BA’s perfect storm

Everybody is surprised at how this tiny dispute in Gate Gourmet was able to leap from one little-known company to a major flag-carrier in a few hours and then bring the giant to its knees within minutes – rather like a computer virus. But it doesn’t take much.

Behind the mystery is the chronically deficient business model in which airlines rely utterly on robust, 24/7, service from caterers, ground-handlers and so on but are not willing to pay a sensible price for them. So margins and reward-packages at those suppliers are in perpetual conflict – in this case a dose of heavy-handed US labour relations (Gate Gourmet is owned by Texas Pacific Group) was all it needed to ignite the tinderbox.

In the extended Heathrow village of west London there are plenty of BA workers with friends and relatives in Gate Gourmet, but perhaps more importantly there are plenty who are spoiling for a fight to show incoming CEO Willie Walsh just what he will be taking on next month. That’s because they’ve been on the end of BA’s cost-cutting ever since 911 and because Walsh brings his own rancorous labour relations baggage with him from Aer Lingus. And all that in turn is because both BA and Aer Lingus were finally forced to address decades of dysfunctional business practices in a compressed timescale in order to survive.

There is precisely nothing unique to the UK in all of that – and every reason to think we will see similar horrors worldwide.

Leave a Reply