the ba way in the marketplace customers - British Airways

THE BA WAY IN THE MARKETPLACECUSTOMERSSafety and securityWe believe that excellent ground security is at theheart of achieving comprehensive security in the airand work very closely with all relevant airportauthorities, government regulators and security andlaw enforcement agencies around the world. Ourexperienced team of dedicated security expertsfrequently audits every airport to which the airlineflies. If any concerns emerge during the audit, weimplement additional security measures to ensurethat security levels in place are commensurate withour own high standards.flying from Heathrow to Paris was diverted intoGatwick.We immediately notified the AAIB and launched itsown inquiry in accordance with our normalprocedures. We concluded our investigation byNovember 2003 and put in place a range ofmeasures by February 2004 to ensure such anincident would not recur. The AAIB report madeeight recommendations, acknowledging that all hadbeen implemented already.British Airways promotes an open safety cultureamong all staff, who are encouraged to reportincidents or concerns at every opportunity.It is only through the reporting of safety incidentsthat trends can be identified and new procedures putin place to enhance further the airline’s safety record.The safety of our customers, staff and aircraft isabsolutely paramount and will never becompromised. Even the most minor incident isreported to and assessed by senior managers.The target for safety and security is that 95% ofcustomers feel safe with us. Clearly we aim to be100% safe – no other target is acceptable. However,by measuring the perception among people who fly,we acknowledge that some flyers do not enjoy theexperience, even if they are experienced or frequentflyers.External events beyond the control of the airline suchas terrorism and war affect customers’ perceptions ofsafety, as do events that we control, such as a strikeor well-publicised disruption. Our measurement ofcustomers’ perception of safety for us and othercarriers comes from our UK brand tracking. This ispart of a monthly online survey of approximately 400passengers in the UK. The latest finding for the yearending March 2006 indicated that 90% of UK flyersfelt safe with us. This partly reflects the negativeimpact of last August’s industrial disruption on widercustomer satisfaction.In December 2005, the Air Accident InvestigationBranch published its final report into an incident inSeptember 2003, when a British Airways Boeing 757Monitoring customersWe monitor customer feedback on key stages of theirflights each month, using a sample of passengersseated in particular positions throughout the aircraft.The findings are presented monthly to the LeadershipTeam, the Executive Directors led by Willie Walsh,Chief Executive Officer. This mechanism ensuresthat where shortfalls are identified action is taken toaddress the issue.Overall 2004-05 2005-06 TargetperformancemeasuresOverall67% 67 % 71%satisfactionwith BALikelihood to 61% 61% 65%recommendBATable showing customer satisfaction with BA vs targetCustomer advocacyCustomer satisfaction and recommendation data hasbeen developed and refined over many years and is2005/06 Corporate Responsibility Report Page 1 of 6

ased on an on-board customer survey andaugmented by a follow-up telephone survey thatpicks up the arrival elements of the customer’sjourney. The data is subject to auditing and checksby GfK NOP (the independent market researchcompany) to ensure its accuracy and independence.The customer recommendation measure is based onthe percentage of customers who, when surveyed,would strongly recommend us to friends orcolleagues. We believe this measure provides animportant link between customer experience andfuture profitability. The target is 65% and this yearwe achieved 61% reflecting the impact of the August2005 summer disruption.the ability to check-in, allocate seats and print theirboarding cards, order special meals, book hotels andcar hire, manage their Executive Club accounts,search for information on the destination they arevisiting and find advice on wellbeing before, duringand after their flight. Customers can also makeenquiries and complaints via ba.com and, ifnecessary, trace any late-arriving baggage.A number of areas scored particularly highly incustomer satisfaction ratings. However, there aresome areas where customers say the airline mustimprove. The key issue for customers is making sureflights depart on time, especially at Heathrow.• customers rate cabin crew highly, with 83% ofpassengers saying they were extremely or verysatisfied with the service they received fromcabin crew (against a target of 83%).• overall satisfaction with booking on ba.com was83%, with leisure travellers and customers aged55 and over rating ba.com particularly highly.• overall customer satisfaction with flight departurewas 43% in February 2006ba.comOur website is central to our plans to make travellingwith the airline easier for customers.ba.com receives more than 20,000 visits every hour– roughly three times as many people as fly with theairline. Online bookings now account for 25% ofBA’s total bookings worldwide. The website wonthree major awards in 2005: Best Leisure TechnologyProject (CNET Technology Awards); Most EffectiveUse of IT (Information Age); Best Innovation(Business Travel Show).ba.com does far more than simply allowingcustomers to book and pay for tickets online. Thewebsite is designed to provide customers with anextensive range of services including up-to-theminuteinformation on flight arrivals and departures,Refinements to ba.com during the last 12 monthsinclude:• Enabling customers travelling to America toenter the Advance Passenger Information datarequired by the US authorities before arriving atthe airport;• Extending the availability of online boardingpasses to180 routes• Allowing customers to pay for tickets with creditcards billed in a country other than the originaldeparture point, and to book up to six sectors –for example, for round-the-world trips - in onetransaction.It’s About TimeTo deliver improved customer service the airlineacknowledges that it must also deliver betterpunctuality. ‘It’s about time’ is the name given to theairline’s drive on punctuality, introduced at the endof 2005. Significant focus is being placed on gettingeach day off to a good start. The ‘First Wave’ planstresses how vital it is that the first services of the dayleave on time to prevent knock-on delays disruptingthe later schedule.2005/06 Corporate Responsibility Report Page 2 of 6

IN-FLIGHT PRODUCT DEVELOPMENTBritish Airways offers one of the airline industry’smost extensive ranges of in-flight cabins across itslonghaul and shorthaul networks.2005 focusing on quality of service style andconsistency of delivery.It is one of only two international airlines to offer fourcabins on longhaul flights and remains firmlycommitted to providing an economy and businessclass cabin on its mainline shorthaul operation. Itmeans the airline can offer a quality service and valuefor money fares for all customers.Club WorldThe airline announced in November 2005 that itwould invest £100 million in its Club World cabin,centring on the introduction of a new generation lieflatseat to be rolled out across the longhaul fleetfrom the summer of 2006. British Airways was thefirst airline to introduce a completely flat bed inbusiness class in 2000.The Club World Sleeper Service was extended to theWashington-Heathrow route in 2005. The service isdesigned to allow customers to maximise the amountof sleep on shorter longhaul ‘red eye’ flights from theEast coast of the USA and the Middle East by givingthem the opportunity to eat before boarding theflight. The service is proving popular with customerswho are able to sleep for up to two hours longer thanon flights with a traditional meal service onboard.In-Flight EntertainmentThe airline announced plans in 2005 to carry out amajor upgrade of the airline’s in-flight entertainmentsystems in all longhaul cabins. The introduction of‘audio, visual on-demand’ means that customers canselect a programme, film or music channel and stopor pause as they wish during the flight, depending onwhether they want to rest, eat or work. The initiative,to be implemented from summer 2006, will givecustomers more choice and greater flexibility bygiving them control over what they watch and when.Premium AcademyA new training programme for our cabin crew, the‘Premium Academy’, was introduced in NovemberBA ConnectIn January 2006, British Airways announced the relaunchof its regional wholly owned subsidiary,British Airways CitiExpress, as BA Connect.The launch of BA Connect was in response tochanges to the UK regional market to Europe andhas proved successful with more than 500,000people booking with the airline between February 1,2006 and the end of March – higher than in anyprevious year.BA Connect offers customers: a single-class cabin onall aircraft; high quality, buy onboard, hot and coldcatering, and year-round, one-way fares from as littleas £25. There is also an enhanced product, ‘BAConnect Plus’, designed for business and frequentflyers, offering changeable tickets with lounge access.2005/06 Corporate Responsibility Report Page 3 of 6

ON THE GROUND PRODUCT DEVELOPMENTSCustomer RelationsWe have focused heavily during the last three yearson improving service and interaction with customerswho experience service failures.In dealing with complaints, the Customer RelationsTeam now aim to call customers when responding totheir enquiries rather than write. Customer researchshows that 41% of customers contacted by telephonerated Customer Relations’ handling of their enquiryas excellent, up nearly 10% from the previous year.Customers’ overall satisfaction levels with the way inwhich complaints were handled rose from 50% to65%. Satisfaction with staff professionalism hasalmost doubled in the last two years to 60%.Executive ClubBritish Airways’ customer loyalty and rewardprogramme, the Executive Club, has been runningfor 20 years.It is designed to recognise the airline’s most regularand valuable customers and rewards them by givingthem frequent-flyer points (BA Miles), priority checkin, access for Gold and Silver members to 250airport lounges worldwide, flight upgrades andspecial offers.During the last year, we have introduced a system bywhich we track Executive Club members’ recentjourneys and update customer service groundstaffand cabin crew before their next flight. For example,if a customer had been recently upgraded from Blueto Silver, a member of the Special Services teamwould greet them at the airport and show them to thelounge. If it was a customer’s first time travelling inClub World or First for some time, the cabin servicedirector would welcome them back when theyboarded their flight.Results from a trial of 1,000 Executive Clubmembers showed that satisfaction rose by 14%among those members who received this morepersonalised service.Customer satisfaction for the timeliness of responsesto complaints also increased significantly from 30%to 55%. In part, this reflected a rise in the proportionof responses sent by email this year – from 15% to25%.SMS alertsUnfortunately, from time to time flights aredisrupted. Following a successful trial, we introducedthis year an SMS messaging system to alertcustomers if their flight is delayed or cancelled.Customers who register their mobile phone numberon ba.com will receive a message to alert them to anychanges to their flight.BaggageSometimes luggage goes missing or does not travelon the same flight as its owner. We understand theinconvenience this causes its customers and haveimplemented a number of initiatives that helpcustomers track and recover their bag more easily.In North America, for example, a dedicated baggagehelpline has been set up so customers can accessspecific assistance rather than rely on airport generalcustomer service teams who may not be able to givebaggage inquiries consistent priority.LoungesIn July 2005, a new Molton Brown spa was opened inthe Terraces Lounge at New York’s JFK airport. Theairline now has a total of five spas in its internationaldeparture and arrivals lounges in HeathrowTerminals 1 and 4 as well as JFK.A major refurbishment of lounges in India took placein 2005, and an overhaul of lounges in Heathrow’sTerminals 1 and 4 was completed in March 2006.2005/06 Corporate Responsibility Report Page 4 of 6

Customer service improvements for India flightsBritish Airways has increased the number of flights itoperates between the UK and India from 19 perweek to 42, including the introduction of a new routebetween Heathrow and Bangalore.Service enhancements have included the formationof a ‘Special Services’ team who greet customers asthey enter the airport in Delhi, Mumbai, Bangalore,Chennai and Kolkata and help speed them fromcheck-in to the gate with greater ease. Dedicatedcheck-in areas with automated kiosks have beeninstalled and airport lounges refurbished.The airline has a team of Indian cabin crew whooperate on each flight between the UK and India.Improvements have been made to the food served inthe economy World Traveller cabin.HEALTHWe have reviewed the information and advice on airtravel and health we provide for customers on ourwebsite. The content has been simplified to make itclearer and more easily understood, with links torecommended external websites providing moredetail. Health information provided to passengersthrough onboard announcements, video and in-flightmagazines has also been reviewed.Deep Vein Thrombosis (DVT)In December 2005 the UK Department for Transportannounced the results of the World HealthOrganisation WRIGHT study, which examined therelationship between travel and Deep VeinThrombosis (DVT). The results were consistent withprevious studies in demonstrating that seatedimmobility is a risk factor for DVT in all forms oftransport. The studies confirm that the risk increaseswith duration of travel and is greater for those peoplewith other risk factors for DVT such as heart disease,family history of DVT, hormone treatment,pregnancy or recent major surgery. See www.ba.comAvian fluOver the past year the outbreak of avian flu causedby the H5N1 virus has spread beyond Asia, withinfected birds reported in many areas includingWestern Europe and Africa. As yet there has beenno indication that the virus can be transmitted readilyfrom human to human, but the threat of a humaninfluenza pandemic remains. A pandemic would beexpected to have a major impact on internationaltravel. We have a contingency planning group whichhas been working in partnership with local, nationaland international organisations.Heathrow capacityTo ensure Heathrow airport offers customers a globalnetwork of direct routes comparable with hubs inContinental Europe, BA strongly supports thesustainable development of the airport’s capacity.In 2005-2006 the Government and BAA plc havecontinued with preliminary studies related to theproposals of the 2003 Air Transport White Paper tobuild a third runway at Heathrow (subject to meetingenvironmental conditions) and to consult on full useof Heathrow’s existing runways. The Government iscommitted to producing a report on progress onimplementation of the White Paper by the end of2006.BA is actively contributing to these projects for thesustainable development of Heathrow by:- responding in detail to BAA’s consultation on adraft interim master plan for Heathrow, andsupporting proposals that protect local propertyvalues in areas potentially affected by Heathrow’sthird runway- participating in ‘Future Heathrow’, a broadlybasedcampaign embracing all the mainHeathrow trades unions, and local and nationalbusiness organisations seeking Heathrow’ssustainable modernisation and expansion- discussing with local authority representativesand regional organisations (including the SouthEast England Development Agency and theLondon Development Agency) the strategies forlocal and regional plans that would best secure2005/06 Corporate Responsibility Report Page 5 of 6

the potential benefits of Heathrow’s expansionfor these areas. There is a major opportunity forHeathrow’s growth to underpin areas of WestLondon that the London Plan is seeking toregenerate with the creation of many thousandsmore jobs.- promoting the case to reduce flight delays whenHeathrow’s runway capacity is increased, as thiswould cut emissions and noise from aircraft thatwould otherwise be held on the ground beforetake-off and in a stack before landing.We will continue fully to support the implementationof the Government’s policies for the sustainabledevelopment of Heathrow, for the unique benefits itcan offer customers as the UK’s global hub.RECENT DEVELOPMENTSAlong with other carriers, we are currently assistingthe Office of Fair Trading (OFT) and the UnitedStates Department of Justice (DOJ) with aninvestigation into alleged cartel activity in relation topassenger air transportation pricing including fuelsurcharges. Our policy is to conduct our business infull compliance with all applicable competition lawsand while the investigation continues, we arecontinuing with business as usual.SUPPLIERSEthical procurementIn February 2006 we tested an ethical procurementsurvey on our 50 main suppliers, covering health,safety, environment, diversity and labour standardsas well as business continuity planning. We are nowworking to interpret the findings and to develop astrategy for improving standards where they may benecessary.Payment performanceWe implemented a number of initiatives this year inorder to improve our level of supplier paymentperformance to our target of 90% (67% on timepayment in 2004-05). As a result our on timepayment has increased to 78% worldwide in March2006 (with 80% on time payment in the UK).Initiatives are in hand to improve performancefurther in 2006-2007.highlights key risk criteria against critical suppliers.The risks are monitored on a monthly basis allowingus time to mitigate the level of risk to our operationsand forms part of the corporate risk governanceprocess.Terminal 5T5 provides our suppliers with opportunities toinnovate processes and develop strategies to delivergood customer service. T5 is subject to specificenvironmental planning conditions, supplemented byjoint BA and BAA initiatives to which each suppliermust commit. These initiatives include reducingemissions by the procurement of new vehicles andequipment and reducing supplier journeys into theT5 site.Supplier performanceAugust 2005 saw disruption to our worldwide flightoperation following industrial action at primaryHeathrow caterer, Gate Gourmet. This disputeresulted in some of our aircraft not being fullycatered for a considerable period. Our ProcurementDepartment was at the forefront of suppliernegotiations to facilitate amicable agreementbetween all parties and to instigate contingency plansto minimise customer inconvenience during thedisruption. The Procurement Department has nowdeveloped a supplier risk log, which proactively2005/06 Corporate Responsibility Report Page 6 of 6