I’ve not been particularly subtle in expressing my skepticism over British Airways CEO Alex Cruz.
Since ascending to the helm of British Airways in early 2016, Cruz has treated British Airways like the low-cost Vueling carrier he previously ran. Small problem: a regional low-cost carrier is not the same thing as a large international legacy airline.
In what I called British Airways’ Curious Strategy for Growth, I questioned Cruz’s approach to profitability. I’ve never seen an airline cut its way to growth and BA’s odd focus on cutting the small things that made it competitive never made sense to me.
A few examples:
British Airways Passengers Angry at Lack of Food and Toilet Paper
More British Airways First Class Cuts
British Airways Will Have Less Seat Pitch Than Ryanair!
The Death of the English Breakfast on British Airways’ Domestic Flights
Now comes the great IT Meltdown. In what may become the most expensive mistake in company history (based upon projected compensation), CEO Cruz seems tone deaf in his response.
Wearing a yellow safety jacket in BA’s (hazardous?) operations control center, he fails to offer the most logical solution: book passengers on other carriers. Being penny wise, pound foolish emanates from the top down and BA missed a huge opportunity. Already, press outlets are attacking British Airways for being so stingy. There are few things more aggravating than a British Airways agent telling you that he cannot get you to Frankfurt when Lufthansa has dozens of seats for sale on a flight departing in two hours.
Is BA’s IT Outsourcing to Blame?
Cruz embarked on a massive cost-cutting mission early in his tenure. One of the changes was moving approximately 1,000 IT jobs from Great Britain to India. Indian workers are paid far less than their British counterparts. Could that have led to the weekend IT meltdown?
CEO Cruz empathically says no–
I can confirm that all the parties involved around this particular event have not been involved in any type of outsourcing in any foreign country. They have all been local issues around a local data center who has been managed and fixed by local resources.
What does local mean? British Airways staff in the UK? Or cheaper, outsourced staff that let something occur that never should have occurred? Outsourcing doesn’t have to mean India or the Philippines: often it can just mean cheaper domestic labor.
I am confident the truth will come out and if the IT meltdown was caused by contractor sloppiness, I hope BA will learn once and for all that outsourcing may look good on paper, but increases risk of these sorts of catastrophes.
Why Cruz Should Go
Cruz is the face of British Airways and the leader behind it. The “buck stops with him” and I’ve never seen a leader who seems as disconnected with the nuances of customer service and loyalty than Cruz. He has vowed not to resign but hopefully shareholders express different wishes. If he does stay onboard, I hope he will at least use this as a learning opportunity: something is not working. BA has had 12 IT outages in the last year. Who knows how bad the next one might be…
Matthew, i couldnt agree with you more. I flew BA twice last month for the first time in awhile, and I was absolutely shocked at how downhill they have gone.
First, to be asked to pay for a soft drink on a flight of 2 1/2 hours is outrageous for a “premium” airline.
Second, BA’s Club europe is a joke. The seats are the exact same size and legroom as economy! You are purely paying to guarantee no one sits immediately next to you.
And lastly, when i flew, the app wasnt working, and neither were the kiosks at t5, so i had to wait in line for 40 mins to check in, even though i had no luggage! There are airlines in developing countries that are doing a better job than BA now, at this point!
**W H I N N Y** AUTHOR/WRITER/BLOGGER!!!! Get over yourself and grow the eff up!
Is that you Mr. Cruz?
I don’t think so Matt, he said his name is David J, Mr. Cruz’s name written in that fashion would be Alex C.
David, at least try and be constructive with feedback you post anywhere. What exactly was wrong with Matt’s commentary of the situation? Thanks Matt for the update and I agree that BA is being extremely stingy with how they’re handling the incident.
You’d be surprised at how many people leave comments under different names but using the same IP address! 😉
David J… If the author is a whiner.. Then you are an idiot as you offer no intelligent feedback. Instead of using your fake pseudonym you should just call yourself L.Oser..
And sure enough, BA is trying to weasel its way out of paying EU261 compensation, just as I predicted. Definitely time for Cruz to get the boot, not that I have a dog in this fight.
Typical manager who has only cost cutting in mind. He should definitely go and take responsibility especially for the IT issues caused by outsourcing and lack of working backup and redundancy systems.
American Airlines, United and British Airways all seem to have one thing in common: they believe they are “too big to fail” based on their government protected monopolies and near monopolies in their respective countries, fortress hubs and anti-trust immunized “alliances” with other airlines.
As such, all three of these airlines (and others) have become incredibly arrogant and abusive in the exact ways that monopolistic companies ALWAYS behave.
It’s time that regulators on both sides of the pond step in and put an end to these abuses either by the imposition of regulations regarding the excessive nuisance fees that have clearly gotten out of hand as a result of their market power and the inability for new entrants or other competitors to obtain gates and slots at airports such as Heathrow in London, JFK, LaGuardia and Newark Liberty airports in NYC, or elsewhere where facilities are scarce.
And if this does not do the job, then it’s time to force divestitures of gates and slots at airports from these arrogant and abusive companies so meaningful competition can emerge to eliminate these toxic abuses of fare paying customers.
Things I dislike
1. Exorbitant Fuel surcharges
2. Praying for advance seat selection, even in biz class
3. Terrible biz seats. Terrible layout too
4. Sub par lounges and amenities
We have a long trip (Jfk, our, bom) booked with miles coming up. That will be our last BA flight
As the old adage… “Penny wise, pound foolish.”
What a sad and sport state of affairs.
Yes, he should resign ! the man is obviously totally incompetent, he has brought our national airline into a shambolic second or even third grade business.
He and his team of fellow incompetents should do a bit of research, look at Sir Colin Marshall, see how he ran the airline and in the space of 18 months turned its failures into fortunes. ,
He valued and appreciated his staff and had the respect of them and the public ! He was a leader whose staff were proud to serve and wear their BA uniform.
I spent 21 years working for BA when it was an airline to be proud of, not the pathetic apology of an airline it s today !
As usual, people blamed the Indians without knowing what the actual cost was.
I hear all the negative comments and understand fully having experienced the deterioration of BA over the last decade. However in reality, Cruz is just a gopher that has been brought in by Walsh to cut costs. If he resigns he will simply be replaced by another similar cost-cutter.. In truth it’s Walsh that should resign. Look at how he “saved” Iberia as The Slasher.. Oh and get rid of that useless rubber-stamping board….
That’s a fair point: Walsh is likely the one pulling the puppet strings.