British Airways Strike May Hurt Brand

Article excerpt

British Airways Plc's cabin-crew strike may cost the carrier 1.4 billion pounds ($2 billion) in lost sales as travelers defect to rivals, a study shows.

Revenue typically drops as much as 18 percent in the year after consumers suffer a negative experience with a service or product, according to researchers at Manchester Business School who surveyed 4,300 customers and employees of 56 businesses.

"Some people will always fly BA, but many others are fickle and they'll go where they want," said Gary Davies, the school's professor of corporate reputation. "I don't think the company or trade unions are taking this seriously enough."

British Airways has canceled flights for about 75,000 people so far this week as the strike by its 12,000 flight attendants enters a third day with no indication of a return to talks over the wage bill and staffing levels. The Unite union is planning further walkouts if it can't reach a compromise with the company, which had sales of 8 billion pounds in fiscal 2009.

Revenue at Europe's third-largest carrier will rebound to 8.5 billion pounds in the 12 months through next March, reaching 9 billion pounds in fiscal 2012, according to analyst estimates.

British Airways spokesman James von der Fecht declined to comment on the remarks from Davies, whose study 'Reputation Gaps and the Performance of Service Organizations' concludes that the "attitudes, tone of voice, body language and overall service delivery" of disgruntled workers can also hurt financial performance by substantially altering customer perceptions. …