BA cuts out the cost of short-haul meals

It will take more than this to reduce its enormous losses, but British Airways has decided that meals on short-haul flights after 10.00am are for the chop…

Every business should take the time to trim its costs, to cut out the fat and avoid excess.  A good way is to consider all the possibilities of reducing complexity in a business.  A key role for operations management in any sizeable business should be to consider what bells and whistles are provided to customers which actually add very little value but which incur substantial costs.

In its quest to reduce its huge losses, BA is looking at all aspects of its cost base - particularly those elements that are within its control.

The Guardian article describes how BA is currently “burning” over £1m per day (i.e. a daily net cash outflow per day).  The decision to axe free meals on short-haul fllights is expected top reduce its operating costs by around £20m per year.  It remains to be seen whether the decision will have a negative effect on demand for BA flights - which might partially offset those cost savings.

Slowly BA seems to be turning itself intoa quasi low-cost airline, but it has a long way way to go.  By far the biggest cost disadvantage it faces compared with the competition are the average staff costs of its cabin crew.  That’s a much harder nut to crack…

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