Objectives Of British Airways Essays About Education

Analysis of Pricing and Distribution Strategy at British Airways

rodrigo | December 20, 2012

WritePass - Essay Writing - Dissertation Topics [TOC]

Introduction

British Airways is the flagship airline carrier for United Kingdom, formed in 1974. With significant presence at Heathrow, Gatwick and London City with over 20 million people living within commuting distance.

BA has a fleet of more than 238 aircrafts in service as of March 2010 and flies to 41 different destinations in America, 9 in the UK, 67 in Europe, 16 in the Middle-East and South-Asia and 7 in the Asia Pacific region, carrying around 32 million passengers between 2009 and 2010 as well as operating a large air cargo business alongside.

BA, American Airlines, Cathay Pacific and Qantas form the Oneworld airline alliance which is now the third largest airline alliance group.

In 2011 BA merged with Iberia forming IAG with 408 aircrafts flying to 200 destinations and carrying 55 million passengers and allowing the two companies to enhance their presence in the market whilst retaining their own brands and allowing their customers to benefit from a larger network of travel (http://www.iairgroup.com/ 2011).

Company’s outlook

British Airways sees itself as a vital link for trade and investment, specialising in short to medium length international journeys which has seen revenue of £8 billion in 2009/10. This figure is down 11% on the previous year due mainly to price of fuel and the recession. BA’s main activity revolves around passenger travel which accounts for 87% of 2009/10 revenue, supposed to 7% from cargo and 6% from other means. The acquisition of Iberia in 2011 has allowed BA to increase its capabilities in the cargo market and diversify their operations. Both companies float on the Spanish and UK stock markets as one under IAG, which floated in late January 2011 at 282p a share; this has dropped to a price of 224.3p per share as of 4th April 2011. The future for British Airways and IAG will be largely affected by its ability to weather the downturn, but with its promise of drastic expansion and a strong market share within the European market (3rd biggest by revenue) (www.bbc.co.uk/news 2011)

Pricing Strategy

British Airways prices its products in a way that allows consumers to decide the level of services they want. For example return flight to New York, purchased online is £376 in economy yet consumers pay a huge increase to £2728 for the same flight, (www.britishairways.com 2011) but in first class.

BA’s premium and medium strategies offers superior quality for greater price allowing the airline to compete with other quality airlines such as Virgin and American Airlines, and base price on customer valuations – The price “is set higher than others to reflect better product quality and exclusivity.” (Brassington and Petitt, 2003: 1106). However in recent years the arrival of low cost carriers and economic turmoil forced BA into providing a low cost formula to remain competitive. The first step towards this was in generating ancillary revenues by introducing a fee per one way flight for passengers booking a seat in advance for all seats except first class. (GMID 2011) Even in the low cost formula, BA are still upholding their image of quality and good customer service as unlike the low cost carriers, where ancillary revenues are the money makers with food, drink and priority boarding all costing extra, BA still provide some level of on board service in the cost of their product.

Despite the introduction of a low cost formula, British Airways generally bases prices on perceived value of its brand, and aims to deliver product quality leadership strategy. (www.britishairways.com 2011) The executive club encourages loyalty to the airline and rewards consumers with double airmiles, priority boarding, additional baggage allowance and access to the BA lounge as well as giving the appearance of high quality and good value.

However BA recently lowered the price of their business class ticket due to the recession. It has been recognised the company has had to reduce the price of its business class tickets, to remain competitive alongside such competition as Virgin, who have helped battle down the price, along with it’s cliental that have become less willing to pay higher prices during economic hardship. This has help attract more customers, smaller businesses in particular, who are able to do deals and meet contacts around the world. (Times Online 2011). An excellent strategy that has allowed BA to get away from just large organisations and into the smaller/medium sized business market (GMID 2011) is their Face to Face campaign which, on submittance of a business plan, small/medium sized businesses can apply for free business travel.

The marginal cost of one more passenger is relatively small, as the majority of costs are largely in fixed costs of running the flight (cost of aircraft, fuel, airport duties etc.). According to Chris Tarry, transport analyst for Commerzbank Securities, BA’s selling cost per passenger in March 2002 was just 10.9% of its average ticket price (http://www.insights.org.uk 2011). This allows BA to sell tickets at lower rates when demand is less and higher rates during peak season. For example an economy class ticket to New York would normally be £376 return but almost doubles over the peak bank holiday period of the Royal Wedding at £616 (www.britishairways.com 2011). The airline aims to get as many people on the plane as possible, even at a lower price, and make some profit, than the plane taking of near empty and making a loss.

Distribution Strategy

British Airways tickets are available to purchase from travel agents physical locations and online via their websites, and through BA’s dedicated website, travel shops and reservations staff. With e-commerce radically changing distribution strategies (Solomon et al, 2009), BA and various other airlines are trying to reduce costs to ensure they continue to effectively compete against other players within the airline industry and still provide each customer with their superior service by eliminating their use of various ‘traditional intermediaries’ (Solomon et al, 2009) within their distribution channels.

Globally 20% of British Airways tickets are now sold via ba.com, with 54% of these online bookings accounting for their total short haul sales stated by docstoc (2010). It’s recognised from these statistics that the convenience of purchasing airline tickets online is attractive, due to the ability to securely acquire a flight ticket without leaving the comforts of your own home, as well as that purchasing tickets direct from BA.com is significantly cheaper than leading travel agents, for example an economy class ticket flying from London to New York can be purchased for £368 straight from BA where as Expedia offer the same flight for a staggering £432.10. However, there is still an area of the market who enjoy purchasing their airline tickets from travel agents physical locations, this is due to travel agencies providing the customer with the same options as to the airline website itself, in such areas as seat preferences, along with the additional personalised service which the customer is able to discuss the range of options available to them when booking all areas of their holiday, be their hotel or hire car. An attempt to create a more direct distribution channel process, BA also provides the recognised ‘travel agent’ service options to its customers, through offering a range of hotels, car rental and various other holiday package choices.

The various options available to consumers when purchasing BA airline tickets are either through travel agents, or alternatively buy their ticket straight from the BA website, travel shops and reservations staff. It’s seen that prices do vary depending on where tickets are purchased, for instance if a consumer were to purchase their ticket directly from BA’s website, they would commonly pay a lower price, due to the direct business to customer distribution channel, eliminating the need for BA to pay commission to travel agents which is ‘traditionally between 8% and 10% of the ticket price’ (tourism insights, 2002) and for the use of Global Distribution Systems (GDS). GDS is used by airlines to sell flights, through connecting both the airline and the travel agents to sell the tickets. Airlines pay GDS to connect them to travel websites and travel agents to enable their flights to be sold via these organisations, GDS segment fees average at around ‘$10 to $12 per booking’ (tourism insights, 2002). With BA’s distribution costs accounting for 16%-17% of the cost of selling each ticket, no wonder they want to reduce distribution channels to help become more competitive in the growing low fare airline industry, especially due to the ‘travel and tourism industry fast becoming the biggest growth industry in e-commerce payments,’ (docstoc, 2010).

Evaluation

Overall it is clear that British Airways are aiming for a much more direct distribution channel. They are investing huge amounts of money in improving their online services to try to encourage people to buy online rather than at the extra cost of the middle man travel agent. This also allows the airline to gain vital information about their consumers and their wants and needs, allowing the company to differentiate and target their services appropriately. This will ensure they enhance their competitive market position, through enabling them to provide special offers to different customers, for example in the form of special discounts, special seats with more leg room and passes for their lounges, allowing them to build better relationships with their customers.  The high growth in e-commerce selling in the travel and tourism market is further proof of how important it is for BA to perfect this particular method of distribution. The lower costs from eliminating a middle man, including both online and shop based agents will also allow the firm to appear more competitive in comparison to low cost carriers (LCCs).

The introduction of ancillary products and reduction in price of business class tickets has been key in promoting the price competitiveness of the airline alongside the strong brand image of quality and reliability. The low marginal cost of an extra passenger also gives the airline the ability to lower costs depending on the demand for their product at the time of year; this means that BA can offer their business clients lower prices when it is not peak season such as school holidays.

Conclusion and Recommendations

By providing more ancillary goods and a reduced cost of the seat, BA will give consumers the options of what they want and become more competitive with the LCC’s, who are extremely popular for short haul flights. For example providing the option to charge extra for food and drink or extra baggage on short haul flights as well as an all inclusive option.

Many of the LCC’s only distribute tickets online. To uphold BA’s strong brand image it’s important for them to stay accessible through other distribution systems as many of their more wealthier cliental who spend the most via business and first class tickets, may desire a travel agent. By marketing their online travel agent services they may be able to increase their current 20% online distribution. This will provide a more direct channel to their customers allowing them to market events such as the BA January sale, flights to cheaper destinations and cheaper times to fly that consumers may otherwise be unaware of.

Marketing the executive club more effectively to new customers and ensuring that by being a member, consumers actually receive some benefits, they’re likely to remain loyal and recommend the airline.

BA could also improve their services by providing questionnaires to passengers. For example, on long haul flights when consumers are more likely to fill them in, and providing a reward – such as a draw for a bottle of champagne. By doing this the company will be able to find out if consumers choose them for their prices, customer service, quality or the routes that they operate under and use this to market the company accordingly.

It is clearly important for BA to remain competitive with the LCCs by providing an alternative to the high quality and high price product they currently provide but still keeping their high quality image and providing a service that current, loyal customers expect. Effective online distribution and optional ancillary products are key in achieving this alongside accurate customer research from current and potential consumers. The airline should continue to use their low marginal costs to their advantage when promoting the airline to businesses and off peak travellers.

References

Balmer, J.M.T, Stuart, H & Greyser, A.S (2009) Aligning Identity and Strategy: Corporate Branding at British Airways in the Late 20th Century, CALIFORNIA MANAGEMENT REVIEW VOL. 51, NO. 3

BBC News: http://www.bbc.co.uk/news/business-12265332 [Accessed 4th April 2011]

Brassington, F, & Pettitt, S (2000), (2nd Edition) ‘Principles of Marketing’ Harlow, Prentice Hall

British Airways (2011) www.britishairways.com [accessed 19th March 2011]

British Airways (2011) Buy Travel [Online] http://www.britishairways.com/travel/fx/public/en_gb?eId=111011&timestamp=0315023921 [Accessed 15th March 2011]

Docstoc (2010) Visa Case study: British Airways come buy with me –worldwide airline offers worldwide online protection [Online] http://www.docstoc.com/docs/26949398/britishairways [Accessed: 6th March 2011]

Expedia (2011) Flights [Online] http://www.expedia.co.uk/pub/agent.dll [Accessed 15th March 2011]

GMID http://www.portal.euromonitor.com.chain.kent.ac.uk/Portal/ResultsList.aspx [Accessed 7th March 2011]

Insights (2011) http://www.insights.org.uk/articleitem.aspx?title=The+Changing+Face+of+Airline+Distribution [Accessed 20th March 2011]

International Airlines Group (2010)

http://www.iairgroup.com/  [Accessed 4th April 2011]

Solomon, Marshall, Stuart, Barnes & Mitchell (2009) Marketing: Real People, Real Decisions. Essex, Pearson Education Limited.

Times Online (2011) http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article5477962.ece [Accessed 17th March 2011]

Tourism insights (2002) The Changing Face of Airline Distribution [Online] http://www.insights.org.uk/articleitem.aspx?title=The+Changing+Face+of+Airline+Distribution [Accessed: 6th March 2011]

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British Airways


1. Introduction:

British Airways is the UK's largest international scheduled airline, flying to 148 destinations at convenient times, to the best located airports. Its principal place of business is Heathrow, one of the world's premier airport locations, which serves a large geographical area with a comparatively high proportion of point-to-point business. It also operates a worldwide air cargo business, largely in conjunction with its scheduled passenger services. BA airline network generates economic value by meeting the demand for business travel, by offering vital arteries for trade and investment, as well as providing leisure travel earned nearly �9 billion in revenue, up 2.7per cent on the previous year. It carried 777,000 tonnes of cargo to destinations in Europe, the America and throughout the world. At the end of March 2009 it had 245 aircraft in service. British Airways won numbers of awards including the Skytrax Best Transatlantic Airline in 2008 and 2009.

1.1 The Global Airline Industry:

British Airways is a full service global airline, offering a year round low fares with extensive global route network flying to and from centrally located airports. British Airways has launched Face to Face , a multi phased program that aims to keep entrepreneurship alive and kick up fresh potential for economic growth in the U.S.by focusing on tangible, human connections as a crucial of business growth.

British Airways is worth �1.6 billion in stock market value as of 2009. Forecasts to reach a value of $368.2billion in 2009, an increase of 25% from 2004. Market volume of 2.3 billion passengers was in 2004 and it will reach 3 billion passengers in the end of 2009.it will the increase of 32.7% from 2004.

1.2 Regulatory bodies of British Airways:

There are two bodies responsible for civil aviation in the United Kingdom. The Department of Transport and the Civil Aviation Authority.British Airways is involved with the aviation regulatory bodies, aircraft manufacturers and system designers to develop minimum performance standards for aircraft protection. The key areas are:

  • Hand operated portable fire extinguishers


  • Aircraft Engines


  • Aircraft Cargoholds


  • Aircraft Potty Bottles for waste bins

EU (DG XII) funded Fire Detection and Suppression Simulator model (FIREDASS).


2. Organisation structure:

The organisational structure of a company reflects its culture, its management style and its leader attitude in addition to the environment in which it has to operate. British Airways has a more formalised structure with precise rules and procedures, due to its size and the global scope of its activity. A major change in the last years has been the reduction of its management layers, between the chief executive and the front line who interface with customers, from nine to five. It now has small ad hoc groups working in parallel with the formal structure, with responsibilities that cut across different functions, or in some case duplicated these functions.

2.1 British Airways' Structure:

British Airways could be easily defined as a role culture reflecting functional differentiation in its structure, but it's not that easy. One organisation often harbours two or more contrasting cultures, posing more difficulties in order to remain successful. There are two cultures in British Airways, one high in the sky at 30,000 feet which is highly co-operative, service oriented focused on passengers and the other one on the ground highly competitive, politicised head-to-head with the external world, where it seems that fiercely adversarial values reigned. Middle management, which is key to the implementation of any strategy and the outcome of cultural change, is still ruled by separate functions and at the top all the weight still goes on the individualist functions of high finance and take-over. There is still some job to be done.

2.3 Management style and leadership at British Airways

The traditional style at BA had been bureaucratic, distancing, highly segmented between functions and characterised by low personal feedback, neglect of subordinates, depersonalisation and hierarchy. It has changed to a style where coaching, training and supporting are key to employees empowerment. Manager learn how to trust employees developing a vision and then letting employees use judgement and discretion while responsibility remains with them . Managers are shown how to build a support system, so that they can get help from one another outside the formal structure and across functions. Subordinates need to be shown how their job contribute to the larger whole. People are asked to make decisions, they are provide with a vision or framework in which they are then empowered to take action to respond to non standard situations. Mistakes are forgivable provided one tries.

Restructuring Management:

Compete 2012 is a long-term change programme, current market conditions have made it imperative to move fast to create a leaner, more agile structure starting at the very top of its business.

In December 2008, a third of its managers left the business under a voluntary severance scheme. At the same time ba redesigned the organisation to promote greater customer focus and better governance and leadership.

2.4 Leadership Development:

BA needs great leaders to help the company contend with current trading conditions and achieve its long-term vision. A leading global premium airline must be bold and highly effective in developing present and potential leaders.

This is why BA introduced High Performance Leadership (HPL) system during the year. This is an integrated system, linking business strategy, objective setting, performance assessment, development and reward. Focused initially on the senior leaders, HPL has rigorous assessment mechanisms to identify talented leaders and to provide with the right tools and support to continue developing.

BA have also defined, communicated and begun to measure individual performance against three capabilities , think need in its leaders, in addition to operational excellence:

  • Communicating a common vision;

  • Agreeing accountabilities; and

  • Motivating and inspiring others.

For each capability, specific behaviours have been developed so that leaders understand exactly what is expected of them and supporting them with a range of development programmes, including executive coaching, networks, forums and external courses. BA is also using new techniques to measure performance. These will allow management to monitor individual progress and track its own overall success at managing talent.

Among the other leadership initiatives BA launched were:

Behaviours for Success - a leadership development programme for the HPL community, focusing on understanding and developing personal leadership performance;

Leadership Matters - a scheme to identify and develop leaders who have pivotal roles in the Customer and Operations areas of our business; and

A Leadership Development Portfolio that will be introduced with the aim of supporting current and potential leaders at every level of the business, including emerging leaders, those on a fast track to senior positions and those with strategic roles at the very top of BA's organisation.


3. British Airways business Process:

The global airline industry is fiercely competitive, heavily regulated and highly exposed to changes in customer behaviour and consumer confidence. The current economic environment presents a new challenge. BA is concentrateing efforts to seize long-term opportunities

for growth. The pace of economic slowdown during the year was faster than most had predicted. What had first been expected to be a downturn in key developed economies turned into a global recession in the autumn of 2008. With record oil and commodity prices, sterling collapse and an unprecedented financial crisis all striking at once, even those emerging economies that had been expected to go untouched by recession saw sharp declines in growth.

Government attempts - nationally and internationally - to halt the financial crisis through bank bailouts and credit guarantees staved off what might have been an even more serious collapse. Subsequent efforts to stimulate economic activity are expected by most economists to take longer to take effect.

It is hoped that these steps will kick-start the US and UK economies which will provide some economic growth in 2010. This should, in turn, provide some basis for a recovery in BA's business.

3.1 Business ethics of British Airways:

This Code of Business Ethics applies to all employees, officers and directors of British Airways Plc and its subsidiary companies.

� Conflicts of Interest

A "conflict of interest" occurs when an individual's private interest interferes or appears to interfere with the interests of the Company. As a matter of Company policy, employees must not leave conflicts of interest unresolved unless approved by the Company. In particular, employees must never use or attempt to use their position at the Company to obtain any improper personal benefit for themselves, for their families, or for any other person.

� Misuse of Opportunities and Information

Employees owe a duty to the Company to advance the Company's business interests when appropriate. Employees are prohibited from taking (or directing to a third party) a business opportunity that is discovered through the use of corporate property, information or position, unless the Company has already been offered the opportunity and turned it down. More generally, employees are prohibited from using corporate property, information or position for personal gain and from competing with the Company.

� Confidentiality

In carrying out the Company's business, employees often learn confidential or proprietary information about the Company, its customers, suppliers, or joint venture parties. Employees must maintain the confidentiality of all information so entrusted to them, except when disclosure is authorised or legally mandated.

� Fair Dealing

company do not seek competitive advantages through illegal or unethical business practices. Each employee should endeavour to deal fairly with the Company's customers, service providers, suppliers, competitors and employees. No employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any unfair dealing practice.

� Protection and Proper Use of Company Assets

All employees should protect the Company's assets and ensure their efficient use. All Company assets should be used only for legitimate business purposes.

� Compliance with Laws, Rules and Regulations

It is the Company's policy to comply with all applicable laws, rules and regulations. It is the personal responsibility of each employee to adhere to the standards and restrictions imposed by those laws, rules and regulations. Securities Laws and Insider Dealing. Generally, it is both illegal and against Company policy for any individual to profit from undisclosed information relating to the Company or any other company. It is against Company policy for any employee, officer or director, who may have inside or unpublished knowledge about any of its customers or any other company, to purchase or sell the securities of those companies.

� Compliance Standards

The Company Secretary is responsible for applying these policies to specific situations in which questions may arise and has the authority to interpret these policies in any particular situation. Any questions relating to how these policies should be interpreted or applied should be addressed to the Company Secretary. An employee who is unsure of whether a situation violates this Code should discuss the situation with the Company Secretary to prevent possible misunderstandings and embarrassment at a later date. Any employee who becomes aware of any existing or potential violation of laws, rules, regulations or this Code is required to notify the matter in accordance with the procedure set out in British Airways Standing Instruction No. 2.

� Waivers of this Code

From time to time, the Company may waive some provisions of this Code. Any employee, officer or director who believes that a waiver may be called for should contact the Company Secretary. .

4. British Airways's Strategy and Objectives:

Progress against Business Plan

BP11

The rolling three-year business plan, BP11, set out agenda for 2008/09. Its main aims were to build on Terminal 5's strengths to upgrade the customer experience, continue to make the business more cost effective, grow its operations and make corporate responsibility a prominent part of BA's business. Record fuel prices and the global downturn meant it needed to revise its plans and reset priorities. Nevertheless, BA have still made significant progress against its original goals, laying the foundations for future success.

An upgraded customer experience

Terminal 5 has transformed its operational performance and customer service. We have exceeded punctuality and baggage targets across the network, achieving record customer satisfaction scores.

Competitive cost base

With record fuel prices to contend with during the year BA redoubled efforts to control costs. Terminal 5 has allowed to cut the cost of its Heathrow operations by more than expected. By the end of March 2009, our overall Heathrow manpower levels had reduced by 1,074 MPE, 14 per cent lower than the peak resource level during the first month of Terminal 5 operations.

A plan for growth

Despite the downturn, we have continued to grow where it makes economic sense and meets the needs of our customers. We launched new routes from London to Hyderabad and St Kitts.

Corporate responsibility

While recession is the overriding concern for most customers, the environment and corporate responsibility remain very important issues to them. It is clear from research that those companies with clear and open commitment to behave responsibly and to manage their environmental impact have a far greater chance of building a trusted relationship with their customer.

BA vision is to become the world's most responsible airline, and we have brought all our corporate responsibility activities together under the banner 'One Destination'. We have set challenging goals for further reductions in our carbon emissions, reducing and recycling waste and minimising air and noise pollution. We have continued to invest significantly in our community relations programme and are proud of our record of raising money for charities, both as a business and through the incredible energy and commitment of our people.

Five Key Goals - the steps company will take to achieve its vision:

  • Be the airline of choice for longhaul premium customers

  • Deliver an outstanding service for customers at every touch point...

  • Grow our presence in key global cities...

  • Build on our leading position in London

  • Meet our customers' needs and improve margins through new revenue streams...

Compete 2012

BA Compete 2012 programme aims to instil the drive and competition of the Olympic spirit into the way it work and perform as a team, and it puts its customers at the heart of its culture.

4.1 KPI's of British Airways:

key performance indicators is a financial and non-financial measure used to help an organisation measure progress towards a stated organisational goal or objective. BA performance through the year 2008 to 2009 is reflected in its Key Performance Indicators. BA failed to meet its financial target because of the unprecedented downturn in trading conditions. However, the move to Terminal 5 saw a step-change in its operational performance and it achieved record-breaking punctuality and customer recommendation scores.

Customer

Customer recommendation is a key measure of company success. BA Global Performance Monitor (GPM) survey, an onboard customer survey, together with a follow-up online survey on the arrivals process, provides monthly insights into customers' views.

Achievements in 2008/09

For 2008/09 company targeted a level of customer recommendation (the proportion of customers very or extremely likely to recommend British Airways) of 62 per cent. The move to Terminal 5 and the brilliant operational performance that company has delivered across our network as a result of this, drove a recommendation score of 65 per cent. .

Performance over time

� Colleagues

BA expect great things of everyone who works for British Airways.

To achieve this it is:

  • Investing in new leadership training;

  • Implementing clear communication programmes;

  • Improving the way company manage performance in all areas of business through training and systems solutions;

  • Re-enforcing the new

� Financial :

BA must achieve a consistently strong financial performance if it is to continue investing in the future success of the business and provide adequate shareholder returns. Operating margin is the main way for measuring financial performance.

Achievements in 2008/2009

2008/09 was expected to be a tough year financially, given record fuel prices, and BA expected a reduction in operating margin. The rapid decline in the global economic situation led BA to revise its forecasts through the year.

British Airways Financial Performance

Year Ended

Passengers Flown[33]

Turnover (£m)

Profit/Loss Before Tax (£m)

Net Profit/Loss (£m)

Basic EPS (p)

31 March 2009

33,117,000

8,992

(401)

(358)

(32.6)

31 March 2008

33,161,000

8,753

883

696

59.0

31 March 2007

33,068,000

8,492

611

438

25.5

31 March 2006 (Restated)*

32,432,000

8,213

616

464

40.4

31 March 2006

35,634,000

8,515

620

467

40.4

31 March 2005

35,717,000

7,772

513

392

35.2

31 March 2004

36,103,000

7,560

230

130

12.1

31 March 2003

38,019,000

7,688

135

72

6.7

31 March 2002

40,004,000

8,340

(200)

(142)

(13.2)

31 March 2001

36,221,000

9,278

150

114

10.5

31 March 2000

36,346,000

8,940

5

(21)

(2.0)

31 March 1999

37,090,000

8,915

225

206

19.5

31 March 1998

34,377,000

8,642

580

460

44.7

Competition:

In response to the worsening economic conditions, the airline industry is in the process of change in a number of areas.

Consolidation

Weaker customer demand coupled with record fuel prices, has sped up consolidation in the airline industry. Some 35 passenger and cargo carriers have either gone out of business or been absorbed into other airlines. In Europe, five independent have been, or are in the process of being, taken over by competitors.

In an effort to protect their airline industry from the effects of the financial crisis and global recession, some governments have resorted to bailout programmes. This has been particularly true in a number of major emerging markets, most notably China, India and Russia.

Regulatory controls:

Almost every aspect of running an airline is governed or influenced by a web of tight regulatory controls. These cover everything from the routes we fly, to the business partners we cooperate with, the airport slots we use, the fares we set and the infrastructure costs we pay. Strict rules also govern safety and security and the management of our environmental impact.There were a number of important regulatory developments during the year which will have a major impact on the industry in general and on our own long-term strategy.

Liberalisation:

In April 2009 BA completed its third application to EU and US competition authorities to operate a joint business on north Atlantic routes with our oneworld alliance partners, American Airlines and Iberia.

� UK Airport:

The UK Department of Transport is reviewing the way the CAA regulates airport charges. There is strong pressure for a review of the way BAA is regulated and for the introduction of cost-effective charges that ensure airports are managed efficiently.

Environment

All airlines have to meet a comprehensive range of local, national and international environmental regulations. BA approach to these is to comply with all regulations as an absolute minimum, and to exceed them in a number of key areas. For example, its commitment to halve our 2005 net CO2 emissions by 2050 goes much further than current industry-wide commitments to stabilise emissions at 2005 levels by 2020.

Safety and security

Safety is a key priority for BA. BA have a formal safety management system in place which ensures that IT meet all relevant regulations and IT operate a comprehensive monitoring system to ensure all incidents are reported and necessary action taken. From the start of 2009, all IATA member airlines have been required to pass an International Operational Safety Audit (IOSA). We have held IOSA accreditation since October 2007.

BA security department works within the wider international security framework to ensure that any threats to our business are minimised and to protect customers, worldwide assets, operations and staff.


5. IT Governanve And Business Change(IBC):

To deliver effective business change, IT projects must be integrated with changes to the customer proposition, airline processesand how people work. The IT and Business Change team - or IBC - in Im is responsible for designing the IT that BA needs to improve performance across the airline, and applies operations research, process and IT design skills to help businessa reas improve customer service and lower costs. IBC also develops and maintains the process and systems architecture and standards for the airline as a whole.

  • An example is the introduction of LEAN methodology across BA which is a method of improving customer service whilst reducing cost by engaging and empowering its staff, enabling them to identify waste and find opportunities for working more effectively. Examples of major IBC projects include work with the T5 team on designing the new processes and IT required for the T5 move, and working with the commercial team on the ongoing expansion of ba.com services including online check-in.


  • IBC also drives the highly successful Employee Self Service programme. IT for T5 The IT Programme for T5 is a vital element to ensure a successful move of the BA operation into Terminal 5. The programme will deliver new systems that underpin the changes in working practices that are required for the operation in T5.


  • On an average working day ba.com is visited by over 400,000 people - approximately four times the number who are travelling on a BA plane anywhere in the world.


  • Approximately 1300 bookings are made via ba.com per hour during a normal working day, resulting in approximately 30% of all journeys sold via the airline's website.


  • Online Check-in proves to be a favourite amongst the customers. Today already over 15% of all passengers are checking themselves in online.
  • Email continues to gain importance as a communications channel to customers, both for marketing and servicing purposes.


    6.Bibliography:

    http:/ http://news.bbc.co.uk/1/hi/1554140.stm/

    www.britishairways.com/travel/globalgateway.jsp/global/public/en_http://en.wikipedia.org/wiki/British_Airways#Financial_performan
    http://www.guardian.co.uk/business/2006/sep/26/theairlineindustry.britishairways"About British Airways"

    URL Source:

    http://www.britishairways.com/travel/about-british-airways/public/en_gb

    Source: Essay UK - http://www.essay.uk.com/free-essays/business/british-airways.php


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