British Airways Essay
I – SWOT Analysis
The strength of the airline includes the excellent new fleet of aircrafts purchased to compliment comfortable traveling of passengers. This move was made to counter the wretched state of travel and complains received by the previous fleet used by British Airways. An amazing magnitude of operations allows British Airways an advantage over her competitors by catering to a wider variety of customers. Competitor airlines, such as Virgin Atlantic Airways have a magnitude of operations 15 times lesser than that of British Airways [Fedrick, 2002]. A great diversity of routes flatters this great magnitude of operations.
These factors make the services of BA more accessible to prospective customers in United Kingdom and around the world. Packages ensuring customers a better mileage for their money make the airline more attractive and offer competition to the airline industry, triggering an opportunity of earning larger revenues. British Airways offers its customers services of world-class quality, which is comparable to the services offered by the best airlines from the globe.
These services include measures to facilitate flight reservation and booking from the World Wide Web, customer support, terminal facilities and other services involving comfortable traveling of customers while onboard and waiting for connecting flights. The airline enjoys stability from its alliances with OneWorld. Some of the airlines in this alliance are American Airlines, Cathay Pacific, Emirates and Deutsche Ba. In pursuit of offering its customers with competitive packages, British Airways keeps on innovating new packages at diverse rates. This alliance has helped BA reach out to 570 locations in about 134 countries. Customers enjoy a variety of destinations and world-class services that cater a similar variety of customers ranging from explorers to executives.
British Airways bears certain weaknesses that the company needs to overcome. Amongst these weaknesses is the lack of marketing strategy to win customer loyalty. Despite the great infrastructure hosted by the company, BA needs to carry out better marketing schemes to attract prospective travelers. The company suffers from a deprivation of strategic management for investment in the future which is most important for growth of the airline. The airline industry is growing due to globalization and needs of individuals to travel and explore. BA needs a strategic management strategy to keep its goals aligned with growing market trends to match needs of the future. Another weakness of the airline is the weak repute due to compromising operations in the past. The customers previously complained about the inefficiency of the airline to meet scheduled times of the flights and poor accommodation of travel which resulted discomfort. This gave birth to an ill-repute the airline suffers from its operations in the past.
The opportunities offered to British Airways lie in more or less the same generic category offered by the airline industry to other companies. The airline relies on the willingness of customers to travel in pursuit of business, leisure, need or exploration. Another opportunity specific to British Airways is the flux of business due to the OneWorld alliance that allows the airlines included in the group to cater to a huge variety and quantities of customers. Furthermore, the increasing competition in the airline and transportation industry gives BA the opportunity to actualize their quality services offered to the travelers keeping in mind the strengths of the airline.
These entire opportunities serve as vent for the company’s potential to positively affect the clientage by winning their loyalty and offering chances to increase upon revenues.
It is reckoned that competition will come up with measures to expand operations to counter efforts made by British Airways. This is one of a couple of threats the airline faces in the airline industry. Although the strengths and opportunities BA offer the company a competitive advantage, the competition will always pose as threat to counter the measures taken by the airline. Global recession is a great factor the industry depends on. A recession is responsible for discouraging investors in the industry, and also the travelers from traveling around the globe in order to save in the interest of necessities. This retirement from spending in the industry discourages the airline from orientating towards goals.
The industry is shaken by seasonal changes occurring in the traveling industry. Summer is a commodious for the traveling industry as people all around the globe take time out for vacations, often accompanied by children. Though, in times of extreme weathers, several flight operations are disarranged and compensating flights take over. The seasonal fluctuations pose a threat by the sheer nature of their unpredictability, infringing customer dependence on the airline. Global events, such as the Terrorist activities of September 11, 2001 model one of the biggest threats the airline industry is faced with. People have showed a decline in dependence on airline travel since the terrorist acts, in order to secure their lives. This threats the airline achievement of its goals of providing customers with prestigious services and the airline to earn revenues for its operations.
II – Operations
Measures are constantly taken to counter the operational difficulties faced by the airline. Restructuring has been carried out within the company to measure up to objectives of the company. Measures to restructure include job cuts and investment into assets to indulge the company into achieving better standards than those offered by the competition. British Airways actively invested in new fleet of aircrafts with more comfort. A technologically advanced image is aimed for with installation of new control systems and terminal facilities at the outlets of the company. The customers welcomed the image of British Airways. [Grugulis and Wilkinson 2001]
British Airways has been pursuing mergers, franchises and alliances. This makes it convenient to cover the operational overhead incurred by the company by sharing financial, manufacturing and strategic functions. An example of the operations of the company includes the maintenance operations of the airline which were sold to GEC and the data processing operations were outsourced to Bombay [Warhurst, 1995, Blyton and Turnbull 1996, Colling 1995]. Such expeditions were critical in exhibiting a fresh new outlook that represented a makeover in the operations and services of the airline. Since the renaissance of the airline, the portrayal of the newly arisen appearance and operations of the airline has been made consistent without failure.
According to BBC [British Airways seeks revival, 2003], the British Airways has focused its attention towards the executive class customers to maximize their profits. Also, the company has indulged into expeditions to reduce the fuel cost incurred by the airline to be able to provide better quality services to the clients.
Another important aspect to uphold the quality of services and growth of the company is the dedication of the company towards employee training. Since the introduction of the new fleet and the fresh company image, the terminal systems and the online reservation systems, BA has emphasized on the importance on training of its staff at all levels, from executives, managers to operational staff. The employees are trained to provide exceptional catering to customer demands. Also, with the introduction to feedback systems the need for outstanding customer support (training) has evolved.
British Airways operations are more centralized, as based in London, as compared to other airlines, such as Lufthansa, which are decentralized. The centralization of operations makes the airline more profitable [Lehrer, 1997]. Comparison of BA and Lufthansa reveals that the former has a higher ranked organizational structure. Also, adding to this comparison is the technological ascendance of BA over Lufthansa. If compared with a no-frills airline such as Ryanair, BA lacks the low cost element which gives Ryanair the edge to operate low cost flights. According to [Matai, 2001], the online website for Ryanair operates on a better web server application than that of of BA, bringing forth the recognition of different operating abilities of the airline companies in the industry.
III – Marketing Strategies ; Target Market
According to BBC  British Airways as focused its attention to the executive-class passengers. This bias in focus is ascribed by the frequency of traveling done by the executive class travelers. Accompanying the cost associated with the travel of executive class passengers the magnitude of revenues can be intensified. A simple glimpse of the British Airways Official Website would reveal the master plan of the airline. The business class passengers are focused for special packages upon their choice of traveling with the airline.
On each travel stop the business class passenger makes, points are earned that qualify the passenger to various offers and gifts. Incentives to regular executive customers of British Airways have been responsible for earning the airline customer loyalty. BA gives away holiday packages, travel discounts, and unmatchable indulgence by providing the executive class with Chauffeur drivers, Express rail tickets during international travel and hotel vouchers and what not. Besides the executive class, regular customers too are catered with an exceptional level of care. [British Airways Official Website 2003]
The operations of management at BA has assures fresh and rich food to be stocked and served to passengers while they are onboard the flights. The decision taken by the budgeting department to restructure and cutting on fuel costs have helped BA focus intensely on the quality of services provided onboard to maintain a positive repute amongst the customers.
The marketing strategy BA is complete customer orientation. The company seeks to cater each of the varied type of customers. The airline has initiated routes to a wide range of destinations all around the globe with main focus on flights from the United Kingdom to the United States [British Airways Official Website 2003]. Backing a network of destinations are the competitive tariffs hosted by British Airways. Competitors like Virgin Atlantic Airways do not offer the customers as good a variety of destinations [Fink and Harrich 2000] as the size of BA is 15 time greater than Virgin [Fedrick, 2002].
The Marketing team of BA drafts the latest customer requirements by continual appraisal of its services according to customer trends. One of the moves cut out to favor the young unassisted travelers was to prohibit these travelers from sitting next to adult male traveler. This move was actualized to counter sexual or physical abuse inflicted on the young by the adults [‘British Airways announces changes, 2002]. Such moves improve the outlook of the airline in aligned to its objectives, attributed to the marketing team at British Airways.
Another competitive advantage requires from British Airways to setup a global electronic network to bring the services closer to the target customers of the airline. A 24-hour customer support group corresponds to customer queries. Online ticket reservation and flight schedules open up a great domain of options available to the prospective travelers. [British Airways Official Website 2003]
The company has projected an image that flourishes communication with the customers of the airline on the official website of BA [British Airways Official Website, 2003]. Emphasis on security of customers is highlighted which encapsulated the interest of passengers who are afraid to travel since the September 11 terrorist attacks [British Airways Official Website 2003]. By offering extra preventive measures in the interest of safety of the travelers, and their health, British Airways confirm a devotion and loyalty to the clientage. A recent example of such activity is observed in the management and scheduling of flights due to or through Hong Kong and Beijing in the scare of the SARS virus [‘British Airways announces changes, 2002].
IV – Marketing Mix
With the examination of the internal and the external environments of British Airways through the SWOT Analysis (outlined earlier) the company has a focus on its marketing mix strategy.
BA exploits its strengths to identify the product in the market. The huge fleet of BA and the quality care with comfort provided to the customers upon their choice of traveling with the airline are identified. Customers are informed of the various travel destinations packages and incentives they can expend upon traveling with BA.
Competitors of BA, such a Virgin has mostly well-defined product descriptions insisting on their grand quality of services [Fink and Harrich 2000].
In their online ticketing service, EasyJet provides the customer with a customer code, while BA offer its customers an electronic ticket, also dispatching the tangible ticket by snail mail [Chandler, 2003].
The cost that the customers pay for traveling with BA is minimized relative to the level of satisfaction the product offers. The cost each tariff bears is standardized and affordable. But alternately, British Midland airline has been seen to have a better competition as it offers cheap flights equally diversified frequency of flights and ease of the availability of the seats. Being a part of the Star Alliances brings it at par with BA [British Midland Official Website 2003].
Comparing BA and Easyjet, the latter offers the clients low tariffs and dynamic pricing, while the former offers high quality services at a relatively higher cost [Chandler, 2003].
BA has distinguished her services from the rest of the airlines by offering features and benefits to the loyal customers and wide range of incentives to the new consumers inside and outside the United Kingdom. BA has made place in the domestic and International market by identifying patent offers, the target of appeal being the customers that either frequently travel for businesses expeditions, or those who travel for exploration. Flight routes are scarcely distributed among less frequent destinations, for example Pakistan or Africa, and more business resources are made available for destinations in the United States.
The competitors lack in this marketing strategy by inefficient distribution of flights to and from less visited destinations. Another marketing strategy introduced by BA is the placement of reservation and flight schedules online on the World Wide Web that makes them more accessible, giving the company a competitive advantage over rivals.
In comparison to EasyJet, BA offers direct and indirect distribution to its clients through travel agencies or kiosks. Easyjet, on the otherhand just offer a direct distribution for the clients [Chandler, 2003].
BA to promote their new look, features and services being offered has used various media. The presence of an online secured website adds to the list of promoting elements. The airline strives to make their services speak loud for their own representation. Though the most effective way to promote the airline is an advertising campaign, often resorted to by airlines, has revealed solid results for BA as well as the rivals.
During her campaigns, British Airways promoted the image of the airline with the statement “Britain’s favorite Airline” to “World’s favorite airline”. Tail fins were reflective of the new image of the company, which helped promote the latest image of BA. [Caragher, 2001]
In comparison to EasyJet, BA website offers special packages and hotel deals hosted by the airline, while Easyjet hosts holiday packages offered by other companies in collaboration with the airline [Chandler, 2003].
V – Key Success Factors
The key factors responsible for steering the company to success are many. During our study we have come to realize the importance of the restructuring of the company. The job cuts, investment in state of the art passenger planes, equipment for terminals and online reservation systems are the key elements of the restructuring. The evolution of the culture within the organization was a pinnacle event in envisioning the airline objectives. With a backup of great marketing strategies and marketing mix, British Airways has been able to steer clear of the competition to heights of quality services to the customers.
The evidence of the growth of profits of the company can be seen in the financial statement mentioned in Appendix 1 [Hoovers 2003]. While competitors like Virgin and British Midland will no doubt eventually improve on their services nevertheless it has been observed that BA have lead the way for European airlines. Although it had negative repute in its earlier years but nevertheless, the new management has goals to overcome those obstacles. With its infrastructure as well as dynamic marketing strategies it will be able to secure the top position. Traditional and no frills airlines are limited in their scope in that they are not able to expend their operational costs to the value added services that are utilized by BA as part of its promotion.
VI – British Airways Response to No-Frills Airlines
As the low cost no-frills airlines are emerging rapidly in the market, BA has sought certain counter measures to prevent occurrence of loss to the company. The airline has raged a war of fares in competition with no-frills airlines, since the launch of low cost, short-haul service flights from the Gatwick airport. The main competitors for the war against fares are EasyJet, Ryanair and previously owned no-frills airline, Go. [Reece, 2002]
British airways will follow the same tends as the no-frills airlines, and that would include no meals and refreshments through the flights to slash operating costs of the flights [Reece, 2002]. Other measures in response to the no-frills airlines are using tele-marketing to provide ticket sales. British Airways will also use new route to reduce costs. The company has also considered restructuring to limit the cost of flights in accordance to the no-frills airlines [Guardian Unlimited, 2002].
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