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The time to act is today

For many businesses in the COVID era, saving costs is a necessity to survival, says Jonny Michael, CEO, JMCL Consulting Limited.

Jonny Michael, CEO, JMCL Consulting Limited
Jonny Michael JMCL

Jonny Michael, CEO, JMCL Consulting

Making big changes for operational effectiveness and efficiency is never easy. It is even less easy when times are good and motivation to be disruptive is low. However, that’s not the situation we find ourselves in and is far easier and necessary to make changes – justified to ensure survival and future profitability – when times are difficult and everyone is conditioned to expect bad news.

The time to take unpalatable action is upon us – the environment is conditioned and there is so much noise that additional bad news will get lost in the maelstrom.

The crisis is the travel industry is a one-off opportunity for BA to act, however deplorable the action might seem…”

British Airways have been struggling with low cost competition for years now in part as a result of their legacy of public ownership. Huw Merriman, the Conservative MP who chairs the Transport Select Committee claimed British Airways was “using this pandemic as a justification to slash jobs and employment terms,” saying, “BA have tried this before but its workforce resisted.”

The crisis is the travel industry is a one-off opportunity for BA to act and however deplorable the action might seem it is interesting that so far it is only the pilots union which is entering into negotiations with BA when over 12,000 (which includes one quarter of the pilots) of the 45,000 jobs at BA are under threat. The workforce has resisted historic moves because the nature of previous disruptions has not been as painful as the current.

The nature of change in our sector has established many local baronies within consolidated groups of agents. There are many good reasons for this however in accommodating this localised power, in the name of being entrepreneurial, erodes many of the benefits of scale; benefits such as driving the benefits from professional procurement leveraging buying power and clever use of technology to improve conversion rates or reduce administration to the minimum.

A simple action which you can take today is to expose all of your third party costs to scrutiny.”

A simple action which you can take today is to expose all of your third party costs to scrutiny by experienced procurement people who live and breathe the supply markets you are sourcing from and seizing the day to implement identified opportunities however, difficult or unpalatable that change may be.

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www.jmclconsulting.com

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