British Airways was saved from ruin over the last six years by a major change programme highlighted by a dramatic overhaul of its buying procedures, the Aviation Procurement and Finance Conference was…
British Airways was saved from ruin over the last six years by a major change programme highlighted by a dramatic overhaul of its buying procedures, the Aviation Procurement and Finance Conference was told in Abu Dhabi.
Silla Maizey, BA’s Head of Procurement and Finance Operations, said the airline escaped from a “burning platform” by transforming its procurement methods to save hundreds of millions of pounds.
She told the conference that by 2000, with the emergence of budget carriers Ryanair and easyJet, BA had slipped from its position as a global market leader to the bottom of the league, and was fighting for survival with debts of £6.6 billion.
Forced to take drastic action, BA launched a programme of strategic saving initiatives in 2001, slashing its list of preferred suppliers from 14,000 to 2,000, revolutionising its procurement systems and cutting its workforce by more than half.
The exercise was a success, but Maizey emphasised that BA is still on a journey to recovery, with
a pensions deficit of £2.2billion requiring the airline to pay £800 million into its pension fund this year.
“Last year we regained our position, completing the passage from first to worst and back to first again,” she told the three-day conference, which was reaching its conclusion at the Abu Dhabi National Exhibition Centre.
“We have made huge progress, making a saving of £500 million to date and reducing our head count by 60%. But we have still got a lot to do. Our job is not finished.”
She said BA is currently embarking on its biggest ever procurement exercise to replace its widebody fleet, while in September the airline will move into its new home at Heathrow Airport’s Terminal 5, which is nearing completion.
Organised by Streamline Marketing Group, the Aviation Procurement and Finance Conference, with Boeing as its platinum sponsor, was part of the Aviation Procurement Expo (APEX), an important new event commissioned by the Abu Dhabi Government and central to its plans to establish the UAE capital as a world-class aviation hub.
More than 200 delegates from international airlines and related industry sectors attended the conference.
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