British Airways (BA), a flagship carrier airline in the UK, was created in 1974 and is headquartered in Waterside. It was privatized in February 1987 and is the largest airline in the UK based on fleet size, international destinations and international flights. BA's - British Airways World Cargo subsidiary is the world's twelfth largest cargo airline in terms of total freight tonne-kilometers flown. However, the company reported its biggest annual loss of £531m in FY2011 due to lower passenger numbers, higher costs and the impact of strike action.
British Airway's Product and Pricing Strategies
The company's core brand philosophy has been 'Quality Flights for All Classes'. Unlike its major competitor Virgin Atlantic that has ventured into radio stations, cola, insurance and financial products, BA have chosen to concentrate on the flight industry. The company flies to 95 of the busiest airports in European cities, 58 destinations around the world and provides a range of augmented services to its passengers to serve their varied needs. These include separate lounges for executive class fliers, different on-board menu and wines for the business class, two in-flight magazines, four radio channels, free food and drinks on the flight and more. The company's pricing policy allows the customer to choose the extras which they prefer to be included in their tickets the company is providing.
Market Trends and Competition
The global aviation industry has been through turbulent times in the recent past. On the one hand, fall in traffic, soaring fuel prices and beefing-up of security procedures in the face of global terrorism have led to higher operating costs and lower profit margins. On the other side, air travelers are not only looking for high-quality services and on-time arrival, but also low fares. And, perhaps the most significant development of these all, that has considerably changed the way the global airline industry operates, has been the rise in the number of low-cost carriers. Traditional carriers have had to try and achieve low cost and product differentiation simultaneously, a strategy that is a sure recipe for disaster. These trends have forced big airlines across the board to consolidate their businesses.
Changes and Innovations
With an increase in competition, BA has changed its pricing objectives from maximizing profits to market share maximization. In keeping with the global trend of consolidation, the company has ventured into agreements and mergers with various airlines like the Spanish Iberia, UK based ICRR that manages 'Eurostar' and 'Flybe' another UK based regional airline.
The company has also launched a low-cost carrier called OpenSkies, a unique concept as it offers the perks of a traditional carrier and does business outside its parents home based while operating at lower costs.
The airline industry is an intensely competitive market and despite the recent recession it remains a large and growing industry. According to a research agency, the global aviation industry is expected to grow at a CAGR of 5.6% during 2004-2024. While the conventional matured airline markets will see a cumulative drop in their market share from 61% in 2005 to 52% in 2025, the emerging markets such as China, India and Middle East possess great potential for this sector.
The question is, while the industry as a whole is looking up, will British Airways be successful in completing its controversial cost-cutting measures that have been a major source of strikes and losses to the company and be able to strengthen its footprint in the global aviation industry?
[...] The prime attraction of the British airways' long-haul aircraft is the Boeing 777, with 58 of it in the fleet. The British Airways has 55 Boeing 747-400 in its name making it the largest operator of this fleet. Located in Harmondsworth, a village close to the Heathrow Airport in London is the head office of British airways in Waterside. Formerly it was located in Speedbird House, in the grounds of Heathrow, later which was shifted to Waterside after it was completed in June 1998. [...]
[...] Strengths: • British Airways boasts of an time-honored as well as a reputed brand name that is well known for bearing the symbol of United Kingdom air transportation. • Affluent as well as a strong partnership with United Airlines and with the development of Oneworld airline it has now become the third largest network globally. • It is the biggest United Kingdom based airline measured in terms of economic size as well as stability • The development of the Terminal 5 have improved mobility in Heathrow airport Weaknesses: • The relations with the employee have not been good time and again which have led to a number of crew strikes as well as issues which have not been taken care of effeciently. [...]
[...] • Competition: the company works in highly competitive conditions. They face straight competition from different airlines on various routes, from indirect flights, charter flights as well as also from other mode of transports. • Debt funding: the company carries considerable debt that has to be repaid. Their capability to finance the continuing operations, dedicated aircraft orders as well as potential fleet growth policies are susceptible to a range of factors including economic market conditions. • Economic conditions: the company's revenue is extremely sensitive to the financial conditions of the market in which it functions. [...]
[...] The offers will influence the travelers be it business or personal to opt for the British airways. PREMIUM They are focusing on making sure that the customers get the benefit of their exceptional premium service whenever as well as wherever they operate. AIRLINE Their main focus will still be on the aviation – helping individuals to travel and transporting the cargo will be the prime business. They have been working on coming up with new products as well as facilities to balance this. [...]
[...] British Airways' prime base is at London Heathrow Airport; however its important presence is also at the Gatwick Airport. In addition to this it has a base at London City Airport (LCY).Its subsidiary the BA CityFlyer is the biggest operator here. Source: As of January 2015, the British Airways fleet is made up of the following registered aircraft (including non-operational aircraft) http://en.wikipedia.org/wiki/British_Airways Ø Historical and Strategic Developments: ➢ In January 1972 a British Airways Board was set up by the government of the United Kingdom after the formulation of the Civil Aviation Act 1971, to take care of the British Overseas Airways Corporation (BOAC) as well as the British European Airways (BEA). [...]
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