As British Airways (BA) flight 223 awaited security clearance to take off for Washington on 3 January, after terrorist scares had grounded the Heathrow service for two days, friends and relatives of those on board anxiously tracked the flight’s progress online. For three hours, nothing changed. Then, at 6.11pm, a web page fed with real-time data told them the plane was finally preparing for takeoff.
A tense situation was helped by a constant flow of information. And not for the first time in the airline’s recent history, IT helped to rescue a potentially disastrous customer relations issue.
Technology has moved to the heart of BA’s strategy, and the influence of CIO Paul Coby has steadily expanded. He now holds a key role on the airline’s ‘leadership team’ and chairs several internal management groups. His role has also grown externally: he recently took over as the chairman of Sita, the airline industry-backed telecommunications group.
His rise to prominence is partly a reflection of BA’s response to the upheaval in the industry since 2001. BA’s chief executive, Rod Eddington, appointed him CIO only a matter of days before the 9/11 terrorists attacks. Not that BA was in particularly great shape before that, trying to mount a response to the onslaught of low-cost carriers.
He found a grim mood at BA’s HQ. In the days following 9/11, analysts identified four airlines that would fail to survive the downturn: one was BA. “That really concentrated minds,” says Coby.
Tentative cost-cutting plans were soon transformed into the ‘Future Size and Shape’ programme. An initial target of cutting IT operational costs by 20% was exceeded. By 2003, the IT operations budget was down £93 million to about £180 million. And some of those savings were pumped back into new IT projects.
The rapid pace of change was driven by the worsening macroeconomic conditions. “It couldn’t have been a more turbulent time,” says Coby. “You name it, we had it: war, SARS, economic downturn. But paradoxically, it enabled us to do a lot of what we had been intending to do, and it allowed us to do it quicker.”
Some of the tough decisions were helped by Coby’s years of experience in the budget-strapped civil service, where he held senior posts in the Department of Transport. He cut the number of IT contractor companies at BA from more than 300 to fewer than 30. Well over 100 legacy systems were stripped out and replaced by a single SAP-based system. The company’s creaking reservations system was shut down and reservation services passed to a third-party specialist.
But there was more to the plans than removing waste. The company’s web site, BA.com, was overhauled as a means of counter-attacking the low-cost airlines. BA introduced employee self-service initiatives and rolled out self-service check-in kiosks to speed passenger handling. Some of those initiatives have paid huge dividends. Online sales have ballooned, and the airline was handed the accolade of ‘The UK’s best low-cost airline’ by The Guardian newspaper in 2003.
In fact, the very culture of BA seems to have been transformed. Today, the airline’s strategy is as likely to be influenced by technology as engineering. Tellingly, Coby says, Eddington shares one of his favourite slogans: “There are no IT projects, only business projects.” It might not have the same ring as ‘The World’s Favourite Airline’, but it says just as much about the new BA.
