August proved a costly month for British Airways when their flights in and out of London Heathrow were disrupted by unofficial industrial action taken by some of the airline's staff and by employees at the catering supplier, Gate Gourmet. While BA chief executive Rod Eddington said "This is not our dispute ... everyone involved in creating this situation must come to their senses", it seems to me that BA cannot absolve itself from all blame - and there are important risk management lessons to learn.
One of the most important is the need for the airline to improve its industrial relations. It is no stranger to expensive disputes. In 2003, BA is estimated to have lost around £40m as a result of unofficial strike action. And it only narrowly avoided a strike over pay last summer. Another lesson lies in managing its supplier risk. Gate Gourmet has not made a profit since 2000 and there are obvious dangers in contracting out services to businesses which are struggling financially - a clear example of where cheaper may not mean better.
It appears that BA's contingency plans could also benefit from reassessment.
Complaints from stranded passengers included poor communication by airport staff and inability to get through to the advice line.
This August's industrial action is estimated to have cost BA up to £40m.
But the greater cost must be to its reputation. In its battle against the 'no frills' low-cost airlines on some routes, BA has stressed its quality of service. Disillusionment is likely to be setting in.
