Managing risks and crisis - At the time of the Gate Gourmet strike British Airways lost the input of an essential key supplier with huge consequences for the firm - Essay Example

British Airways Introduction British Airways (BA) is the largest airline of United Kingdom in terms of fleet and second largest when it comes to customers served. In Aug 2005, workers of BA’s sole catering supplier Gate Gourmet took to a strike owing to the restructuring of the company that resulted in dismissal of hundreds of workers. To show solidarity with the sacked workers, BA staff held sympathy action and walked out of work as well, resulting in one of the “most acrimonious dispute in the recent history of British industrial relations”, as noted by European Industrial Relations Observatory (EIRO 2005).

Following this, BA was forced to cancel hundreds of flights, at one of the busiest times of the year. It is estimated that the strike caused disruption to more than 100,000 passengers and cost British Airways more than 40million pounds. (Bellaby 2005). Although, BA was able to optimally manage this issue, there were certain shortfalls. Thus, firstly the focus will be on what BA, particularly its various departments, did or could not do to minimize the problems that arose during the gate gourmet strike.

Then, there will be listing of the recommendations that could be followed by BA to avert crisis like this in the future. The baggage handlers, loading and other ground staff at BA went against their own organization in support of Gourmet workers, as they were looked upon as colleagues by the BA staff. BA assured that they had contingency plans set out for the delayed passengers. However the reality was far from it. Some of the problems that the airline had to attend to immediately and how they managed it are provided below.

BAs responses to the crisis and the evaluation of its response Inadequate Responses Airport was a chaos and overcrowded. People slumped exhausted on the lounges, or some even on the floor. (BBC 2005). More than a thousand passengers spent their night at the airport. Although, BA particularly its flight operations and customer service department did its best to provide information regarding their flight plans as well as accommodation options to these stranded customers, it was not able to do it effectively.

This is what one of the affected passenger said about BA’s abysmal service. "On Thursday night we decided not to rely on BA for accommodation after all their desks shut and their staff disappeared at 10.30pm." (BBC 2005a). BA firstly set up a command and control center, staffed with volunteers to manage and serve passengers. However, this step by BA’s customer service and marketing departments was not effective because this center always had big queues, with several customers complaining about the lack of information from the airlines.

Adequate Responses Although, BA found it difficult to manage the customers at the airport, it followed constructive strategies to prevent this situation from deteriorating. That is, BA particularly its customer service department took steps to limit this problem by calling it’s about to board passengers and advising them to rebook for flights instead of coming to the airport, as this would increase congestion. (BBC 2005b). In addition, the Check in staff had information cards, using which they told the passengers about the situation, and advised them accordingly regarding flight plans.

The other constructive strategy is, the airline had requested food shops inside the airport to stock up more food, owing to the demand from passengers. Some retailers like Pret and Upper Crust opened temporary kitchens in the airport premises so that the delivery time can be reduced. Marquees of food and beverages were set up to serve tired passengers. (Bellaby 2005). Most BA flights were cancelled for 2 days (11th and 12th Aug, 2005), and it took 2 more days to catch up with the operations. A BA spokesperson reported that there were 30000 bags to match with the passengers, and this had to be done manually.

(BBC 2005c). This problem was adequately managed by the HR department in association with the TGWU Union, who apart from declaring BA staffs’ strike illegal, also advised them to return to work, thereby correctly managing bag handling issues. Evaluation of its response and inclusion of business contingency theories From the above discussion, it is clear that although BA was able to manage the problems arising out of strike, there were shortfalls. British Airways chief executive Rod Eddington said "It is a huge disappointment to us that we have become embroiled in someone elses dispute.

" (Rao 2013). BA’s argument that the problem was with its supplier company, and hence is outside its’ control does not hold water. Outsourcing will not take away the accountability and responsibility that the parent company owes to its customers, as Corbett (2004) says in his book, “do not delegate the alignment of your firm’s interests with its Vendor /Supplier”. This is where BCP or Business Continuity Plan comes into play. According to BCI, Business Continuity is defined as “is defined as the capability of the organization to continue delivery of products or services at acceptable predefined levels following a disruptive incident”.

(Business Continuity 2012). A Business Continuity Plan should contain a Disaster Recovery Plan (DRP) which details the strategies that are in place to maintain essential services, recover functions that have been hampered, and continue with operations as swift and smooth as possible. The case of operational disruption at BA definitely calls for the implementation of Business Continuity plan at the highest level. In this case, BA could have done better than what it did in the following areas. Some of the recommendations for future to avoid or better handle such disruptions are given below.

Things to do differently if the same scenario were to happen again Firstly, BA was not able to aptly manage the main issue of stranded passengers, who dwelled in the airport, without adequate accommodation options. If same scenario arises, there is a possibility of passengers getting stranded and in those situations, BA along with its marketing and customer service department could request nearby hotels, restaurants to pitch in, to help passengers with food and stay. Even after accommodating in hotels, if there is case of excess passengers, BA should make arrangements to supply essentials like blankets and rolls for people who stayed at the airport, during future scenarios.

Offering refreshments or even meal vouchers to affected passengers should be carried with utmost importance. In the Gate Gourmet issue, problems arose in printing thousands of such vouchers at short notice. In future, this issue could be managed by outsourcing the printing of refreshment vouchers. In these situations, use of available human resources must be done prudently. Charting out rotas and paying for their additional time must be considered. In addition, BA’s HR department has to cross-train its staff to manage some of the necessities, like loading of cutlery, toilet rolls, etc.

, into the aircrafts, as a backup to handle contingency situations instead of being solely dependent on its suppliers. (Brian). Organizations must also encourage open channel of communications that enable employees to feel confident to talk about their issues directly to the management. In this case, had the BA provided its employees apt communication channels, to take up the issue of Gate Gourmet ill-treating its workers; they would not have resorted to the strike. (Bashford 2011). Supplier procurement process and policies need a closer look.

So, to avert similar scenario, BA and its supply or logistics department must come up with contracts with the existing as well as potential suppliers in an effective manner. In addition, those suppliers must be regularly assessed. Good rapport with its suppliers is an essential trait for any successful enterprise, and BA should be good in that process. (Corbett 2004). In addition, by having just one supplier, BA put all its eggs in the same basket. Instead of giving the whole catering contract to a single company, it could have divided it between two or three suppliers.

This way, if there was an issue with one supplier, the others could have pitched in, or at least the extent of the damage would have been much lesser. Implications of the decisions It is imperative that BA assess threats and risks that might affect or disrupt their services. This is a continuous process and must be undertaken at all costs. It not only helps alleviate the oncoming disruption but also helps instill a confidence in its people – be it the employees, customers or shareholders, so these people can be in a position to deal with all kinds of emergencies that could be faced by BA.

If BA wants to remain the “the world’s favorite airline” as its former tagline boasts, it would better consider business continuity seriously, else, the flight is sure to be a turbulent one for the airline itself. References: Bashford, S., 2011. British Airways: Building a Brand, from the inside out. Available from http://www.marketingmagazine.co.uk/article/1081775/british-airways-building- brand-inside(accessed on 4 May 2014) BBC., 2005. Q&A: Gate Gourmet dispute. Available from http://news.bbc.co.

uk/2/hi/business/4172548.stm(accessed on 4 May 2014) BBC News., 2005a. Passengers play the Waiting Game. Available from http://news.bbc.co.uk/2/hi/uk_news/england/london/4151026.stm(accessed on 4 May 2014) BBC news., 2005b. BA Strike Chaos starting to ease. Available from http://news.bbc.co.uk/2/hi/uk_news/england/london/4147780.stm (accessed on 30 April 2014) BBC news., 2005c. BA halts Heathrow flights all day. Available from http://news.bbc.co.uk/2/hi/uk_news/england/london/4142408.

stm (accessed on 5 May 2014) Bellaby, MD., 2005. British Airways Resumes Normal Operations. Available from http://usatoday30.usatoday.com/travel/news/2005-08-15-ba- operations_x.htm(accessed on 4 May 2014) Brian. Employee Relations at British Airways. Available from http://employeerelations.wordpress.com/employee-relations-at-british-airways/ (accessed on 30 April 2014) Business Continuity Institute. What is Business Continuity? Available from http://www.thebci.org/index.php/resources/what-is-business-continuity (accessed on 29 April 2014) Corbett, M, 2004.

The Outsourcing revolution: Why It Makes Sense and How to Do it Right. Dearborn EIRO., 2005. British Airways’ Heathrow Flights grounded by dispute at Gate Gourmet. Available from http://www.eurofound.europa.eu/eiro/2005/09/feature/uk0509106f.htm (accessed on 29 April 2014) Rao, HS., 2013. Thousands stranded at Heathrow as BA cancels flights. Available from http://www.rediff.com/news/report/ba/20050812.htm(accessed on 4 May 2014)