The Business Studies Lessons from Terminal 5

Rarely can there have been a business news story that provides such a rich source of business studies content.

The disastrous opening of BA’s new Terminal 5 has been superbly covered by the print and television media, creating a wealth of that resources can be accessed where relevant.

I spent a few minutes jotting down some possible applications for our business students, and would welcome your suggestions too (submit them using the comments box below):

Finance

- Cost of cancelled flights and customer refunds & allowances

Economics

- How the local Heathrow hotels suddenly increased their prices to around £225 per person when faced with the significant increase in demand from BA customers who needed overnight accommodation

Marketing:

- Failed product launches: on the morning of Day One, Walsh was smiling, welcoming the first passengers to his wonderful new terminal. The website assured readers that Terminal 5’s baggage-handling system ‘will move your bags through the airport faster than you can move yourself’.

- Customer service - very little customer communication on Day One as the problems emerged; distressed travellers paid inflated prices for emergency overnight hotels.

Strategic planning:

- Contingency planning - sparse manning, insufficient dry runs, failure to test properly the new systems and lack of contingency planning by BAA, owner of the airport, and BA were exposed.

People management:

Lack of training - one BA baggage handler said there had been only four ‘familiarisation days’ before Terminal 5 - a small city in scale - went live.