BACK in the 1990s, British Airways, the nation’s flag-carrier, proclaimed itself to be “the world’s favourite airline” in a long-running and hugely successful advertising campaign. Watching its iconic TV commercials from sofas across the country, many Brits—a pint-sized, starry-eyed Gulliver among them—swelled with pride at what was, at the time, a genuinely treasured national asset. Were British Airways to run the same campaign today, it would probably stir a mixture of derision abroad and embarrassment at home.

Rising competition is partly to blame. In recent decades the Persian Gulf carriers have dethroned BA as the standard-bearers for long-haul service, while a new breed of low-cost carriers has attacked its short-haul dominance. Yet the loss of prestige in distant lands and market share close to home has not hit the airline’s finances. To the contrary, British Airways rakes in the cash. It posted a £2.5 billion ($3.3 billion) net profit last year; equivalent to nearly half of all takings in the European airline market. Three factors have driven this success: slot restrictions at London Heathrow Airport, which suppress competition at BA’s home base; a merger-and-acquisition strategy under the flag of its holding company, International Airlines Group (IAG), which now also owns Iberia, Vueling and Aer Lingus; and a relentless dilution of BA’s once-superior customer service and on-board product.

It was the global financial crisis that put BA on its new, thriftier flightpath. Willie Walsh, the airline’s former chief executive, who now steers IAG, claimed in 2009 that BA was in a “fight for survival” amid structural changes to the airline industry. As well as confronting trade unions, he removed free meals from short-haul flights; reduced free baggage allowances while simultaneously increasing excess weight charges; and imposed a fee for seat reservations. At the time, the airline insisted it had “no plans” to limit basic fares to carry-on luggage. They soon made them. It introduced “hand-baggage only” fares on some short-haul routes in 2013, imposing a surcharge for checked bags.

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