British airways reorganization in the 1980s

Changing the Culture at British Airways

I remember going to parties in the late 1970s, and if you wanted to have a civilized conversation, you didn't actually say that you worked for British Airways, because it got you talking about people's last travel experience, which was usually an unpleasant one. It's staggering how much the airline's image has changed since then, and, in comparison, how proud staff are of working for BA today.

-British Airways employee, spring 1990

I recently flew business class on British Airways for the first time in about 10 years. What has happened over that time is amazing. I can't tell you how my memory of British Airways as a company and the experience I had 10 years ago contrasts with today. The improvement in service is truly remarkable.

-British Airways customer, fall 1989

In June 1990, British Airways (BA) reported its third consecutive year of record profits, £345 million before taxes, firmly establishing the rejuvenated carrier as one of the world's most profitable airlines. The impressive financial results were one indication that BA had convincingly shed its historic "bloody awful" image. In October 1989, one respected American publication referred to it as "bloody awesome,"1 a description most would not have thought possible after pretax losses totalling more than £240 million in 1981 and 1982. Productivity had risen more than 67% during the 1980s.2

Research Associate James Leahey prepared this case under the supervision of Professor John P. Kotter as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.

Copyright © 1990 by the President and Fellows of Harvard College. To order copies, call (617) 495-6117 or write the Publishing Division, Harvard Business School, Boston, MA 02163. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.

1. Business Week, "From ‘Bloody Awful' to Bloody Awesome," October 9, 1989, p. 97.

2. As measured by available ton-kilometers per employee, or the payload capacity of BA's aircraft multiplied by kms flown, the industry standard for productivity. BA's ATKs per employee were 145,000 in 1980 and 243,000 in 1989.

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491-009 Changing the Culture at British Airways

Passengers reacted very favorably to the changes. After suffering through years of poor market perception during the 1970s and before, BA garnered four "Airline of the Year" awards during the

1980s, as voted by the readers of First Executive Travel. In 1990 the leading American aviation magazine, Air Transport World, selected BA as the winner of its Passenger Service Award. In the span of a decade, British Airways had radically improved its financial strength, convinced its work force of the paramount importance of customer service, and dramatically improved its perception in the market. Culminating in the privatization of 1987, the carrier had undergone fundamental change through a series of important messages and events. With unprecedented success under its belt, management faced an increasingly perplexing problem: how to maintain momentum and recapture the focus that would allow them to meet new challenges.