Magazine article Marketing

Mark Ritson on Branding: BAA Image Problem Is Self-Inflicted

Magazine article Marketing

Mark Ritson on Branding: BAA Image Problem Is Self-Inflicted

Article excerpt

It's been a bad month for BAA. Britain's biggest airport operator has been variously labelled as 'shameful' by Ken Livingstone, an 'out-of-control monopoly' by air-transport body IATA, and an organisation that 'profits at the expense of the consumer' by easyJet BAA now faces probes from OFTA and the Competition Commission, which are both keen to explore whether its control of eight major UK airports confers an unfair market advantage and allows for the poor treatment of passengers.

Is this really the story of near-monopoly power enabling a company to mistreat its customers with bad service? From last week's headlines, one might expect BAA's service levels to be among the worst in the UK. But if we leave the world of newspaper headlines and actually look at the market research, a surprising picture emerges.

Each year BAA surveys around 70,000 passengers, using an attitude scale to measure their satisfaction regarding waiting times and departure lounges. The results, published quarterly, are not as damning as one might expect. On a five-point scale, where five is 'excellent' and one is 'extremely poor', BAA's passengers rate their experiences around four (good) for most things. The lowest score for a single item in the past five years was 3.2 - signalling an 'average' performance. The evidence is overwhelming - BAA is not that bad. If you surveyed all your customers on a five-point scale, how many of you would achieve a four average?

So what is at the heart of BAA's troubles? First, BAA has significantly underestimated the importance of reputation management over the past 12 months. Baggage strikes and terrorist threats have combined to create a number of negative consumer experiences and critical media coverage.

A half-decent reputation strategy could have alleviated the damage done. Unfortunately, BAA chief executive Stephen Nelson appears to have missed CEO school on the day they taught media relations. According to Nelson, 'The problems of congestion and delay which affect passengers have their roots in lack of terminal and runway capacity, not the ownership structure of BAA.' To summarise: it's not us, piss off, everything will be alright when Terminal 5 opens. A more conciliatory stance could have alleviated most, if not all, of the ill will now aimed at BAA.

Second, BAA is guilty of enjoying what marketing guru Fred Reichheld calls 'bad profits'. With margins of 42% on revenues of more than pounds 1bn for the first half of 2007 alone, no one could doubt BAA's current profitability. …

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