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British Airways

British Airways

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Published by Sachin Rao

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Categories:Types, Research
Published by: Sachin Rao on Sep 20, 2011
Copyright:Attribution Non-commercial


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Project Management 
Project Management 
The British Airways group consists of British Airways plc and a number of subsidiary companies including British Airways Holidays Limited. British Airways
is one of the world‟s leading airlines with a network that provides passenger and
freight services to 149 destinations in 72 countries. In 2004/05, British Airwayscarried over 35 million passengers and nearly 900,000 tones of cargo. Its airlinenetwork is centered on the United Kingdom, where 85% of its 47,500 workforce isbased. The mission of the group is to deliver service that matters for people whovalue how they fly.
1) CSR (corporate social responsibility) i.e. climate change Programme
To realize this, British Airways recognizes the importance of working inpartnership with its stakeholders. This has influenced its approach to corporatesocial responsibility (CSR). Its approach has also been influenced by therecognition that airlines generate major social and economic benefits, but also havesignificant impacts on the environment (for example, through noise and air quality)and on communities around airports. There are several reasons why BritishAirways chose to engage in CSR. The first is because it is a tool to help achieve
the company‟s long term strategic goals
in providing growth opportunities aroundHeathrow airport. Secondly, improving business efficiency and reducing coststhrough waste and energy programmes provided a strong business case for CSR.
2) Revenue management
Revenue management was developed by the airlines to improve revenueperformance in the face of increasing competition. It was obvious to the airlinesthat passengers could be divided into two broad categories, based on their travelbehavior and their sensitivity to prices. There business and leisure travelers.Business passengers tended to make their travel arrangements close to theirdeparture date and stay at their destination for only a short time. There was usually
Project Management 
little flexibility in their plans, and they were willing to pay higher prices for tickets.Leisure travelers, on the other hand, booked their flights well in advance of theirtravel date.They stayed longer at their destinations and had much more flexibility in theirplans. They would often decide not to travel rather than pay high fares, and flightsoften departed with empty seats.The challenge to the innovators of revenue management was to devise a plan thatwould make the empty seats at the lower fare while preventing passengers whowere willing to pay the higher fare from buying low-fare seats. Since low-farepassengers typically book in before higher fare customers, the revenuemanagement system must forecast how many business passengers will want tobook on a flight. Then it must set aside or protect these seats so that they will beavailable when the business passengers request them.Revenue Management is the process of analysing and forecasting consumerdemand in order to optimize inventory and pricing levels to maximize profitability.Fig 1 Process of RMIn other words, to constantly analyse and forecast the remaining demand for acertain future product or event and subsequently adjusting the pricing levels inorder to sell the
right product
at the
right price
to the
right customer
at the
to maximize profitability.It is important to note that Revenue Management addresses the revenue side of theequitation, not the cost side. There exists an inverse proportionality between LoadFactor (Units Sold) and Average Yield (Unit Revenue) and Revenue Managementwill thus find the optimum balance between these factors in order to maximiseRevenue or Income.
Analyse andForecastRemainingDemandOptimiseInventoryand PricingLevelsMaximiseProfitability

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