British Airways: Efficiency (Hansard, 5 February 1981)

§ Baroness Trumpington
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ The Parliamentary Under-Secretary of State, Department of Trade (Lord Trefgarne)
My Lords, the Government expect the board of British Airways to improve efficiency in the use of capital and labour resources to match the level of its most efficient competitors and to attain a level of profitability consistent with the financial target that we have set for the airline.

§ Baroness Trumpington
My Lords, in thanking the noble Lord for his reply, may I ask whether he would agree that, despite the technical excellence of British Airways, the airline is consistently below average in the world airline efficiency charts, owing to gross overmanning and heavy unionisation?

§ Lord Trefgarne
My Lords, I think that my noble friend overstates the position slightly. Certainly there is room for improvement in British Airways, but in recent years there has been just that. I can give my noble friend sonic figures. For example, in 1979–80 output per employee was 7 per cent. better than the 1978–79 level, which in turn was 10 per cent. better than the 1977–78 level. I could give my noble friend further figures along the same lines, but that might unduly weary the House.

§ Baroness Trumpington
My Lords, I thank the noble Lord for the figures he has quoted. Is he aware that according to a recent study comparing 12 different major European and American airlines, plus Japan Airlines, British Airways' revenue earned per employee is the lowest and that it is also at the bottom of the table when comparing passengers carried per employee?

§ Lord Trefgarne
My Lords, I cannot pretend that all is necessarily perfect with British Airways; indeed it is not. There is still room for improvement, as I have said, but in looking at the surveys that are made one must consider carefully whether those who carry out the surveys are comparing like with like.

§ Lord Clifford of Chudleigh
My Lords, is it not a fact that on the formation of British Airways a certain gentleman was asked to join the board of the airline, but said that he would not do so unless it agreed to 1276 take action regarding certain overmanning and the top-heavy situation? He then went on to join the board of British Caledonian. Surely from that we can learn a lesson for the running of British Airways.

§ Lord Trefgarne
My Lords, I do not know who the gentleman is to whom the noble Lord refers, but perhaps a better course would have been for him to join British Airways and try to put it right.

§ Lord Davies of Leek
My Lords, is the noble Lord aware that some of us would like to know on what authority the question of overmanning is analysed? If the overmanning is analysed for the purpose of seeking cuts, will the noble Lord let it be known to the captains and other staff of British Airways that some of us who use the airline have a feeling of confidence and of being in safe hands when we are taken to various parts of the world? No good is done to the system by attacking it or by trying to cut and pare its cost.

§ Lord Trefgarne
My Lords, I agree with the noble Lord to a very great extent. In technical terms British Airways is in my opinion the best in the world. On the other hand, with regard to the question of overmanning, which several noble Lords and noble Baronesses have raised, the British Airways management is itself on record as saying that there is room for improvement, and that is what it is striving to achieve.

§ Lord Boyd-Carpenter
My Lords, is it not a fact that the punctuality record of British Airways has greatly improved in the last year or two? Will my noble friend also confirm that the outgoing chairman, Sir Ross Stainton, has been tackling the overmanning problem with courage and determination.

§ Lord Trefgarne
My Lords, with regard to the latter point, my noble friend is quite right. Certainly Sir Ross Stainton, who has recently retired as chairman of British Airways, had a most distinguished record with the airline, in particular in recent years when he was chairman, and he has undoubtedly achieved considerable reduction in the manning levels to which my noble friend referred.

§ Lord Beswick
My Lords, may I say what a delight it is to hear a Minister at that Box supporting a public corporation?

§ Lord Orr-Ewing
My Lords, before we have a debate on this issue on 18th February, will my noble friend study the charts which appeared in Flight International of 3rd January? I reliase that any one criterion is not a perfect reflection, but Flight International contained eight charts and British Airways was not shown up very well by any of the eight different criteria. Is it not rather sad that following the amalgamation of the British Overseas Airways Corporation and British European Airways, from which it was hoped there would be considerable economies, the total number of personnel in British Airways in 1979 reached an all-time peak of 59,000? That is not the kind of economy which this Parliament was looking for.

§ Lord Trefgarne
My Lords, I have already referred to the decline in manning levels in British Airways in the last year or so. In fact, the peak to which my noble friend referred was reached some years earlier than he suggested, and figures have been significantly below that level in recent years. I have already studied the charts to which my noble friend referred, but I shall ensure that I refresh my memory on them before the debate which we are to have on, I think, 18th February. On the question of punctuality raised by my noble friend Lord Boyd-Carpenter a few moments ago, I would say that I believe that my noble friend Lord Kimberley has put down a Question on that precise point, and it is to be answered the week after next.

§ Lord Brockway
My Lords, is the Minister aware that many of us who travel on British Airways are deeply impressed by the efficiency of the service and the friendliness of the staff? Is it not a matter of patriotism that we should be giving support to our own airline and seeking constructively to bring about continual improvement?

§ Lord Trefgarne
Yes, indeed, my Lords; but of course only a small percentage of British Airways passengers are British people, and for the others patriotism may go in a different direction.

§ Lord Balfour of Inchrye
My Lords, is it not a fact that though much yet needs to be done in British Airways, nevertheless credit is due to those who have been working in the corporation? As regards punctuality, is it not a fact that 70 per cent. of British Airways' departures on long-haul leave on time, compared with, I think, 56 per cent. of Pan American's and 65 per cent. of TWA's? So the competitive state of British Airways is not as desperate as certain individuals wish to suggest.

§ Lord Trefgarne
My Lords, of course we in the Government have to judge British Airways not only by its competitiveness and efficiency, which we do, but also by its financial results which, like those of other airlines, are at present not as good as they might be. However, we are to have a debate on this matter in a week or so, and perhaps it would now be appropriate to move on.