Should British Airways shareholders challenge their managers decisions?

Dear All,

I believe that the one thing the Credit Crunch should have taught us by now is that we should all go to any length to put our point of view forward, especially where a subject as important as the survival of an important British Institution such as British Airways is concerned. In the past our silence and in particular the silence of Shareholders and Board members, has allowed the Senior Managers of important institutions such as the Royal Bank of Scotland to continue making irrational and bad decisions. In my open letter to BA Shareholders in the Times on 24.03.2010, I stated that as a frequent premium passenger, I strongly felt the only important remaining advantage in flying with British Airways was the quality and experience of its cabin crew. Having put my opinion as a passenger forward, I would now like to consider the situation from a business perspective. One does not have to be a financial genius to figure out that British Airways’ only chance of long term profitability and survival is by continued improvement in the service that it currently offers to its premium class passengers. It is these business passengers who are generating a significant proportion of BA’s profit and they expect an excellent service in return for their continued loyalty in flying with BA. Coming from a family of entrepreneurs having employed thousands of people and with my own successful career in the property industry spanning over 28 years, I completely understand the necessity in certain circumstances of reducing expenditure religiously to remain competitive. However, it is of utmost importance to act intelligently when implementing a reduction in expenditure. Costs should be cut only in areas where the decrease in expenditure does not result in a reduced and inferior service to high paying customers. In the case of British Airways, customer satisfaction is directly linked to the experience passengers have when flying with BA. Their experience with a professional and experienced cabin crew who are the face of BA and the one asset it has left to offer which distinguishes it from many other airlines, should not be sacrificed for a relatively insignificant cost saving. I received a huge response to my open letter in the Times on 24.03.2010. These included responses from BA Shareholders expressing their anger and disappointment with the inflexible and arrogant manner in which BA’s Managers have been dealing with their cabin crew. It is undeniable the BA’s Senior Managers have made many serious mistakes such as price fixing, bad planning for the opening of Terminal 5 and now their unfair and commercially unjustifiable treatment of their loyal cabin crew. I believe BA’s Shareholders should hold its Senior Managers accountable for their actions before it’s too late. It has bee proven time and again, that Senior Managers often happily retire with big bonuses whilst the Shareholders, other employees and general public are left to suffer the consequences and losses resulting from their bad decisions. Let us hope this does not happen with BA.

Kind regards,

Mamad Kashani-Akhavan
info@glfinance.co.uk