BA 'losing market share' claim travel agents
Updated on 26 March 2010
Travel agents tells business correspondent John Sparks that strike action is leading to BA losing "a significant amount of market share amongst business passengers." Channel 4 News Exclusive.
Business correspondent John Sparks writes: "Channel 4 News today landed on the battleground occupied by British Airways and Unite, where the protagonists lob various facts, figures and future predictions at each other.
This, of course, a replacement for dialogue and discussion, something neither side has engaged in for seven days now.
British Airways released a confident statement earlier today – that 75 per cent of customers booked to travel during the upcoming four days of strike action will get to their destinations.
That is up from 65 per cent during the first three days of strikes.
Unite hit back, claiming that the seven day dispute would cost the airline about £100m. This is roughly double the amount that BA told the City about earlier this week.
In a statement released on 22 March BA said: "Current best estimate is that the 3-day industrial action will cost £7m a day.
"Assessment of the cost of potential future industrial action can only be made after the event. As a result full-year earnings expectations to March 31, 2010 remains broadly unchanged."
So £7m a day, admittedly a best estimate.
That figure will include training costs for volunteer staff who were brought in to help run the contingency flights, the costs of hiring chartered aircraft, and losses related to re-booking passengers and refunding tickets.
What we do not know is how much money BA will lose in terms of advance bookings - bookings in the months leading up to the strike, and bookings made or lost to other airlines after the second wave of strike days.
You do not have to go far to find someone thinking about booking a summer holiday - the majority will certainly be thinking twice about booking with BA while industrial action remains a possibility - as it will do until both sides come to a settlement.
In the first concrete sign that this dispute could be causing serious damage on BA's core revenue stream - that of business and first class passengers - ABTA - which represents British travel agencies, told Channel 4 News tonight that BA "has lost a significant amount of market share amongst business passengers."
Virgin Atlantic supported this view, claiming an upsurge in premium passengers caused by the BA strike.
Virgin compared 'load numbers' during the first strike weekend with the same weekend two years ago (2008 is seen as a 'fairer' means of comparison than 2009 which was badly affected by the industry downturn).
Virgin says it carried 14 per cent more upper class passengers on each flight in comparison with the same weekend in 2008 and a staggering 38 per cent more on the critically important New York City routes. So it does seem to be grabbing market share - at least temporarily - in the seats where it really matters.
When we took these numbers to BA tonight it repeated its message from a few days ago - it does not expect year end earnings to be unchanged.
However, the prospect of future strikes could seriously eat into its reputation and next year's revenues - something the British Airways board will be mindful of.
