*Stakeholder theory and its impact on British Airways.

Why is knowing your stakeholders important?The stakeholder relationship model explains what the connections between the organisation and its stakeholders are, and to what extent they influence each other. Good knowledge of the groups involved and understanding of the stakeholders can help the company raise its profile. *BA has a great number of different stakeholder groups, only 10 of them are considered the most dominant.

BA Stakeholders*

Stakeholder RelationshipsCustomers Although customers are the source of profit for the company they have little impact on how the company is managed. BA wants to keep the existing customers and aims to attract new and younger audience.*

Stakeholder Relationships cont. Employees Employees in BA have the power of influencing the customers. The cuts the company has to make, however, result in employee dissatisfaction. The cabin crew staff have been addressing their demands through strikes several times. This means that employees and management do not have strong relationships. The Front face of BA is heavily unionised. *

Stakeholder Relationships cont.CompetitorsBA is the largest UK airline by turnover with 8.99bn(yr ending 31st March 2009), followed by easyJet(2.69bn) and Virgin Atlantic(2.24bn)Although BA is the market leader, the low-cost airlines can affect the decisions the company makes.*

Stakeholder Relationships cont.Suppliers Boeing and Airbus are the main BA suppliers. They have high interest and big impact on the company and vice versa. BA has only one fuel supplier meaning it also has power over the decisions made by BA. *British Airways also depends on online travel agents such as cheapflights.co.uk, expedia.co.uk, lastminute.co.uk , etc. People often buy from such websites since they are convenient and often provide cheaper deals.

Stakeholder Relationships cont.Media The media has a great impact on the image of the company, especially covering the cabin crew strikes. BA is trying to keep a good relationship with the media in order to have good relations with its publics *

Stakeholder Relationships cont.Financial institutions Financial institutions have both high impact and interest in BA. They can refuse or grant funding. The need of funding depends on BAs gearing ratio and liquidity.*

Stakeholder Relationships cont.Shareholders Strong relationship with the shareholders is very important. They have high interest in the financial success of the company. Shareholders must be enquired before making big decisions such as changing a board member and authorising new strategies.*

Stakeholder Relationships cont.Local communities BA is trying to be a good corporate citizen with lowering the carbon footprint and having a satisfying relationship with the local communities. It presents itself as a socially responsible company. *

Stakeholder Relationships cont.Government/Regulations The sector has a wide range of legislation: European, Domestic and International These regulations can have a high impact on the whole industry but they are not tailored especially to the company itself.

Due to bilateral agreements between countries, some carriers cannot operate on specific routes.

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Stakeholder Relationships cont.Environmental Issues Unfavourable weather conditions such as the volcanic ash cloud can have a great impact on all BAs operations. BA, like most major airlines, has promised to reduce its CO2 emissions, waste, noise and air pollution.*

BA is for a two-way communicationBack in the 1996 BA realises the need of feedback and two-way communication with its customers. Mailing listsMany campaigns followed with different objectives of using those mailing lists not only for feedback, but for increasing ROI as well.e-Dialog campaign aiming at contacting travellers who have just returned from a trip and inspiring a new purchase while still in post-holiday mood.

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BA is in for a two-way communication cont.British Airways realising the power of social media and interaction with the brand, has created Metrotwin an online community bringing London and New York together. A place where people recommend and discuss places of interest in the two cities. The specific aim of this platform is to reach younger audiences and provide added value.Another platform where BA is getting in touch with its customers is Twitter lively discussions on routes and promotions as well as problem-solving team on hand.*

*Terminal 5 is working a successful British Airways Campaign

"Terminal 5 is working Situation Analysis: In March 2008 Heathrow opens a new terminal which is considered the new home for British Airways. Its first 48 hours of operation were not successful. There were lost suitcases, slow processing and angry passengers. In order to show customers that all of these issues have been resolved, BA decides to make a communications campaign.The campaign: It focuses on issues such as the length of time it takes customers to get through security, flight punctuality, baggage arrival times and other services that were reported as unsatisfactory.Objectives: The unsuccessful launch of the new terminal had to be followed by some image management in order to bring back the value BA had for its customers. The main objective being responding to the negative opinions of the travelling public.

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"Terminal 5 is working cont.Strategy and plan:Launching a dedicated website where passengers share their T5 experience Taking actual pictures of travellers and making billboards with facts from their journey such as length of time, punctuality of arrival, etc.Gathering information about travellers every day and creating adverts for the newspapers to print the next day.

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"Terminal 5 is working cont.Measurement and evaluation:A survey conducted by the company in August 2008 shows that 82% of the travelers rated the terminal very highly. The campaign made passengers aware of 96 check-in kiosks, 140 customer service desks and 90 fast bag drops where the check-in is completed for about ten minutes. BA cleared their image and proved itself as a innovative and customer-orientated company.*

"Terminal 5 is working cont.The Success The Terminal 5 is working campaign was a success because it was an honest way to show travellers that despite the rough start, BA is working towards making the flying experience more convenient and satisfactory. The success also relies in the good communication between BA Marketing department and the creative agencies which helped implementing the idea.

The campaign won several awards, including Best Poster Campaign, Best Consumer Advertising Campaign and Advertising Campaign of the Year.

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References LEtang, J and Pieczka, M (2006) Public Relations, Critical Debates and Contemporary Practice Lawrence ErlbaumKey Note., 2010. Airlines Market Report., [Online] Available at:http://0-www.keynote.co.uk.brum.beds.ac.uk/market-intelligence/view/product/2388/airlines?highlight=airlines+2010&utm_source=kn.reports.search#[Accessed on 24 Oct 2010].Sweney , M., 2008.Terminal 5 ads take off for BA. [Online] (Updated 25 Sept) Avaiable at:http://www.guardian.co.uk/media/2008/sep/25/advertising.britishairways[Accessed 23 Oct 2010].Williams , E., 2008.Terminal 5 Is Working. [Online] (Updated 06 Aug) Avaiable at:http://www.creativereview.co.uk/cr-blog/2008/august/terminal-5-is-working[Accessed 23 Oct 2010].Blyth, A., 2008.Terminal 5Six Months On. [Online] (Updated 25 Sept) Avaiable at:http://prweek.com/uk/news/search/848962/Terminal-5-six-months/[Accessed 23 Oct 2010].http://www.britishairways.com/ [Accessed 23 Oct 2010].http://www.metrotwin.com/ [Accessed 23 Oct 2010].*

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