Arun Sudhaman

Posted to the Holmes Report here

British Airways and Fleishman-Hillard are to part ways barely one year after the airline handed its £1.5 million international PR business to the agency.

The split, the Holmes Report has learned, means that BA is now seeking agencies to handle the account, which covers Europe, the Middle East, Asia-Pacific and Africa.

F-H initially won the business following a pitch that ousted incumbents such as Cohn & Wolfe (Northern Europe) and Grayling (Asia-Pacific).

At the time, pitching agencies criticised BA’s determination to drive down fees – it is understood that the airline asked for a reduction of 20 percent on the £2 million PR budget it had assigned for the 58 markets under review. At its peak in 2006, it is believed that the account was worth £3 million.

The development follows an annual review of the contract, which began in October 2009, and will now end in late March 2011.

“The contract was reviewed after one year and British Airways and Fleishman-Hillard came to a mutual decision to end the contract for these regions,” said BA PR executive Tehreem Ashraf.

Ashraf added that BA is currently “researching PR agencies” before issuing an RFP. “We will appoint the agency who is best suited to the role,” said Ashraf. “Either it be a single agency or multiple agencies.”

Ashraf declined to comment on the reason behind the split, saying that “contractual matters remain confidential.”

According to an internal F-H email, the separation is “amicable and a result of market changes and developments over the life of the contract.”

The email added that BA may request F-H or affiliate agencies in certain markets to extend their remit for an additional two months, in case the airline “hasn’t found a satisfactory solution” by that point.

The contract does not cover BA’s PR activity in the UK or the US.