The cost-cutting frenzy that has engulfed British Airways has now spread to its PR spend with the airline cutting global comms budgets by one fifth.
PRWeek has learned that BA is poised to appoint Fleishman-Hillard to handle its global PR business. Cohn & Wolfe has overseen the Northern Europe account for the past decade, but loses out as a result of BA's determination to bring down its £2m PR spend.
Earlier this week, BA cabin-crew workers overwhelmingly rejected a slew of cost-cutting proposals, raising the spectre of a crippling summer strike.
Meanwhile 800 of the airline's staffers have committed to work without pay this month.
'In some senses it is asking agencies to give up a month's pay as well,' said a source involved in the PR review, adding that BA had asked agencies to reduce the current £2m PR budget by at least 20 per cent.
Cohn & Wolfe regional director Mark Cater said: 'BA's desire to significantly drive down costs means we are no longer able to match its requirements without impacting our high quality service.'
BA called the review earlier this year (prweek.com, 1 May). The airline is believed to be in final negotiations with F-H to handle the account covering Europe, the Middle East and Asia-Pacific, but not the UK and the US.
In addition to Cohn & Wolfe, the pitch included Pacific region incumbent Grayling and MS&L.
BA PR manager Anne Morton said: 'Cost is obviously a key factor in our selection criteria, but quality of service, media relations skills and the ability to cover our extensive global network are equally important.'
The review follows a consolidation of BA's global comms structure into one geographic region, headed by PR manager Anne Morton.
At its peak three years ago the business was understood to be worth £3m.
TOUGH TIMES AT BA
July 2009: Seven thousand employees apply for voluntary pay cuts, with 800 working for a month without pay
May 2009: Posts a pre-tax loss of £401m, its biggest loss since its 1987 privatisation
December 2008: BA seeks a merger with Australian carrier Qantas, after earlier talks with American Airlines and Iberia
November 2008: BA moves its consumer PR in-house, out of Porter Novelli.