Crisis management- not a time to be media reactive

The visibility of recent air transport incidents and accidents highlights the immediacy of news reporting and the availability of cctv or on the spot public with phone cameras or camcorders recording the incident.

The fact that an incident is unexpected does not require those organisations involved not to be prepared.

The increase in camera incident capture no doubt helps investigators providing an important extra dimension in the post incident analysis. However these images are also made available to feed the media craving for sensationalist news. The public love a drama and the media requirement for apportioning immediate blame and identifying the cause needs to be satisfied. The absence of an 'official line'' has heralded an array of pundits and experts who are put up for interview. Whilst not wishing to speculate on the cause in front of the microphone, they follow that comment by doing just that!

It is inevitable that accident/incident investigation and analysis to determine cause requires the time and the attention of very skilled individuals and thus the media wish for communicating immediate cause does not sit well with the need for providing measured accurate skilled accident investigation and suggests mutual exclusivity. The days, weeks ,months of careful investigation and analysis post accident do not exist to satisfy the needs of news thirsty media. The need is to identify an event or events, mechanical failure or human shortcoming with the objective to minimise or avoid a future repetition of the event.

An observation of recent air transport negative issues indicates that the industry crisis management divisions to a wide extent remain unprepared for the unscheduled issues that occur. This allows the media feeding frenzy to not let absence of immediate facts get in the way of a good story. By the time the organisational management have got their act together, the media have broadcast the drama, lost interest and moved on, leaving the accurate detail ignored, and the public misinformed.


The British Midland Kegworth accident 20 years ago became a case study of how to ensure a major accident didn't become a drama, with the airline staying ahead of the speculators. And yet 20 years on the availability of a text book response is ignored and the same old mistakes continue with speculation and inaccuracy of detail occupying the high media ground.


Specialist crisis management companies do exist to assist business in this very specialist area. How many organisations believe that they can ''get away with it'' based upon the held view that these situations will not happen to them and so remain completely unprepared- is this an issue based upon cultural approach or are these just the same organisations that deliver a questionable approach to normal everyday customer service?

There exists a critical first 5 hour media period where the absence of a proactive, undramatic and informed response will result in all the 'experts' providing a purely speculative,uninformed and often incorrect analysis of the incident, often with resulting negative impact on the organisation involved- an image that often stays in the public eye years after. Some senior management in certain organisations still believe a head office team designated to lead the business response will be the only effective method of media management. Even when the incident may be 15 hours flying time from head office and with them in the air en route to the incident scene and thus unavailable for comment over the critical first 5 hour period.


With so much budget put aside for 'positive' advertising and brand promotion, so little time and effort for crisis management is the order of the day in many organisations. Many involved in air transport seem naively prepared for the most important and most negative media issue that they all hope will never happen to them. This is a time to be proactive with the media, not reactive

Hubs or point to point? - the jury is still out

The existing world economic climate has diverted the air transport industry attention from the long term future strategic plan to one of short term survival.

The 2 major air transport manufacturers historically have offered similar size, similar mission profile aircraft, competing head to head for aircraft sales. It is interesting that the 2 major players have drawn different conclusions regarding the fundamental issue of future long haul airline operations.

In Toulouse Airbus have developed a range of competitive units serving hub and regional needs. But the A380 is truly a long haul hub machine uniquely able to satisfy needs for large volume lower frequency carriage between major points. The Airbus 380 is very much being supported by a limited number of very high volume hub to hub long haul routes .

Boeing meanwhile has created in the 787 a concept straddling both camps- being equally at home in the hub environment delivering a higher frequency solution compared with Airbus but also providing in the same unit a profit earner on leaner (and in many cases more customer convenient) point to point citypairs. The pioneer of large hubbing aircraft with the hugely successful B747 range is effectively downsizing its future unit favouring a relatively smaller long haul airplane. Now close to its first flight, embracing advanced manufacturing and structure technology that have not been without introduction issues, introduction to service is some 18 months behind the Airbus offering .

So the 2 manufacturers are genuinely about to follow separate paths in terms of their long haul products.


The major hubs airports have developed as a result of full service carriers serving major conurbations over many years. The introduction of the 747 variants allowed development of heavy volume hub to hub services using ultra large air transport units across a limited number of major hubs per continent. Hub airports having invested heavily to support the historic air traveller markets are now offering parts of the product that this customer market doesn't want or need- with less geographically convenient location, runway and terminal congestion, complex passenger processing and transit facilities and fallible baggage transfer functions being just a few of the issues.

Inconvenience for many and now with a 'green' impact, clearly a minimum number of hubs results in the position of that hub being less practical and convenient for an increasingly large proportion of air travellers.

Regional conurbations would prefer not to be dependant upon those remote hub locations and where possible stand alone with their own transport infrastructure. Will the ever more important green considerations and the need to reduce 'home to terminal' carbon emissions roll the dice in favour of the regional citypairs?


Will one strategy win over the other? -Who has understood the future of air transport better? Or have the manufacturers in focusing on differing strategies stumbled across solutions that will allow both to survive and thrive in these and future difficult times?

Based upon total profit achievement against each model over its production life cycle, will Boeing win the profit race ?or will it be Airbus?

Airports during the downturn

The industry is witnessing the largest short term downturn in living memory with large declining volumes and revenues.



Reported UK passenger figures for February are seeing declines of 5-20% but like any industry, some are seeing greater decline and some are better weathering the storm . Air freight throughput is witnessing even greater reduction with declines of up to 50% at some UK airports .

So is there a regional issue here? It appears not. The south eastern airfields seem to be suffering equally compared with other UK regions. Major hubs and regional airports are equally suffering with legacy supporters seeing the biggest volume declines, whilst the 'adapters'- airports supporting both low cost and legacy operators are maintaining a better position .

The hub airports have both a high cost base to manage and shareholders who expect returns on investment in line with their business maturity in the marketplace. They have been less encouraging of the arrival of low cost operators who, during the current climate are showing greater innovation than their legacy cousins.

However the low cost routes are not without their problems . Certain eastern European routes are suffering. On the legacy front, premium cabin business has fallen through the floor across Europe and beyond.


At the niche airport end of the business local authorities, having invested in infrastructure on the ground to promote new services are eager to see the positive fallout and local prosperity improvements delivered by the arrival of these carriers . There is no doubt that the arrival of new low cost operations has had the benefit of re vitalising some communities .


Those airports designed around hub strategies had their historic development backed by legacy carriers and designed around the concept of full service airline model . They provide infrastructure which now at least is in part deemed unnecessary by both low cost carriers and the customer base that uses them. The rows of terminal check-in desks are now at risk of being idle against a background of terminal check being replaced by on-line check in, which the public now embraces in order to avoid the airport queues.

To an increasing proportion of air travellers, many airports provide infrastructure with product oversupply . Hub airports are seeing migration of the value for money customer across to smaller airports with better proximity to the customers starting point or destination. Those whose competitive position would have been unimaginable 5 years ago.

So if there are winners and losers in this air travel cycle, is there a method of compartmentalising a winning airport model. Those who have strategically adapted to accommodate 'both churches' are fairing better. Those small niche ''community'' airports who invested to attract, whilst also seeing footfall reduction are still significantly ahead compared with their positions 3 years ago.

True its not all sweetness and light having to cope with dominant locos, who sometimes appear to have the petulance of a 5 year old child. Like any industry there are awkward business partners with excessive demands and business plans that cast aside the profitability of other business partners in the name of business success.

Will any keep their heads above water in 2009? Will business success in small negative territory be classified as 'job well done''for 2009? Who will end up with the highest annual footfall ?decline ?

Marketing through the internet

So what is the cost of running an airline frequent flyer scheme? Well the back of a fag packet calculation suggests that by the time you 've created the team, bought and programmed the software,maintained its accuracy, displaced fare paying passengers and fed and watered them in flight , not to mention any associated airport lounge variable costs, revenue loss can be as high as 5-10%.


Providing initial benefit to the customer base in the carriers' home markets as its rationale, the 'away from base' benefits for the overseas customer base ran the risk of providing a 'busman's holiday' in return for loyalty unless the offerings included third party local benefits ( often at a business cost ) On the up-side, prior repeat business from the card holder should have more than covered this as long as the scheme itself has solely delivered the product loyalty.

But is air travel just a commodity purchase now? For the high use corporate customers are they not already tied in by virtue of their corporate travel purchase policies? -again secured against a contract incentivising volume use again adding to the cost of sales- thus making the frequent traveller schemes more a liability than an asset?

The last time someone tried to be all things to all men they ended up being nothing to everyone. Frequent flyer schemes have been around for some time - but like any business segment there is a product cycle. Have they passed their maturity point to now become an increasing drain on the business with little genuine business improvement to be expected?

Historic large advertising budgets invariably resulted in significant above the line print media and broadcast campaigns - essentially a controlled scatter gun approach with a success rate of hitting a useful audience of 10-15%. thus 85% of the cost was wasted on putting your product in front of people never likely to use it.
Below the line direct marketing introduced necessary audience focus but still at large cost .
Now new methods of interacting with existing and new customer bases cost effectively refining the ad focus and removing most of the lead time associated with direct marketing activities.New opportunities to interact with the customer base are varied and wide through the web. Areas previously recognised as ''the domain of the teenager'' are now being used by the service industry leaders to interact with both product supporters and critics . All have potential positive benefits.
MP3 players have such widespread acceptance now, marketing through podcasting and Vodcasting delivers the message in both focused and very cost effective way.

What about the ''I hate airlines'' blog sites? Some airlines would have them shut down if only they could find legal process to achieve it . Others of course see these sites as opportunity to learn and convert. Blogging has become the domain of the savvy business . Critics take the time to comment on shortcomings and by using this critical analysis, business learns to improve its product offering. Bye bye costly and time consuming focus groups !!
These potential business improvements come at little direct cost at a time when cost containment could be the difference between survival and closure.



Has the traditional above the line campaign reached the end of its life? Has the below the line platform, the frequent flyer scheme done its catalytic work ? Has this business asset become a liability . Just as above the line budgets migrated below the line to provide better returns, this is no time to keep any marketing method going just for sentimental reasons .



Time to replace low cost marketing with no cost marketing? Is it bye bye broadsheet and broadcast and hello blog and twitter??

What do you think?

BA business strategy

BA and its approach to the UK regions was always an awkward marriage. Lack of volume premium traffic to and from the regions did not sit well with its full service multi class strategy. Long haul regional operations in total were counted at best on the fingers of one hand. European services were stop/start. Meanwhile bilateral agreements and restrictions at the base hub protected the carrier and its profitable premium cabin and volume economy revenues from any competition intensity.

Creating regional subordinates with more attractive(cost wise) operating strategies failed over the long term to deliver returns on investment necessary to support regional continuation. Hiving off the regions to a regional carrier has been the next step. Is this done with a view to building up the operation based on a different 3rd party cost platform and then re incorporating back into the BA fold at some point in the future-- well only BA know that answer for sure right now.

Are we giving BA too much credit for shrewd business thinking?

Is there even a plan? Maybe its simple- they just abandoned the regions cause they couldn't make money and moved forward to further strengthening the Heathrow operation.

Meanwhile at fortress Heathrow premium traffic is in decline . It s major hub is under attack by major legacy carriers who have been granted further access through the liberalisation of restrictions . Its European economy traffic is under threat from the low cost carriers operating direct from/to more convenient regional points thus bypassing the need for an often awkward transit at the Heathrow hub. The availability of new slots to other carriers with the opening of the controversial third runway will shrink the future asset value of the large slot bank held by BA.

In BA's defense they have inherited high operating and pension costs that require to be managed.

Where can they go from here? Premium traffic in decline - some corporate travel supporters introducing a 'no premium cabin' travel policy in the current climate. European routes under threat in the back cabin from the low cost carriers. The unthinkable starting to happen - low cost models now appearing albeit in small numbers on competitive long haul services. Success will however encourage more. Little opportunity for BA in terms of new profitable Heathrow services- they've got the world pretty well covered from Heathrow hub with the destinations it feels are potentially profitable . Overseas European and long haul carriers successfully moving into the regions to take BA's European and long haul customer base.

BA's share price sitting at less than 30% of it value 3 years ago and with a banking system reluctant to lend to even strong businesses for growth investment. Did its relatively protected position at Heathrow cause it to become lazy or undynamic ?-only to find that more dynamic business competitors have charged through the front door and landed an accurately placed

left hook on its glass jaw.

Is there a way out of the cul de sac? Is the unthinkable happening - BA loosing its 'global' status to become a specialist niche operator?

Maybe they should have abandoned the suits and ties a little earlier and moved Waterside to Glasgow, or Liverpool or Newcastle or anywhere apart from London to provide a little opportunity for some fresh thinking !

Do I hear cries for help?

The commercial pilot training environment

The traditional sponsored European pilot training programmes have all but disappeared. The airlines have largely released themselves from the burden of pre employment training costs leaving the potential pilots with the task of covering the costs to frozen ATPL of up to GBP70,000

Sure the UK situation is not aided by political positioning where VAT is levied against training costs leaving UK schools at a disadvantage compared with other more accommodating Euro governments.Thus UK training industry whilst arguably providing some of the highest levels of competency is disadvantaged compared with overseas training. European countries, by offering VAT exemption on training allow FTO's in those countries to offer significantly reduced comparable training costs.


But what of the instructor ratios?


These are not local airfield flying clubs catering for the private pilot, but organised professional flying training organisations with syllabus structure and timescales for student throughput. It has become apparent that even during the good times, some of the FTOs have been under pressure and the ratio of students to instructors sometimes sits at a 5 or 6:1 ratio. This, leaving the students to sit twiddling their thumbs and covering additional housing costs whilst they wait for their overworked instructors to allocate time to the students' one flight a week .

And what of the current climate ?

The industry as a whole and this segment included has a history of poor forward planning. During this downturn uncertainty of short term future pilot requirements and new graduate employment is having an impact on new student numbers.

Will the climate see the instructor volumes downsize and thus the organisations still under deliver to the student or will some sense prevail and the appropriate instructor /student ratios return.

Some FTOs will not survive this trough. Who will manage the business successfully through the cycle and who will stick their heads in the sand?

Are you a student at one of these FTO's ? What is your experience of the current training situation?

At best the passive carriers will just be left behind !

One thing is for sure - If you stick your head in the sand and hope it goes away-- IT WONT !


The airline graveyard is already full of once great and some not so great airlines for whom all of us still shed the occasional tear - ''Ah they were a great carrier- great people-fun times- shame they're not still around''

Carriers only marginally surviving during the good times now face possibly an impossible survival task.

The current economic cycle brings out the marketing aggression in the potential survivors and for the strategic thinkers, the stronger they work to survive, the more they are allowed to take market from the weaker, less responsive and less capable .



Looking at the weak from a pure business perspective how could this have been allowed to happen? A business strategy agreed at board level, which was at best marginal in times of economic strength and now in intensive care? Skills and leadership in poor measure? Not enough of one or not enough of both?

How many wise businesses 'put a bit aside against a rainy day' and how many others squandered the revenues made during the good times on questionable projects or consultants, only to realise that they now need that cash but no longer have the use of it?

Look at the carriers currently beefing up their commercial teams - bringing in individuals who can take a fresh view, who can identify fresh revenue streams to improve the business. Look at those who are not ! How many have already delivered their survival strategy and are already working ahead in expectation of business improvement in 12 months ?

Load factors down and high yield traffic falling through the floor for some carriers . With the airline graveyard becoming fuller by the month- who will be the next - Plenty are in 'intensive care' already .



Which will have the life support machines turned off by those who have contributed most to bringing the economy to this shameful point?