It's not exactly the best time to be the CEO of an airline. It's especially not a great time to be Willie Walsh.
As custodian of the British Airways brand, Walsh presided over what was arguably the worst week in the airline's history at the end of March. To quote Walsh, himself, in a brilliant example of British understatement, "It has not been our finest hour."
In case you were cut off from all media and the Internet, what Walsh was referring to was the debacle that was the grand opening of BA's $8-billion Terminal 5 at London's Heathrow Airport [1]. What was intended to mark BA's return to prominence as a world-class airline instead became a customer disaster that will, I predict, still be taught in business schools 20 years from now as a case study in how not to do it.
So what went wrong? Put it all down to baggage handling. First, there was a failure of the baggage system the day Terminal 5 opened. Many flights were canceled, and many customers who were flying on transatlantic and other long-haul flights were told they could fly—but only with carry-on baggage. Five days later, more than 50 BA flights a day were still being canceled, and an estimated 28,000 pieces of checked baggage had not been united with their owners who undoubtedly were all over the globe by then, most of them without a change of clothes in nearly a week.
As if a system failure was not enough, the situation was exacerbated by the fact that many of the baggage personnel who were to report to work at the flagship Terminal 5 were prevented from entering the new employee parking lot by an overzealous security system that created long lines of people who could not get to work.
As if that wasn't enough, it seems that many of the new employees who were to work as baggage personnel at Terminal 5 had not been trained on the new system and had not been supplied with maps of the sprawling new terminal. As a result, many got lost trying to get the bags that did get through the system to the right aircraft.
Thousands of British Airways customers were stranded by flight cancellations. Those who were able to fly were separated from their luggage for days. BA hired hundreds of additional baggage handlers (one wonders where they parked) and temporarily "stored" thousands of pieces of luggage at Gatwick airport until they could be sorted and sent on to their owners. The concept of an airline "storing" luggage strikes me as just slightly incongruous.
‘All the marketing in the world will never make up for such disasters.’
The fallout from the week from hell for Walsh and his BA team was predictable. The airline became the laughing stock of the European press. Customers bolted for competing carriers, and the company's stock price plummeted. A sad irony is that this unfortunate event occurred precisely at the same time as an "open skies" agreement took effect, allowing U.S. and European carriers to fly into airports in Europe and the United States with far fewer restrictions than in the past. Thus, competition was about to become far more keen for BA and other carriers—precisely at the time when they most needed brand equity and a positive brand image.
"Knock-on"
It was also interesting to watch the "knock-on" effect. It has been widely speculated that the fallout from "Terminal 5" will adversely affect the image of Heathrow as a gateway to Europe. It's the world's busiest airport, and its existing four terminals were a challenge to navigate even before last week. Other airlines that fly into Heathrow could be adversely affected, as passengers seek to avoid its possible delays in favor of Frankfurt or Paris.
Predictably, the controversy has found its way onto the floor of the House of Commons, where British Prime Minister Gordon Brown expressed concerns for the negative effect that the "Terminal 5" disaster might have on Brand UK plc.
How, you ask, could such a disaster happen? How could such a monumental event in the history of this airline—and, one might suggest, of aviation itself—go so horribly wrong, especially when it was close to 10 years in the planning and construction?
The message here is that all the marketing in the world will never make up for such disasters. It's easy for me to be critical, seated as I am in seat 5F at 35,000 feet on my Air Canada flight as I write this, having flown through Heathrow this morning without a hitch (using Terminals 1 and 3, I might add) and anticipating the safe arrival of my checked suitcase.
Surely, you might comment, if one were opening an $8-billion facility through which millions of people are to pass annually, each of them on a tight schedule, one would have made sure that baggage system personnel had been trained and that technicians were available in the event of system failure. Might not one reasonably expect that the people we need to get bags to planes would be able to get into the parking lots and, therefore, able to report for work? Would we not have provided maps of the new work environment, so they could find their way to the planes?
Hindsight is wonderful, and I'm sure Walsh asked himself some tough questions in the wake of the catastrophe. No doubt, there are a few things that he and his colleagues would have done differently, had they but known what was about to blow up on them.
There are a few obvious lessons here, lessons that it's easy for backseat drivers or armchair quarterbacks or even a marketing expert in the skies to point to—but good lessons, nonetheless:
- When planning something big, make sure all eventualities are covered.
- Train your employees and then train them again.
- Don't leave anything to chance.
Technical systems failures can happen at any time, but they should be planned for, with backups and contingencies spelled out. The inability of baggage personnel to get their cars into the parking lot is a great example of a failure of something that is tangential to the provision of the core service but has the potential to prevent its delivery, with disastrous results.
As custodian of the British Airways brand, what should Walsh do now?