots at Heathrow Airport.

This has given the airline a stranglehold on some highly profitable business and first-class routes, including London to New York, which provide nearly two thirds of its profits. However, its massive presence at Heathrow means it has suffered more than most from the failings of the airport’s operator BAA.

Heathrow runs at nearly full capacity which means the slightest glitch, computer crash or haze of fog plunges BA’s operations into chaos. It has the second worst reputation in Europe for lost baggage after TAP Air Portugal.
The opening of the state-of-the-art Terminal 5 at Heathrow, exclusively for BA’s use, was intended to put an end to the problems and herald a new era of customer service. But the botched launch – and suspension of the supporting ad campaign – on March 27 appears only to have worsened BA’s image.

Meanwhile, the biggest cloud on the horizon for BA is the Open Skies agreement, which deregulates routes between the US and European destinations, exposing the airline to unaccustomed competition. There will be rivalry for the Heathrow take-off and landing slots.

Tim Jeans, managing director of Monarch Airlines, says Open Skies will strip away BA’s historic advantages and it will be forced to compete on brand terms. “Where they have been afforded protection in the past, they will really have to step up to the plate on customer service in the deregulated future,” he says.

A wrench to marketing the BA brand came with the appointment of Bartle Bogle Hegarty to handle its advertising in 2005 after the airline parted company with the Saatchi brothers, who had run the advertising for 24 years, first at Saatchi & Saatchi and then M&C Saatchi. Confidence in BA suffered after it was forced to drop the “World’s favourite airline” slogan when it was overtaken by Lufthansa on international passenger numbers in 2002. BA is now the number three global airline after Lufthansa and Air France/KLM.

Some question whether the replacement slogan dreamed up by BBH, “Upgrade to BA”, is a credible claim. Allan Fraser-Rush, planning director at Tequila London who works on the Singapore Airlines account, says it works well in the US where rivals such as American Airlines, United and South West are way behind it in terms of customer service and the quality of its fleet. But he says BA’s 240 strong fleet is relatively aged – its jumbos are on average 12 years old – and rivals from the Far and Middle East boast more modern planes.

Meanwhile, customer service surveys put BA among the second rank of airlines. For instance, the Skytrax index gives BA four stars, along with Virgin Atlantic, Silverjet, Air France and Lufthansa. Five star airlines include Asiana, Malaysia and Singapore Airlines and Cathay Pacific Airways.

A BA spokeswoman says there is justification for the ad slogan and adds: “We are investing in our fleet and replacing older aircraft. Our cabins were recently refurbished and we did Club World last year.”
On the plus side, the business class Club World service is highly rated by executive travellers, and its offer of flat beds is popular. It also offers top-class airport facilities.

“There is a lot in the BA brand to suggest they can live up to the Upgrade claim,” says Rita Clifton, chairman of brand consultancy Interbrand. She believes BA was seen as a “heroic” organisation with a lot of innovation and as a champion for Britain overseas. “They need to rediscover that heroism in a modern form,” she adds.

If the setbacks at Terminal 5 can be swiftly overcome, BA will be able to offer a vastly improved service for business travelers. In the competitive world of Open Skies, BA will need to regain its stature by offering excellent customer service to beat the new breed of lower cost rivals.