British Airways Case Analysis

British Airways

British Airways (BA) is the flag carrier airline of the United Kingdom and its largest airline based on fleet size, international flights and international destinations

 When measured by passengers carried it is second-largest, behind easyJet

 The airline is based in Wateride near its main hub at London Heathrow Airport

British Airways is a founding member of the Oneworld airline alliance, along with American Airlines, Cathay Pacific, Qantas, and the now defunct Canadian Airlines

INTRODUCTION

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In January 1972 a British Airways Board was established by the UK government following the passing of the Civil aviation act 1971, to manage BRITISH AIRWAYS

CORPORATION (BOAC) and British european airways(BEA) were combined under the newly formed British Airways Group

British Airways was established as an airline on 31 March 1974 by the dissolution of BOAC and BEA. Following two years of fierce competition with British Caledonian, the second-largest airline in Britain at the time, the Government changed its aviation policy in 1976 so that the two carriers would no longer compete on long-haul routes

HISTORY

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British Airways is the largest airline based in the United Kingdom in terms of fleet size, international flights, and international destinations and was, until 2008, the largest airline by passenger numbers as well

 The airline carried 34.6 million passengers in 2008, but rival carrier easyJet transported 44.5 million passengers that year, passing British Airways for the first time

British Airways' main base is at London Heathrow Airport, but it also has a major presence at Gatwick Airport. It also has a base at London City Airport(LCY), with a major presence from its subsidiary BA CityFlyer, which is the largest operator from LCY. BA had previously operated a significant hub at Manchester Airport.

CORPORATE AFFAIRS

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BA CityFlyer, a wholly owned subsidiary, offers flights from its base at London City Airport to 23 destinations throughout Europe. It flies 14 Embraer 170/190 aircraft and one leased Saab 2000

The airline focuses on serving the financial market, though it has recently expanded into the leisure market, offering routes to Ibiza, Palma and Venice.

The former BEA Helicopters was renamed British Airways Helicopters in 1974 and operated passenger and offshore oil support services until it was sold in 1986

SUBSIDIARIES AND SHAREHOLDINGS

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Staff working for British Airways are represented by a number of trade unions, pilots are represented by British Air Line Pilots' Association, cabin crew by British Airlines Stewards and Stewardesses Association (a branch of Unite the Union), while other branches of Unite the Union and the GMB Union represent other employees

In 2005, wildcat action was taken by union members over a decision by Gate Gourmet not to renew the contracts of 670 workers and replace them with agency staff; it is estimated that the strike cost British Airways £30 million and caused disruption to 100,000 passengers.

INDUSTRIAL RELATIONS

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STRENGTH : international operations, employee productivity, strong presence at london heathrow international airport

WEAKNESS: declining profitability, unfunded employee post retirement benefit, sluggish revenue growth fromkey geographic reason

OPPORTUNITIES : global airline market, increase in trans-pacific cargo, growing asia pacific market

THREATS: rising fuel prices, increasing competition from low cost airlines weak economic outlook for U.S and EUROZONE

SWOT ANALYSIS

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Be the airline of choice for longhaul premium customers.. key to our profitability.. deep understanding of what is required to be their airline of choice to drive our design choices on product, network and service.

Deliver an outstanding service for customers at every touch point.

. to build on this through a revolution in the way we lead, train and reward, so that all our customers, on all routes and classes, enjoy a premium experience

Five Strategic Goals

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will invest both in improvements targeted, such as service style training, and in the benefiting all customers, such as Terminal 5

Grow our presence in key global cities.. to provide the best global connectivity for our

customers and will build our presence in the top tier global cities, either directly or through our expanding network of airline partnerships.

Build on our leading position in London To support this, we will look to influence

government policy decisions, and work with the airport owners on the continued development of the infrastructure.

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modern technology – Self Service Check-in (SSCI) .. Using IBM's kiosks .. Lower cost - estimated savings at $3.50 per

passenger

most advanced freight processing facilities service. BA used one of the largest computers outside the defence industry. . extract data from anywhere in the BA network in

two seconds.

COMPETITIVE ADVANTAGE

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Strategic positioning school because she looks where the market growth

the destinations that are more demanded by customers. On the following chart, we can notice that the

profitability of British Airways is good enough thanks to its “Value creation index” bigger than 1

However, Us Airways has a more comfortable place than its competitors thanks to its

high ratios. In fact, the figures show that the share price of Us Airways bring back

more than the share price of British Airways. It generates cash because its return

VALUE CREATION

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