Remaining 'The World's Favourite Airline' British Airways: 1993-97 (B)

This case considers the transition from Sir Colin Marshall, key architect of BA’s spectacular restructuring and revitalisation (described in the case Becoming the World’s Favourite Airline), to Robert Ayling. In an increasingly deregulated market, Ayling’s challenge is to sustain BA’s position of leadership in the airline industry. He pursues various strategic initiatives (alliances, franchising, outsourcing), a massive cost cutting drive and initiates a controversial change of corporate identity. Although the stock market approves of most of his strategy, he runs into trouble on the industrial relations front.

The case illustrates the difficulties of making one's mark when taking over a highly successful company. Ayling has to establish his personal credibility and to find ways of preserving BA's change momentum and developing an obsession with growth. This means generating more revenues and cutting costs without damaging the reputation for customer service on which BA's success is founded. One of the keys to managing this balancing act is to respect the principles of fair process.