The death this month of former British Airways head Lord Marshall triggered eulogies to the man who oversaw BA’s transition from state-owned flag carrier to private airline.
Colin Marshall led BA as chief executive or chairman for more than two decades from 1983 to 2004. For a period, 1993-96, he even combined the roles – somewhat controversially since this was in breach of the Cadbury Report recommendations on corporate governance since adopted by the EU and World Bank.
However, Marshall’s career in the travel industry extended beyond BA. As a teenager, he worked as a cadet purser aboard UK shipping firm Orient Line, long since absorbed by P&O.
In 1958 he joined car-rental company Hertz as a management trainee and rose through the ranks, working in Mexico, the UK, the Netherlands and Belgium before moving to rival Avis where he was chief executive from 1976 to 1979.
Later, after leaving BA, Marshall chaired tourism promotion body VisitBritain. He was president of the Confederation of British Employers (CBI) in the 1990s and chaired a Britain in Europe group which promoted UK membership of the eurozone.
Marshall certainly left his mark on BA. The New York Times noted a joke at the time Marshall took over in 1983 was that BA stood for “bloody awful”.
Twenty years later the Daily Mail described the relationship between Marshall and BA chairman Lord King, who recruited him, as “that of father and son”.
King made the cuts and knocked the airline into financial shape, slashing the workforce, cutting unprofitable routes, modernising the fleet. Marshall inculcated a customer service ethic through a programme christened “Putting People First”.
He later recalled being impressed on a first visit to Chicago by the unlimited coffee on offer in a local diner. “This was rocket science in terms of customer service” compared with Britain in the 1950s, he said.
Marshall transformed BA’s image, presiding over adoption of the tagline “the world’s favourite airline”, and when BA was privatised in 1987 he received a knighthood. He became Lord Marshall in 1998.
But in between these official honours something else happened. BA paid out what, at the time, was a colossal sum in damages.
The obituaries almost all skated over this episode during Marshall’s time. The Financial Times (July 9) referred to it this way: “Marshall was unscathed by the so-called ‘dirty tricks campaign’ against Richard Branson’s rival carrier Virgin Atlantic.”
This is true up to a point, but with due respect to Lord Marshall and those who knew him, it is not the whole truth.
Marshall survived the dirty tricks affair chiefly by emerging triumphant from the bitter boardroom battle which followed. His chairman Lord King took the blow to his reputation.
The facts can be briefly stated. In January 1993, a High Court case in which Richard Branson accused BA of dirty tricks against his airline ended in humiliation for BA.
BA admitted “disreputable business practices”, issued a public apology to Branson and paid £610,000 in damages. It forked-out a further (estimated) £4.5 million in legal costs.
In essence, unnamed BA staff had tapped into Virgin Atlantic’s computer records to access confidential passenger data and then used the information to contact passengers and offer free flights and upgrades if they switched airlines.
Counsel for BA insisted: “The directors of BA were not party to any concerted campaign” against Branson or Virgin.
BA blamed “a small number of employees” whom it did not identify. However, a 1993 board meeting noted there was “very slight evidence” against anyone other than senior staff.
Marshall assured a subsequent shareholders’ meeting: “I did not direct, authorise or implement any improper activities against Virgin or its chairman. I did not know about them at the time they occurred.”
BA published no details of disciplinary action against those who participated in the practices and later conceded no one had been sacked or disciplined.
Behind the scenes the board split into opposing camps: one behind King, the other Marshall – with the latter backed by then head of operations and marketing Robert Ayling (soon to become BA managing director and, later, chief executive).
The outcome was that King resigned, having planned to step down anyway in June 1993. Marshall survived not only as chief executive but took over as chairman with Ayling as his MD, before he passed the chief executive role to his understudy in 1996.
At the time, the press was rather less sympathetic to Marshall (and King) than of late. The Independent reported: “Marshall at centre of storm … after humiliating public apology.”
The Times noted “a bullying subculture [at BA] that endorses almost any tactic to harm a competitor”. Times columnist Bernard Levin wrote: “Lord King presided over an enterprise that would have had the mafia saluting, while his fetcher and carrier, Sir Colin Marshall, trotted behind him.”
An account of the affair, a book entitled Dirty Tricks by Martyn Gregory, published in 1994, notes that analysis of the information BA obtained from tapping into its rival’s computer records was sent to Marshall’s office.
It concludes Marshall was responsible for “financing and sanctioning” three key aspects of the “disreputable practices”: the work of private PR consultant Brian Basham and a report code-named Barbara which Basham presented to Marshall; the establishment of a security operation code-named Covent Garden (which led to allegations of investigators stealing journalists’ rubbish); and the use of private detective agency Kroll Associates.
Kroll was involved in a separate operation on behalf of BA directed at charter carrier Air Europe and its owner Harry Goodman. The carrier, part of Goodman’s International Leisure Group, failed in 1991.
Supporters of King also suggested management consultant Michael Levin, seen as Marshall’s right-hand man until his death in 1989, was behind some early moves against Virgin.
It was Levin, according to Gregory, who urged Marshall to gather “any information, indicators and significant intelligence” about Virgin Atlantic, on the grounds that: “We cannot become complacent about the potential problems an airline such as Virgin Atlantic can cause.”
Thankfully those days are long behind BA, whose reputation under Rod Eddington, Willie Walsh and Keith Williams has been restored. But that is no cause for historical whitewash.
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