British Airways

The United States carries over one third of the globe’s total traffic, where Over 1.5 billion passengers fly annually. Over the past 20 years, air travel has grown at an average of about 5% per year, the reason for annual change is usually differences in economic growth, and of course other environmental factors, such as the current war. As a rule, the annual growth in air travel has been about twice the annual growth in GDP. Deregulation, liberalization, and competition have essentially altered the management strategies and practices of airlines. Productivity improvements and cost management have been two of the greatest concerns for US airlines for the past twenty years. As a whole, the airline industry must continue to improve their specialization in terms of fleet utilization, pricing and revenue management, and schedule optimization.

The Airline industry is a large and constantly growing industry. It facilitates economic growth, international investment and world trade and is therefore central to other industries as well for globalisation. There are various forces which lead to globalisation in airline industry. Key drivers of change are forces likely to affect the structure of an industry; sector or market. (1).

In today’s business industry, the globalization process has become an important aspect and fundamental force. The elements that contribute to globalization is the environment, culture, regulation and technology and production. While the advancements globalization has increased greatly, so has the advancements in airline industry with their aircraft (Shevell, 1999). Globalization also provides a great amount of potential profits to nations and their corporations (Button, 2008). Air transportation has evolved into a major industry (Kroo, 1999). The airline industry’s continuously grows and is facilitated through its international investment, tourism, world trade and economic growth (Kroo, 1999).

Rising fuel prices has a huge impact on the airline industry. In an article published by the New York Times in 2007, oil prices were hovering ‘near $100 a barrel’ which caused the International Air Transport Association (IATA) to ‘slash’ their predicted profits for 2008 from ‘$7.8 billion to $5 billion’ (Clark, 2007). In 2008 high fuel prices were ‘dominant factor’ in the losses that faced the industry, and continued to same effect in 2009 (Dunn, 2009). Diagram 2 shows how fuel price has increased and fallen over the last 5 years.

American airline industry is steadily growing at an extremely strong rate. This growth comes with a number economic and social advantage. This contributes a great deal to the international inventory. The US airline industry is a major economic aspect in both the outcome on other related industries like tourism and manufacturing of aircraft and its own terms of operation. The airline industry is receiving massive media attention unlike other industries through participating and making of government policies. As Hoffman and Bateson (2011) show the major competitors include Southwest Airlines, Delta Airline, and United Airline.

1. There are a few trends in the US airline industry. One is consolidation, wherein existing players merge in an attempt to lower their costs and generate operating synergies. The most recent major merger was the United Continental merger, which is still an ongoing affair, but has created the largest airline in the United States by market share (Martin, 2012). Another trend is towards low-cost carriers. In the US, Southwest has been a long-running success and JetBlue a strong new competitor, but in other countries this business model has proven exceptionally successful. The third major trend is the upward trend in jet fuel prices, and the increasing importance that this puts on hedging fuel prices and capacity management (Hinton, 2011).

The aviation industry of any nation acts as a contributor to its economic growth, helps in globalisation and creating an international image. It is the best in terms of the fastest, safest and convenient mode of travel. Even though it is an expensive one, it is expanding its markets across the middle-class who are ready to spent money on leisure trips. Thus it is truly stated that aviation forms a vital core infrastructure area without which a country economy is handicapped.

Airlines Industry is large and growing, it is also the most fiercely competitive sector. It facilitates international trade, world economy growth, tourism and international investment. The airline industry has over time with the use of modern technology been able to take advantage of the short haul, high frequency and gained a competitive advantage over other forms of travel, such as buses and railroad travel. Additionally, the airline industry still holds the market for global travel at a low cost and convenient way to travel. The aviation industry gives a good contribution to the GDP which includes the following: airline services, general aviation, civil airport operations, aircraft manufacturing, and

British Airways is one of the top airlines both globally and in the UK. It boasts a large global flying network and provides travel to over 170 destinations on 280 aircrafts. Annually it serves 40 million customers making it an accessible, convenient brand, and an Industry leader (British Airways). In comparison to the original brand Virgin Atlantic, British Airways markets itself very differently despite sharing a niche and a market segment. The 4-Ps analysis will be a useful tool in examining these differences further, as well as analysing the major differences to determine how British Airways has distinguished itself from rivals such as Virgin Atlantic.

-The rising cost of Airline travel and the (ever present) fear of terrorism have caused many

The new group will combine the two companies in the UK and Spain and will enhance their presence in the international long haul markets while retaining the individual brands and current positions of each airline. British Airways and Iberia hope their new company International Airlines Group, International Airlines Group, will position the pair for further consolidation in the global airline sector as it emerges from a prolonged industry downturn and hope to compete with multinational rivals Air-France-KLM and Lufthansa.

Since the airline industry is a direct product of market conditions, it is greatly affected by all externalities. Many people noticed a decline in travel after the September 11th tragedy occurred due to safety concerns. When there is a huge increase in fares that definitely interferes with the demand for travel; it causes the price of tickets to continue to rise since a clear correlation between supply and demand exists. When the economy is doing well in terms of the employment rate, and when the dollar is strong people have the tendency to travel more (Jerram,1998).

Table of ContentExecutive Summary1I. Introduction2II. Main Body1. History of British Airways22. Current strategic situation….42.1 Internal analysis42.2 External Analysis52.3 SWOT82.4. Current strategy93. Potential Strategic options124. Recommended strategic direction with rationale164.2 Strategy Evaluation175. Identification of critical success factors186. Performance measurement criteria197. Conclusion218. Bilbliography249. References24Executive SummaryThe main aim of this report is to undertake a review and analysis of British Airways. It is UK's leading airlines both at international and domestic level, with its operations spread over 300 destinations across the world. The report starts with a brief description of the company. Then the

This paper discusses the external economic factors affecting the strategic decision of airline industry and how this decision in turn, affect the market forecast of the aircraft manufacturing industry. Various business issues affect airlines operation either directly and indirectly, and

The purpose of this project is explore how information systems helps organisations to make decisions at different levels to achieve set objectives and strategic advantages over competitors .The team carried out research and debate on various companies, and agreed to focus on British Airways. Through literature we found out, that BA is amongst the busiest premium international airlines worldwide, BA operates mainly from Heathrow, London city and Gatwick airports and flies over 35million people to more than 300 cities and freights an average of 700,000 tonnes of cargo each year (ref). BA’s air cargo business, in conjunction with its scheduled passenger services operate under the licence governed by the United Kingdom Civil Aviation Authority