E-Commerce Initiative Sparks British Airways Layoffs

With an eye toward selling half of its air travel tickets online by 2003, British Airways has announced that it will cut 6,500 jobs over that three-year span.

Reportedly, the cuts are geared toward streamlining the operation, slashing costs and downsizing the business to jumpstart a sagging bottom line. The layoffs will shrink the current workforce by 12 percent, and the company is reserving comment on the possibility of further measures.

Industry analysts point to BA’s plan to continually develop its online business as a motivation for it to trim its large back-office personnel pool. The strategy would reduce labor costs and add revenues by concurrently increasing ease and convenience for customers to do business online.

Deal With IBM

British Airways’ e-commerce initiative will utilize IBM technology to provide e-commerce services via PCs, wireless devices and television.

The airline currently sells only about one percent of its tickets online, but hopes to increase that figure soon by introducing a program that will allow inbound UK passengers to book online travel packages with British Airways Holidays.

Ultimately, British Airways intends to offer passengers the ability to book flights directly through their television sets. Highly valued regular customers will have information on their specific flights sent to them through their mobile phones.

Arrivals and Departures

IBM will also facilitate British Airways’ capacity to accommodate more visitors who will be able to constantly check flight arrival and departure information.

“Electronic commerce is fast becoming a critical and integral part of British Airways’ commercial strategy,” said Pat Gaffey, head of BA’s global distribution unit. “This new infrastructure, developed in conjunction with IBM, will help ensure our ability to meet changing customer needs.”

IBM Fosters the Wireless Revolution

Meanwhile, other airlines are readying themselves for the impending consumer shift to wireless e-commerce, often with the help of IBM. IBM had previously announced a partnership with Delta Airlines to provide WAP technology.

Last month, IBM announced a working relationship with Swissair, an alliance that will allow passengers to check in from Web-enabled mobile phones. The service, initially available in Zurich for selected frequent flyers, is the first of its kind.

Passengers who have booked a flight can receive all the information that would normally appear on a boarding pass, including departure time, gate and seat number, and automatic updates of time or gate changes.

Airline companies are rapidly becoming the trendsetters for the incorporation of wireless e-commerce into lifestyle routines. IBM’s “pervasive computing” initiative calls for users to be able to access Internet services on various devices, including cell phones, personal digital assistants and other electronic devices.