Outlook: In the end, Ayling may have to take off

Outlook nn delays to BA's american link, ionica's problems and why newcastle's head-hunting will be hard

BOB Ayling thinks that the staff turnover at British Airways is too low so he wants more people to leave the airline. In case you were wondering, he is not about to take his own advice and quit the chief executive's post for a plum job in the Government. He may be a fan of Tony Blair but right now he likes BA more and he has reassured his chairman of that.

Most of us would reckon that a company which cannot hang on to its staff is a poor one whereas the company that no-one wants to leave is a good employer. And so BA is. It's just that Mr Ayling thinks it can be made even better if he can just ease out the people he no longer wants and bring in those he does. It is a familiar story.

In order to achieve its target of recruiting 15,000 staff into customer friendly jobs over the next three years whilst limiting the net increase in the workforce to 7,500, BA will have to roughly double its rate of natural wasteage from 2 per cent to 4 per cent.

This is a tall order for a business where the perk of free flights goes a long way to encouraging staff loyalty. But BA is resigned to throwing money at the problem and those who can be prised away by early retirement schemes can expect very generous settlement terms.

Unfortunately, this process of shrinking the airline while simultaneously growing it is an expensive business. Thus BA contrived to report a 10 per cent fall in profits last year despite achieving pounds 250m worth of savings through its Business Efficiency Plan.

BA says the decline in profitability was due to currency losses and one- off strike costs. But it rather makes the point that running in order just to stand still is not enough when external turbulence can still knock you badly off course.

The City wonders when all these efficiency gains are going to start falling through to the bottom line. In the meantime the shares continue to underperform and the goal of pounds 1bn in pre-tax profits to match the pounds 1bn of efficiency gains BA has promised looks as far away as ever.

There is, of course, one way that BA's profits could lift off and that is if it finally gets regulatory approval for its alliance with American Airlines. Forget all that talk about increased competition across the Atlantic squeezing BA's margins. Even if BA/AA do sacrifice 300 slots, their combined market dominance will produce big profits.

However, the alliance is still not a done deal. BA and AA are about to celebrate the second anniversary of signing the deal and even with a following wind it could not now be launched until summer, 1999. If the alliance is not cleared for take-off this autumn, Mr Ayling may well be on the telephone to Mr Blair.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
The teaser trailer has provoked more questions than answers
filmBut what is Bond's 'secret' that Moneypenny is talking about?
News
Johnny Depp is perhaps best known for his role as Jack Sparrow in Pirates of the Caribbean
peopleBut how did he break it?
Arts and Entertainment
Paul Walker and Vin Diesel in Fast and Furious 5
film
Sport
Lewis Hamilton secured his second straight pole of the season
f1Vettel beats Rosberg into third after thunderstorm delays qualifying
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss