Originally Posted by
Oaxaca
Given that BA are marketing this as an upgrade and Alex Cruz is saying BA is "really, really far from being a low cost airline" (though in terms of cost base he may be right), I suspect you're in the wrong place if you are looking for logic.
The cost-cutting is so heavily ingrained throughout the whole management structure. This is exactly Alex Cruz's directive from the board. Impossible to prevent the inevitable slide.
It is impossible to compete with low-cost carriers when they have such a high cost-base. The airline is practically a flying pension fund!
British Airways need to differentiate in other ways, rather than copy an impossible-to-copy business model.
I predict a short-term equity bounce from improved financials, until passengers cotton on to the fact the value-add-differentiated-offering rug has been pulled from under them, and revenue inevitably declines as previously loyal passengers divert to other carriers. Will make for an interesting business school case study in a few years time.