Case study of the

change
management of
British Airways
after the
economic crisis of
2008

21.05.2014.

Case study of the change management of British Airways after the economic crisis of 2008

The British Airways is the biggest airline of the United Kingdom and the
third biggest of Europe. It is one of the leading airlines of the world. During the
period between 2007 and 2008 it increased its profit by 3.1%. When the economic
crisis of 2008 which had effects all around the world started, the British
Airways like many other organisations had to face the large recession, so it
was necessary to make changes to survive the crisis.
When a company performs wrong or has to face problems like the
economic crisis, it has to set up change management. Changes mean serious
managerial problems for companies, because making changes is one of the
difficult challenges of business life and if an enterprise is not able to change, then
it will not survive. What is change management? Change management is the
process of diagnosing the errors of the companys operation, planning a future
state which the organisation wants to achieve and how it will be reached,
making the changes and fixing the new state into the company. The change
management can focus on technology, culture, strategy, structure, systems and
staff. There are three ways to recognize if changes are needed: proactive
recognition, reactive recognition and crisis recognition.
On the companys website can be seen that it had a 875 million profit in
2008 and the next year it had a 401 million loss (Milmo, 2009). After it the British
Airways recognized that changes are needed.
The reasons and the needs for change can be summarized as below:
The economic crisis, beginning from the subprime crisis to the Eurozone
crisis
Changes in market conditions increased competition from low cost
airlines.
Management problems the revolt by the working staff
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Case study of the change management of British Airways after the economic crisis of 2008

As you know, change management is a systematic process, which has

three stages:
Unfreeze stage: Diagnosing the problems, helping stakeholders to
understand the situation and the reasons of change and setting up a
strategy.
Movement stage: Providing trainings and education, making the change,
analysing the process and showing the positive effects of it.
Refreeze stage: Compensating negative consequences and reinforcing
positive consequences.
The British Airways had some difficulties at the unfreeze stage, because
instead of starting the systematic change, it started with a large cost-cutting
process missing identifying the problems and their reasons. With this decision the
airline made a big chaos in its life. It decreased the number of employees and the
perks of the staying employees, did not prepare the staff for the change and of
course motivation was missing, too. It should inform its employees about its
situation and why the current system cannot exist anymore, to sum up it should
do the unfreeze process. As in every situation, the first step is the hardest and the
British Airways failed at it by leaving out unfreezing and starting with the
downsizing strategy. These unexpected and fast happenings in the employees
point of view caused revolt; the management should give them more time to
think about their state. I think, in this case they would have been more
cooperative.
The second step of the change management is the movement stage.
Although there was downsizing the airline made positive changes, too. It
overcame low cost airlines by cutting the prices of the flights down and extending
its services which helped it to keep its existing customers and to keep the brand
loyalty. It also put emphasis on customer satisfaction and punctuality, furthermore
provided emergency trainings for the staff.

Case study of the change management of British Airways after the economic crisis of 2008

As at many other companies, the employees did not see any advantages of
the change, they put their interests before the companys. It is really hard to make
a change in such an environment, so British Airways should have put more
emphasis on communication with its staff and should have given them more time
to help them to decide.
Finally, they had to refreeze the changes. After the movement stage as I
mentioned the new state has to be stabilized and the consequences have to be
handled, so the negative effects must be compensated and the positive effects
must be kept and built into the everyday life of the organisation. It is a very
important process of change management because if it is not appropriate, then
the employees may feel unsatisfied with the new state. The staff must be
integrated into the new conditions and after it can come the next change. The
achieved goals can be celebrated, which will motivate them and make them
cooperative.
Summarizing the case study we can say the change management of British
Airways was successful, because it survived the economic crisis and it operates
well today. Despite the success, it did not manage well the changes, and it can be
seen by the walk-outs in 2009 and 2010. These cases should not have been
handled so hostile by the management and should have avoided the legal
procedure and in this case the whole procedure would not have taken as much
time.
Lastly I would like to mention the speech of Willie Walsh, the CEO of British
Airways after realizing that the business costs must be reduced.
Everyone knows that British Airways is in financial difficulty. Many of my
colleagues understand this. Our pilots have agreed a pay cut. Our
engineers have agreed more efficient ways of working. A third of our
managers have accepted voluntary redundancy. And nearly 7,000
colleagues volunteered for salary reductions because they wanted to help
this great British company in a time of dire need (WALSH, Willie, 2009).

Case study of the change management of British Airways after the economic crisis of 2008

References

https://www.google.hu/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CDEQFjAA&url=http%3A%2F
%2Fwww.expertessayswriters.com%2Fsamples%2FChange%2520Management%2520in%2520British
%2520Airways.doc&ei=eCl8U8KoDdKM7AbiooGoBw&usg=AFQjCNFhITh3Tu-

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http://www.academia.edu/5285221/British_Airways_Strategic_Management

Milmo, D. (2009, November 6). ( http://www.guardian.co.uk/business/2009/nov/06/british-airways-record-loss)

http://www.britishairways.com/en-gb/information/about-ba/history-and-heritage/explore-our-past
Walsh, W. (2009, December 14). I can't let this union drag us to destruction, says BA boss
Willie Walsh | Mail Online. Retrieved April 7, 2013.
The lecture slides of the Organisation and Management module made by Gyrgy Gonda (http://moodle.ibs-

b.hu/course/view.php?id=342 )
http://www.origo.hu/utazas/20091216-egymillio-utas-szivhat-a-british-airwayssztrajkkal.html
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