Flying High
Paul Starrs, British Airways’ Middle East Commercial Manager, outlines the airline’s plans for the region in a chat with Akshay Bhatnagar. He is confident that the combination of convenient flight schedules and great products would make BA a leading choice for Middle East travellers

British Airways has completed 75 years in the Middle East. Where does it stand vis-a-vis other airlines operating in or out of the region?
Our 75th anniversary of Middle East operations in October was a significant landmark, as we’ve come a long way from the flying boats of the 1930s that needed 12 stops to cover the distance between London and what is now the GCC. Now we operate 49 weekly flights from the GCC to London’s Heathrow airport, among them a daily service from Muscat.

We have an extensive route network that allows our passengers to fly to over 148 destinations in the world. We are consistently improving our award winning products and services to retain our position as market and industry leader. We believe that with our new home at London’s Terminal 5, opening in March 2008; the embodiment programme of our new award winning Club World cabin completing in late 2008; and given our increasingly competitive fares, British Airways is leading the way in the aviation industry.

What are your expectations from the ME market? What is your game plan to achieve your stated objectives?
The Middle East has and will continue to be a very important market for British Airways. To that end, our plans for the region are one of sustainable growth based on demand. By offering convenient full-service flight schedules in combination with our renowned products and services, we expect that demand to and from the Middle East will continue to grow. As the most experienced carrier operating regionally, we believe we have the products, services and heritage to compete strongly against other carriers.

Are you making additional investments in ME? If yes, in what kind of services, how and where?
Yes we are. We are investing in our new Club World cabin and our new home in London, Terminal 5, which will see the majority of our services coming under one roof. Our new Club World cabin was recently unveiled in the Middle East. By the end of the year, our entire fleet of Boeing 747’s will be embodied and by the end of 2008, our Boeing 777 fleet will be completed. Additionally, we have introduced our OnBusiness programme for small and medium-sized companies. This innovative programme, launched earlier this year, allows companies to earn points each time any of their staff are travelling “on business”. The points are pooled and can be redeemed online at ba.com for free flights, upgrades as well as hotel vouchers.

We believe BA has raised US$1.7 billion for fleet expansion and upgradation. How do you plan to utilise this money and what is its significance for the ME market?
Our recent fleet announcement is a part of our plan to ensure that we are operating one of the most modern, fuel-efficient fleets in the world. While the exact routes for the 24 Boeing 787 Dreamliners and 12 A380 Super Jumbos are yet to be finalised, British Airways will ensure that the best combination is put forward to maximise load factors and convenience for our passengers.

You are promoting zero commission for travel agents in ME. What is the rationale behind it? How does it benefit your customers and how have travel agents reacted to the move?
The move towards zero commission gives customers complete transparency, as they know exactly what they are paying for. Most markets in the world have a zero commission scheme and in the Middle East, majority of the GCC countries have adopted a zero commission policy.
We have received a mixed reaction. Naturally, some of them (travel agents) do not like zero commission, however some agents have told us they are earning more money because they can charge a fee for their services.

Despite soaring fuel costs, BA has managed a 26 per cent increase in profits in H1 2007. Along with the weak dollar, I believe much of the credit goes to cost cutting as well. Your views?
We are pleased with our H1 results. Our collective efforts to sustain a 10 per cent operating margin have proven successful and everything we do is reflected in that.

Don’t you think the cost cut down has severely affected BA’s track record on labour relations (series of staff strikes) and customer satisfaction fronts? (20,000 passengers’ bags lost, fined £270 million for collusion, one-third flights late in UK in H1)
British Airways continues to invest in its products and its people. Heathrow airport continues to operate above capacity and this has caused strains on the infrastructure there. Our commitment and investment in Terminal 5 will ensure that our customers have the best experience when they fly British Airways.

The problems for BA are not over, as the airline’s passenger revenue globally went down by 1 per cent in H1. What is BA’s strategy to boost passenger revenue growth? How do you plan to attract high margin business and first class traffic, specially in ME?
Overall, our passenger revenue has remained very consistent and strong. From time to time, we do introduce special fares for our customers across the network.

For the Middle East, our combination of convenient flight schedules and great products makes us a leading choice for travellers. The demand for our premium services is very strong across the Gulf and we expect this trend to continue as we introduce new products and services.

BA is likely to move (after a long wait) to Terminal Five at Heathrow in Q1 2008. How is it going to impact your operations, specially for travellers on ME routes?
When it opens on March 27, Terminal 5 will change the way people travel. By combining the majority of our services under one roof, passengers from the Middle East can expect a much more efficient, customer-friendly travel experience, whether they are stopping in London or connecting to flights to any of our 148 British Airways destinations around the world.

At Terminal 5 passengers can expect much more in terms of convenience, services, luxury and space. Whether it’s the seamless check-in, with its 96 self service kiosks designed to eliminate queuing, improved punctuality and baggage handling; 144 stores to shop and 25 places to dine or possibly the largest–most luxurious lounge complex in the world catering for up to 2,500 passengers, Terminal 5 will set new benchmarks for travel
to London.

At the same time, due to the open skies agreement coming into effect, the highly lucrative transatlantic routes to US (your no.1 market) will see fresh and intense competition for BA. How do you plan to meet this challenge?
The open skies agreement presents many opportunities for British Airways. Next year, we will be starting flights from Continental Europe to the US. From London, we offer a greater frequency of flights to 23 destinations in North America, and 10 flights a day to New York City alone. We have great products, both in the air and on the ground, and our prices are highly competitive.

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