Case Study: British Airways

Professional Practice 4IM001

Case Study: British AirwaysMarket

Air travel generates over 200 billion in revenues and provides at least 28 million jobs around the world. It is an extremely competitive market, with over 260 airlines fighting to win a slice of 1.6 billion passenger journeys per year.

Historically, airline passenger numbers have grown rapidly, with traffic on scheduled airlines rising at an average annual rate of just under 5%, while cargo volumes have increased even faster.

British Airways is the largest international airline in the world, carrying more international passengers than any of its competitors. Last year over 44 million passengers flew on 499,000 British Airways' international scheduled services. That is the equivalent of 80 passengers checking in every minute, 24 hours a day, and a British Airways flight taking off and landing every 60 seconds.

One of the main stimuli to air travel has been the privatisation and deregulation of the industry. One feature of this changed landscape has been the emergence of the 'no-frills' airlines, which have achieved rapid growth in market share in the US domestic and short haul European markets.

A second feature of this has been the formation of global alliances between carriers allowing them to co-operate on such activities as marketing, ticket booking and frequent-flyer programmes.

The airline industry suffered a major shock in 2001, with the combined forces of a global slowdown and the use of commercial aircraft in the September 11th terrorist attacks. The effect on the industry was a sharp drop in passenger demand, and 2001/02 was forecast to see airlines sustaining large losses as the industry dealt with the biggest challenge it has faced for a decade. A year on from September 11th, the airline market was still a long way from making a full recovery, although the current opinion is that these events will not dent the industry's longer-term growth trend or its economic importance. Achievements

One of British Airways key achievements of 2002 is a new short haul pricing structure for the UK and European markets. The airlines new commercial proposition promotes competitive low cost fares with a full service offering.

Introducing lower starting fares and the removal of restrictions such as the Saturday night stay rule; provides the customer with a choice of greater flexibility and value for money, enabling British Airways to offer more competitive options for both its business and leisure customers. This heralds a fundamental shift in British Airways price advertising strategy. British Airways now offers fares starting from 59 return on domestic flights and 69 return to Europe.

British Airways received numerous awards in 2002, including Best Airline in Western Europe, Best Transatlantic Airline and Best International First Class by the OAG. Also Best Airline, Best First Class, Best Business Class, Best Shorthaul Flights, Best Frequent Flyer Programme, Best Cabin Staff and Most Innovative Airline by the Business Traveller Magazine. Also in 2002, British Airways received the NOP World Business Superbrands Award for being Best Community Member. History

British Airways origins date back to the pioneering days of civil aviation, following the end of World War I. Its forerunner, Aircraft Transportation and Travel Limited (AT&T), launched the world's first daily international scheduled air service between London and Paris in 1919. The single-engined de Havilland biplane carried just one passenger and took two and a half hours to reach Le Bourget. In 1924, AT&T merged with three other fledgling British airlines to form Imperial Airways Limited. During the 1920s and 1930s services were offered to Egypt, India, South Africa, Singapore and West Africa. Meanwhile, a number of other UK air transport companies merged to form the original privately owned British Airways Ltd in 1935. Imperial Airways and British Airways were nationalised in 1939 to form British Overseas Airways Corporation (BOAC).

The 1950s saw the dawn of the passenger jet age and BOAC led the way flying a Comet to Johannesburg in 1952, halving the previous journey time. BOAC also operated the first transatlantic jet services in 1958, with two Comets flying simultaneously between New York and London.

In the 1960s, other British airlines began to offer competing services. In 1967, the government unified these independents into a third carrier, British Caledonian. In 1972, the boards of BOAC and BEA were combined and, in 1974, the two formally merged to become British Airways. Continuing its pioneering spirit, British Airways launched the worlds first supersonic passenger service, simultaneously with Air France in January 1976.

In February 1987, British Airways was privatised. Over one million applications were received for shares, making the floatation eleven times over subscribed. The oneworld alliance came into operation in February 1999 and combines the services of British Airways, Aer Lingus, American Airlines, Cathay Pacific, Finnair, Iberia, and Lan Chile, serving more countries than any other airline alliance.

British Airways has developed a strong relationship with Qantas, operating a joint service agreement, which allows sharing of revenues on Europe - Australia services. It also has simple code-sharing arrangements with several other airlines outside the oneworld alliance. Taken together with its extensive network, these partnerships increase the scale of British Airways presence in the major world airline markets British Airways has a fleet of over 220 aircraft including 56 Boeing 747s, 45 Boeing 777s and 38 Airbus A319/320s.

The airline's offering is organised around a portfolio of products and services developed in order to meet customers' needs.

Concorde is the flagship of British Airways fleet and its passengers receive priority treatment wherever possible, with exclusive lounges at London Heathrow and JFK, and specially trained crew to ensure the premium level of service is delivered superbly.

FIRST, described as the "ultimate in privacy and control" has been refreshed and enhanced since its original launch. The tailored service and personal space offered by FIRST allows travellers to work, rest and dine at any time during their journey. The cabin layout provides a private environment and seats which converts to a six foot six inch flat bed.

New Club World provides the first fully flat bed in business class. Each seat benefits from in-seat phone and laptop power, a movable privacy screen, improved in-flight entertainment and flexible dining options including pre-flight dining on selected routes. Club World also gives travellers access to over 200 airport lounges worldwide. 75% of the British Airways long haul fleet is now fitted with FIRST, New Club World and World Traveller Plus cabins. British Airways intends to fit all 747 aircraft from London Heathrow with these cabins and also to introduce them to the Gatwick fleet.

World Traveller Plus is a premier economy cabin with a maximum of five rows of seats and increased legroom. It offers more space and a quieter, separate cabin, ergonomically designed seats and redesigned cabin interiors.

World Traveller has a comprehensive range of services and benefits for customers flying long haul in economy. It has a family focus (including 'Feed kids first' and children's activity packs) aiming to make long haul travelling easy.

Club Europe services are available on European flights and enables travellers to choose from a variety of check-in options and ground services. British Airways offers the best network, schedule, and frequency available.

Euro Traveller has the same choice of check-in options, network, schedule and frequency as Club Europe, but offers a premium yet value-for-money service.

Within the UK, the brand offers more flights to more destinations with the best punctuality.

The British Airways Executive Club is an established loyalty programme with over three million members worldwide. Benefits include dedicated phone and web facilities, priority boarding and the ability to earn BA Miles when using British Airways or any airline, hotel or car hire partner.

On Business is a loyalty programme for small to medium sized companies. Companies can earn points for flying with British Airways which they can then exchange for free British Airways flights and other cost saving rewards.

A range of check-in options are available when flying with British Airways, including telephone, online, self-service and London Paddington and airport departure gate check-ins. Online check-in gives travellers the opportunity to save time at the airport by checking in via the internet before they leave the office or home.

British Airways e-ticket can be amended up to 30 minutes before check-in and gives passengers the opportunity to avoid airport queues by using a British Airways Self-Service Check-In machine.

As well as a full range of customer services, British Airways supports a dedicated extranet site for the travel trade that provides information on all British Airways products and services, including any promotional offers. The extranet site also supports the highly successful functionality Ask BA, which allows users to ask a question that is answered instantly online. Recent developments

British Airways recently re-designed its website home page to make www.ba.com easier to use and more appealing in the very competitive online selling arena. The new look home page is aimed at helping new and existing customers have a better online experience. Links to British Airways special offers and the Executive Club, plus advice on how to access British Airways new cheaper fares are in place.

The website is now the most popular way for passengers in the UK to book their tickets directly with over one million visitors a week and a weekly average of 6.4 million revenue generated. Brand values

Customers look for airlines that inspire confidence and that they can trust. British Airways responds to this with the two fold promise of reliability and reassurance.

Its reliability is reflected in the scale of operations and presence in the market place that the British Airways infrastructure allows. The choice of destinations and size of the fleet mean customers value British Airways schedules as well as trusting the airline to have enough planes to keep a service running.

Reassurance is underpinned by safety and security from baggage handling to punctuality, cleanliness and schedules, through to products and services. The airlines heritage, quality standards and attention to detail also supports this.

These traditionally British values are a fundamental part of the British Airways brand identity. As national flag carrier, British Airways UK customers voice the statement travel the world and feel at home. International customers, who place similar emphasis on such values, echo this sentiment just as strongly. What they are looking for essentially is a British experience in the air. British Airways 2005In 2004/05, British Airways carried over 35 million passengers and nearly 900,000 tonnes of cargo. Its airline network is centred on the United Kingdom, where 85% of its 47,500 workforce is based.The mission of the group is to deliver service that matters for people who value how they fly. To realise this, British Airways recognises the importance of working in partnership with its stakeholders. This has influenced its approach to corporate social responsibility (CSR). Its approach has also been influenced by the recognition that airlines generate major social and economic benefits, but also have significant impacts on the environment (for example, through noise and air quality) and on communities around airports.

There are several reasons why British Airways chose to engage in CSR. The first is because it is a tool to help achieve the companys long term strategic goals in providing growth opportunities around Heathrow airport. Secondly, improving business efficiency and reducing costs through waste and energy programmes provided a strong business case for CSR. The company also thought CSR could help them with risk management by identifying risks to health, safety and environment that could hinder its opportunity to attract investors and grow the business. Lastly, it recognised that it needed to act to enhance its corporate reputation, and customer feedback (both corporate and from the general public) revealed that they expected British Airways to do the right thing

Task:

Please read the case study thoroughly and understand British Airways as an Industry including what it stands for.

Assignment Detail:

You are required to bring the case study up to date based around the same subject headings as outlined above.

Based on your research, you are required to write a CASE STUDY of around 1500 words +/- 10% excluding appendix, which should include the use of case study research methods as outlined in the lecture. You should highlight how you have conducted this research and apply an appropriate model to support your understanding.

This work will then form part of your portfolio of work to be submitted.