A research report with a word limit of 1,500 on British Airway’s (BA) change program that resulted in long-running industrial disputes between its management and crew members in 2009-2011.
The contextual information about the BA’s introduction of strategic changes – why BA produced this change, explain market (rising fuel costs etc.)
British Airways is the UK’s largest airline. Since becoming privatized in 1987, BA has continued to grow despite increased competition (Connell & Williamson, 2011).
The UK’s economic climate had a large influence to why the British Airways’ industrial occurred. In 2011, UK inflation was 4% on the previous year, compared to an average pay rise of 2.3% for the same period. This means that the cost of
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The ‘unfreezing’ phase (Lewin’s model) of this change was a gradual, drawn-out process.
Time:
As this was not a company in crisis there wasn’t a need to implement change reactively, British Airways had time to achieve their long-term strategy.
Scope:
British Airways did not require a transformation of the organisation as a whole. A realignment of the cabin crew’s operations and wage structure was the desired scope for this change. However, due to the industrial action taken by Unite the change had an impact organisation-wide.
Preservation:
It is important that BA preserves what makes British Airways, British Airways. This means they need to retain their brand identity, because this is one of their biggest selling points. It is also important to not destroy the business’ heritage and culture.
Job security for the remaining cabin crew will be at an all-time low. Key members of staff need to be reassured of their position so that BA doesn’t lose these assets to competitors.
Diversity:
The change should not affect diversity between divisions. This means that the culture should remain consistent throughout BA, from pilots, to cabin crew, to administration staff.
Capability:
The individual within the cabin crew will need to be capable of adapting to the new operational requirements and be able to accept the change in
Flight Attendants were worried about the arbitrary process MCA’s management used to resolve issues, expressly the margining of the seniority list and working conditions. This was a concern of job security.
• A catastrophic industry crisis as 200 000 staff were cut in the world aviation industry.
On October 22nd, 2001, the Industrial dispute between QANTAS and its employees was initiated with the offering of a new Enterprise Bargaining Agreement. This proposed an 18-month wage freeze for employees plus a sliding scale profit share scheme. Ten out of twelve unions under QANTAS accepted the terms of the agreement, barring the unions of manufacturing employees (AWU and AMWU). They were holding out for a 4-6% pay rise. On the 8th May 2002, some ten months later, the dispute was resolved when QANTAS agreed to an across the board 6% pay increase. This essay provides an in-depth analysis into the dispute, including causes, the resolution process, the role of stakeholders, and costs and benefits for all concerned.
By outsourcing, Qantas is able to significantly reduce costs and maintain it’s competitive advantage. However this advantage also has a draw back, hundreds of engineers have also been cut from their jobs and have had their jobs given to people overseas. This puts a bad reputation on the name of the business as an Australian business will cut jobs from Australian workers and supple foreign workers with jobs. Families and friends of these workers may feel resentment towards Qantas and choose to travel with another airline instead resulting in a loss of customers. This strategy has been effective in reducing cost but has resulted in a reduction of quality and safety and led to a decreased business reputation resulting in a loss of customers and stakeholders.
WestJet is facing an urgent problem. The pilots’ contract expires in two weeks’ time and the pilots are unhappy with the offer that has been presented. This has created conflict between management and the pilots as the pilots feel that too many things are being taken away. If a quick agreement is not reached, flights would be grounded, which would impact the bottom line and negatively affect culture. A collaborating approach will need to be applied in order to come to a swift resolution.
WestJet is facing an urgent problem. The pilots’ contract expires in two weeks’ time and the pilots are unhappy with the offer that has been presented. This has created conflict between management and the pilots as the pilots feel that too many things are being taken away. If a quick agreement is not reached, flights would be grounded, which would impact the bottom line and negatively affect culture. A collaborating approach will need to be applied in order to come to a swift resolution.
British Airways is the one of the largest airline companies, and the passengers carry overall in the fifth largest in the world. Most of plans are stay in Heathrow Airport which is the highest of main international airport. The British Airways has a long history and airlines cover 133 countries; include 373 airplanes. The BA Company includes 50,086 workers to be in the service, which is one of the largest employers and employees in the United Kingdom.
The first difference in the upgrade process entails WestJet Airlines switching to Sabre in October 2009 with very little precautions. The airlines were hopeful for a successful outcome with this approach, but unfortunately this was not the case as many challenges arose for the airlines. JetBlue on the other hand, was able to learn from WestJet’s mistakes and approach the upgrade process with advanced preparation and backup. Another major difference between the two approaches was that WestJet did not inform its customers of its upgrade plans until the day of the switch; whereas, JetBlue hired on temporary workers to handle basic calls and developed a backup website. The impact of WestJet’s approach on the outcome of the project was having
British Airways is one of the leading airline company in Europe, nevertheless in the last few years it has financial problems, talks begin between British Airways and the Unite (Britain’s biggest union) from January of 2009 to solve the problem. At the beginning, the relationship between the two parties was composed, but the milestone was in 2009 October, when the British Airways stated that they are going to cut the staff on long-haul airlines, and from 2010 they freeze the payment of the cabin crew for two years. In December, the majority of British Airways employees decided on strike actions for 12 days, during Christmas time. It was a critical date, because
As I was concluding reading the case study I felt like Lord King and Sir Marshall ran out of ideas to continue their quest in changing BA. This was highlighted to me when the text described a loss of vision for the future and lack of communication as Jick & Peiperl (2011) stated: “BA also faced both a loss of focus and a contradictory message” (p. 36). Jick & Peiperl continued to describe the lack of vision by stating “And in looking for a new focus, management dealt with the seemingly unattractive alternative of trying to get staff to identify with an issue as glamorous as cost-cutting” (Jick & Peiperl, 2011, p. 36). Life changes daily and therefore, organizations should ensure that their leadership maintains a creative
4. What recommendations do you have to change the process? As the structure of organizations change so do the behaviors of the organization. Passing along information is not always the best form of communication in my view. If the flight chiefs could get out from behind their desk and use face-to-face interaction to show they are committed to the change, it might help facilitate
The British Airways (BA) Debacle occurred because the management team planned and implemented a swipe card system which would allow management to use staff more efficiently and to record employees start and end time for each work day. However, the staff was not involved in the decision which led to a strike (Palmer, Dunford, & Akin, 2009).
Threat due to new entrants in the market: The threat of new entrants is low. Although there are minimal restrictions to entry because the UK airline industry is highly deregulated (Chernatony et al. 2010), there are several factors that are favourable for BA. The long-distance travel market from the UK is highly saturated, of which BA is a major player, while the short-distance market is also saturated by airlines such Easy Jet and Ryan air, which along with BA account for a large portion of the market (Steves 2010). Moreover, the biggest entry barrier in the airline industry is the cost factor (Azar and Brocks, 2010). The global economic recession weakened the overall air travel demand, which along with entry failures of Zoom and XL in 2008, could create doubts and negativity for new entrants (UK Airline Industry Analysis Researchomatic, 2012; Steves,
Staff training costs will increase significantly as Jet2(b) will look to Jet2-ify Monarch or new staff under Jet2’s existing successful “Take Me There” training programme. According to Amiot et al, employees who are actively involved during times of organisational change experience higher job satisfaction and lower psychosomatic health complaints (Amiot et al, 2006). As a Commitment Organisation, Jet2 management already consults employees regularly and allows increased discretion within their individual roles. It also recognises employee happiness as a key component in customer happiness, so will make boosting staff morale a priority too. All Jet2(b) staff, including crew and ground staff, will adopt the old Jet2 uniform. The Monarch website will be
The lack of change management is apparent as management did not communicate thoroughly and reassure staff there would not be turn-overs and pay cuts. The changes in perspective such as organizational development, change management, sense making, from the strikes are key issues to understand. Because all employees who operate the airline’s frontline operation staff were unintentionally not involved, the organizational plan to increase in efficiency by implementing the time card swipe system, resulted in a disaster, an employee walkout.