Alex Cruz is walking a fine line. On the one hand he wants British Airways to become a more cost-effective operation, but on the other he still wants to retain its reputation as a premium carrier.
British Airways pledged to spend $5.9 billion (£4.5 billion) on improving its passenger experience as the airline looks to bounce back from a turbulent year.
Some of the investment had already been allocated in previous announcements but it seems CEO Alex Cruz wants to spend even greater sums on making the airline more competitive.
It comes after a torrid year for the airline, which has seen it battle strikes, a massive IT failure, and criticism over its decision to eliminate free food on some of its flights (as well as the way the change was implemented).
While Cruz didn’t link the recent problems with the improvement program, it is clear that he believes the airline needs to get better if it is to thrive.
“We will invest £4.5 billion ($5.9 billion) over the next five years to improve the experience of customers in all cabins of our aircraft,” he told an audience at World Travel Market London on Tuesday.
Cruz repeated many of the announcements made back in April, but sprinkled his speech with some new details.
The airline is going to reinstate its policy of offering two full meals on certain long-haul flights, an indication that its decision to replace one of these with a snack was a bad idea.
There is also going to be a bigger investment in its long-haul business-class product, Club World, which will now have $788 million (£600 million) spent on it, up from $525 million (£400 million).
Power points will also gradually be installed on all aircraft with passengers getting access either through an AC plug or USB.
The buy on board plan, which was the subject of so much anger when it was brought in on short-haul flights in January, will stay but Cruz argued it was now a much better proposition.
“I know the introduction of buy on board catering on short-haul economy had its critics. I know we did not deliver it initially as well as we could have. We have listened to our customers and our cabin crew very carefully and we’ve made changes,” said Cruz.
“We’ve simplified the menus, we’ve allocated more crew to busier times, busier flights, to ensure we can provide a faster service. Take-up is running much, much higher than anticipated, but we are committed to making this element of the customer experience the very best in the airline industry,”
During his time on stage, Cruz repeatedly referred to British Airways as a “premium airline,” something many critics would no doubt disagree with. Since taking on the chairman and CEO roles in April 2016, he has been criticized for a perceived move downmarket.
These attacks haven’t dampened his belief that the airline needs to change if it is to survive in a world where it is being pressured from low-cost carriers as well as premium Middle East airlines.
“As a national flag carrier, we are not granted some special immunity from the way the industry has changed. Incumbency does not grant any privilege. We have no divine right to flourish and we do not ask for one. The plight of airlines like Alitalia is testament to that. The lesson of recent years for flag carriers across Europe has been that if you don’t change habits formed in cozier eras you will shrink and ultimately risk irrelevance,” Cruz said.
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Photo credit: A British Airways Boeing 737s are pictured. CEO Alex Cruz sees the airline returning to its glory days. British Airways