Some marry for love, some for money. When airlines cosy up and tie the knot, you know it’s all about the money. So will business travellers find it hard to join the celebrations and learn to love these newly-merged giants?
This thought came to me as I sat on a flight from Madrid to London, and politely asked the flight attendant for a cup of tea. I had booked the flight on the British Airways website, paying the full BA fare and, to be frank with you, felt that slight pang of disappointment when I realised it was operated by BA’s merger partner, Iberia.
The Iberia flight attendant seemed momentarily confused when I, a chunky middle-aged British bloke in T-shirt and jeans, eschewed the complimentary chilled cerveza in favour of a nice cup of tea. Surely my default choice would be something slightly stronger.
“Tea?” she checked. Yes, tea.
I was duly rewarded with a tea bag floating in a clear plastic glass full of tepid water. It looked like some kind of small brown sea creature dying in a specimen jar, and would probably have tasted like it too.
My request for hot water was not warmly received, but I did eventually get something which resembled what we have come to know and love as a cup of hot, refreshing Rosie Lee (though still in the clear plastic glass).
Now, I can keep this small cultural fissure in perspective. I really can. The job of airlines is to transport their passengers safely to their destinations, at reasonable cost. Fussy little details like Best Practice in Serving Beverages aren’t really that important, I’ll admit. I concede too, that there is compelling a business case for the merger between BA and Iberia. The marriage of two flag-carriers is expected to save £350m a year. In the current market, that is the kind of money that can make or break an airline. This marriage is all about two big players cutting costs after some very tough years.
Bigger really is better in the airline world. There is little room for boutique operators in a business where the list price of a new Boeing 737 is $72m and the best price for jet fuel comes from hedging supplies years ahead.
Ever heard of Cambrian Airways? No, thought not. Cambrian was the first British airline to resume passenger flights after the Second World War, on the improbably short route between Cardiff and Bristol. By the mid-1960s, the airline was whisking planeloads of holidaymakers from the damp, valleys and towns of south Wales to the uplifting sunshine destinations of Palma, Valencia and Barcelona.
The cover shot for the 1972 Cambrian timetable was a deeply-tanned brunette wearing a yellow bikini. History records that the tin serving trays used by Cambrian’s hostesses were frequently damaged in defensive swipes against wayward Welsh rugby fans. It was a different era.
Within a decade, Cambrian had succumbed to the economics of the airline industry, and had been folded in the new British Airways Board, alongside BOAC, BEA and Northeast Airlines of Newcastle. The world was struggling with recession and airlines were losing millions. The options were consolidate or go out of business. Sounds familiar?
The Americans have set the pace in the latest round of mergers. The alliance of Continental and United created a group with more than 80,000 employees and projected revenues of around $30bn. The new branding will blend United’s name and Continental’s blue and gold logo. But creating one airline from two established operators with different cultures will be more of a challenge than simply changing the branding.
Continental has a deserved reputation for quality of service that United does not share. United has more than its fair share of labour-relation problems.
But substantial savings have already been identified. Continental pilots are apparently cleverer at figuring out the optimum amount of fuel for a journey, while still allowing enough to divert the plane if necessary. United, on the other hand, has a better record on auxiliary power usage, the device used to start up airline engines. Put those two bodies of knowledge together, and the new airline thinks it can save around $75m a year.
Hywel Jones is a television producer who has travelled the world with the BBC and ITV. He now runs the international broadcast and corporate TV production company hi.tv.
