British Airways Strategic Management

At the present time, the airline industry faces many cost pressures. The industry has made remarkable achievements in improving its efficiency. But cost pressures continue, from record high fuel prices to unjustified increases in charges from monopolistic airports, to further taxes imposed by governments (industryspotlight.org.uk). Higher costs inevitably lead to higher prices for airline passengers. Aviation is vital part of the United Kingdom. It is not only crucial in sponsoring almost 1 million jobs and £50 billion of GDP, providing around £8.7 billion in taxes to the Treasury of the country, but aviation is also fundamental to the success of economic benefits from air transport in the United Kingdom (Roberts-Hughes, 2014). Aviation supports exports, services, manufacturing, foreign direct investment and of course tourism. This sector gives us opportunity for the holidays and visits of family and friend in different parts of a country and also around the world.

British Airways, being the market leader in the given market scenario can take the following steps to protect its market share

Scope of competitive rivalry: primarily major carriers (revenue more than $1 billion). Legacy carriers developing low-cost offshoots

As for BA, their vision is being ‘the world’s most responsible airline’, their value is centred on putting people first.

British Airline PLC (BA) is the largest international airline that operates out of the Heathrow airport in London. The company recently merged Iberia which was initially proposed in 2009 and was approved by the European Commission in 2010. A new organization was created known as International Airlines Group (IAG) which is the world's third largest airline in regards to total revenue as well as the second largest airline group in Europe. British Airways was the creator of the Oneworld airline alliance in which it has formed a strategic partnership with other industry players such as American Airlines in the U.S. and Qantas Airlines in Australia. Given the size and breadth of the company, a stakeholder analysis must cover a lot of ground. This analysis will look at the different groups of stakeholders that are concerned with the performance of this organization.

With regards to competition within the industry, British Airways' position is strong, even though competition if very strong in the short route sector due to a larger number of smaller competitors and the consolidation of certain competitors. Over time, in the long route sector there is very little difference in prices between the company and its competitors.

British Airways has competently position its place to be known in both cargo flights industries and passenger flight industries not only in the European community but also

From the economic perspective there have been few main points of pressure on the strategy of British Airways. The 2008 global recession, the worst economic downturn since 1930s, continuous high unemployment rates, along with the fluctuation of the British Pound continue to negatively influence all businesses. Amidst the crisis, trade unions demanded greater government intervention to support employment levels. Yet, in order to preserve employment levels, collective agreements between UK social partners at organizational level set new standards of reduced working time (Eiroonline, 2010).

British Airways have been the symbol of the United Kingdom and its airlines for many years. They are the largest airline in the UK and have the largest amount of international flights and destinations. British Airways was formed in 1974 after four UK airlines, BEA, BOAC, Northeast Airlines, and Newcastle, were dissolved. The airline aimed at being a worldwide network and achieving economies of scale. This joining of four different organizations caused the airlines to have over 50,000 staff members and 215 aircrafts, which is considered to be grossly overstaffed and suffered allot of management structure problems. British Airlines also suffered serious cultural differences due to a ‘class’ distinction with the staff members.

In today’s business world, Aviation industry is frequently developing rapidly in order to compete among each other and survive in the larger markets. The passenger air travel industry is facing aggregate competition between low cost/no frills carriers -LCC and the more traditional full service carriers-FSC (Hunter 2006). Due to rapid development, consumer trend improved in the market because flying on mainstream carriers was no longer cost-effectively practical, which lead to an appear of low cost carrier (Whitelegg, 2005). Subsequently, operation strategy is fundamental to the success of the businesses. Slack, Brandon-Jones and Johnston (2013) defined operation strategy as “ The pattern of strategic decisions and actions, which set the role, objectives and activities of the operation (Slack, Brandon-Jones and Johnston: 2013: P70). In this essay, it will be discuss, how two successful businesses: British Airways and Ryanair compete and survive in the airline industry according to strategic operations performance. British Airways (BA) is a worldwide airline based in United Kingdom. It is a famous flag carrier airline. British Airways was established on 31st March 1974 and is now among the largest airlines compared to Ryanair, which is, an international airline based in Ireland. It is known as the low cost airlines and was set up in 1985 by the Ryanair family.

The company’s long-range mission is very much future-oriented that consists of “to become the number one aerospace company in the world and among the premier industrial concerns in terms of quality, profitability, and growth” (Boeing, 1995). The commercial airplane segment is involved “in developing, producing and marketing commercial jet aircraft and providing related support services, principally to the commercial airline industry worldwide” (Boeing segment information, 1998).

British Airways also try to balance between short-term benefits and long-term opportunities. In the short term, British Airways plan to cooperate with reliable travel agents to offer special services to meet customer and agents’ needs and wants to achieve to win-win-win situation. In the Long term, British Airways try to establish a flexible and innovative platform, and to create a cooperative environment in the airline industry.

British Airways (BA) is a company that encountered several difficulties back in the 1970’s and 1980’s. The poor performances of the organization, was leading the company to failure. BA was offering a service that even though it accomplished the mission of the company, was not providing customer satisfaction. The organization was not taking into consideration the needs of the costumer and was not providing an acceptable customer service experience. “Productivity at BA in the 1970s was strikingly bad, especially in contrast to other leading foreign airlines” (Jick, Peiperl, 2010, p.28). Due to numerous changes, the company increased their revenues and became a respectful and well know organization.

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

Recognition that not everyone is geared for the electronic world, leading the proposed airline to provide a high level of non-electronic service as well, particularly to the many newer, less-experienced travelers, but future loyal customers, found in the region.