British Airways - Business Report

BY
Syed Mohsin Ali
551162

SUPERVISOR
Sir. Zohaib Saeed

DEPARMENT OF MBA (Marketing)

KARACHI UNIVERSITY BUSINESS SCHOOL
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Executive Summary

British Airways is one of the International Airlines that provides its flights to 570

destinations in 133 territories. It mainly operates from the Heathrow and Gatwick. It faces many

problems like 531 million pounds’ loss in revenue because of lack of international market study,

employee relationship (strike problem) and many more. Hence an effective strategy is the only

chance to overcome these problems. The strategy of British Airways includes the innovation in

technological accessories, customer’s relationship, employee relationship, safety and security of

stake holders and so on.

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Table of Contents
Executive Summary..........................................................................................................................1

1. Introduction...................................................................................................................................6

2. Discussion and Analysis...............................................................................................................6

2.1 Business Strategy....................................................................................................................6

2.2 Leadership...............................................................................................................................7

2.3. Organizational Structure........................................................................................................8

3. SWOT Analysis..........................................................................................................................10

4. PESTEL Analysis.......................................................................................................................12

4.1 Political Factors....................................................................................................................12

4.2 Economic Factors.................................................................................................................13

4.3 Social Factors........................................................................................................................13

4.4 Technological Factors...........................................................................................................13

4.5 Environmental Factors..........................................................................................................14

4.6 Legal Factors.........................................................................................................................14

5. Marketing Strategy.....................................................................................................................15

5.1 7Ps of Marketing...................................................................................................................15

5.2 Segmentation, Targeting & Positioning................................................................................17

5.3 Marketing Communication Mix...........................................................................................19

5.3.1 Advertising.....................................................................................................................19

5.3.2 Sales Promotion.............................................................................................................20

5.3.3 Events & Experiences....................................................................................................21

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5.3.4 Public Relations.............................................................................................................21

5.3.5 Direct Marketing............................................................................................................22

5.3.6 Personal Selling.............................................................................................................22

6. Corporate Social Responsibility (CSR)......................................................................................22

6.1 CSR Programs and Initiatives...............................................................................................22

7. Recommendations.......................................................................................................................25

References.......................................................................................................................................27
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List of Figures
Figure 1: IAG Management Structure..............................................................................................9

Figure 2: British Airways Organizational Structure.......................................................................10

Figure 3: British Airways Revenues by Geographical Segment (in GBP millions).......................12

Figure 4: Structure of British Airways Corporate Responsibility Committee................................23

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List of Tables
Table 1: British Airways SWOT analysis.......................................................................................11

Table 2: British Airways Segmentation, Targeting and Positioning..............................................17

Table 3: British Airways CSR performance...................................................................................24

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1. Introduction

British Airways (BA) is the largest airline company in the UK and it flies globally to more

than 400 destinations to airports in nearly 80 countries. British Airways is a part of International

Airline Group (IAG) that also owns three other airline brands - Aer Lingus, Iberia and Vueling.

The Group also owns 13.55 per cent of the equity of IB OpCo Holding S.L. (“Iberia”) and

86.26% of the equity of Avios Group (AGL) Limited (“AGL”). IAG made a record profit of

£1,264 million in 2015. By the end of 2015, British Airways had 39,304 employees globally

(Lange et al., 2015). British Airways pursues service differentiation business strategy and

differentiates its services via an extensive reliance on digitalization and information technology

and high level of customization of service provision. These points represent solid sources of

British Airways’ competitive advantage.

Major weaknesses related to British Airways include an overdependence on the UK

market and low profitability of business operations. At the same time, the airline is presented with

the opportunities of forming strategic cooperation with other businesses in airline and catering

industries, further engaging in international market expansion and benefiting from synergy via

closer integration between IAG's operating airlines (Grundy and Moxon, 2013).

2. Discussion and Analysis

2.1 Business Strategy
British Airways is a premium segment airline and accordingly British Airways business

strategy can be specified as service differentiation. The airline aims to generate a return on capital

of a minimum 15 per cent with an operating profit margin of 12 – 15% (Madar, 2015). British

Airways business strategy focused on service differentiation is planned to be continued in the

following directions:

 Replacement or refurbishment of 99 per cent of wide-body aircraft by 2020

 Improvement of in-flight entertainment in-seat power and the rollout of on-board WIFI
 Further investments in digital technologies to provide personalised, seamless service
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British Airways business strategy also relies in international market expansion strategy in

an aggressive manner. In 2016 alone the airline company is expected to fly to more than a dozen

new routes, including Biarritz in France, Mahon in Menorca and Palermo in Sicily. The airline

also announced additional services from Heathrow and Gatwick to Krakow in Poland, Stockholm

in Sweden, Split in Croatia, Berlin in Germany, Olbia in Sardinia and Gibraltar (Bertillo and

Salando, 2013). British Airways competitive advantage is based on the following points:

1. The highest standards of service with a focus on service personalization.

2. The variety of choice is another important aspect of British Airways competitive

advantage. For example, in the World Traveller cabin, customers can choose from a wide

range of Taste of the Far East', 'Gourmet Dining', 'Taste of Britain', 'Great British

Breakfast', 'Healthy Choice' and 'Vegetarian Kitchen'.

3. Focus on digitalization and increasing integration of information technology into various

aspects of service provision and business processes.

2.2 Leadership
British Airways leadership reports to International Airline Group (IAG), its parent

company that also owns Aer Lingus, Iberia and Vueling. The Leadership Team is made up of the

Executive Directors and other key management personnel and is responsible for the day-today

running of the Group and discharging managerial responsibility. British Airways Chairman and

Chief Executive

Keith Williams was replaced by Vueling’s Chairman and CEO, Alex Cruz in April 2016. British

Airways Board of Directors comprises 10 members and each director overseas a specific aspect

of the business (Balmer, Stuart and Greyser, 2009).

IAG Chief Executive Officer Willie Walsh has previously served as British Airways CEO

and he had the greatest impact on the airline than any other CEO before or after him up to date.
 BRITISH AIRWAYS 8

Once nicknamed as ‘Slasher Walsh’ for his relentless drive to cut costs, Willie Walsh was also

known for his uncompromising stance in dealing with unions. Currently, IAG leader is in a

controversial dispute with the government over the lack of runways in Heathrow airport. Mr.

Walsh has threatened that “if the government continues to dither over a new runway, then I’ll

move my business elsewhere” (Kippelen et al., 2012). Moreover, British Airways leadership is

faced with a complex set of challenges that include intensifying level of competition from budget

airlines, increasing uncertainty in the business environment and the threat of terrorist attacks. The

range of initiatives implemented or being considered by British Airways leadership to address

these issues include the following:

1. Starting charging for meals in economy class on short-haul flights

2. Reducing the scope of expansion plans following attacks in Brussels in April 2016

2.3. Organizational Structure

Organizational structure of a business determines the manners of which the primary

objective of profit maximization is achieved. More specifically, organizational structure is the

reflection of roles and tasks of employees and the scope of their contribution to the achievement

of organizational objectives. British Airways is a part of International Airline Group (IAG).

Along with British Airways, AIG also owns Iberia, Vueling and Aer Lingus and the airline group

has the following structure:

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Figure 1: IAG Management Structure

British Airways organizational structure was subjected to certain changes early in 2015.

The company announced it would split its marketing team with part of the team joining the

commercial department and the other forming a new customer experience team, which focuses

solely on the travel experience. Such a pattern of restructuring is a clear attempt to place

marketing at the forefront of airline’s business strategy (Deye, N., Vincent, F., Michel, P.,

Ehrmann, S., Da Silva, D. et al., 2015). The latest pattern of British Airways organizational

structure before Alex Cruz took over as the new CEO from Keith Williams in April 2016 as

illustrated in the following picture.

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Figure 2: British Airways Organizational Structure

It can be argued that British Airways organizational structure may be subjected to certain

changes in the foreseeable future to reflect strategic changes to be introduced by the new CEO

Alex Cruz. Specifically, “the consensus at IAG is that Cruz has done a good job at Barcelona-

based Vueling, fending off budget rivals like Ryanair and EasyJet on routes around Europe” and

this is one of the reasons he has been appointed to lead British Airways (Zhang et al., 2015).

Accordingly, one can expect Alex Cruz will cost-cutting measures that may involve de-layering

of British Airways organizational structure.

3. SWOT Analysis

British Airways SWOT analysis is a strategic analytical tool that facilitates the analysis of

strengths, weaknesses, opportunities and threats related to the business. The following Table 1

illustrates British Airways SWOT analysis:

Table 1: British Airways SWOT analysis

Strengths Weaknesses
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1. Economies of scale due to its large size 1. Overdependence on the UK market

2. Strong brand image
3. Market leadership in the UK
4. High level of service digitalization and
effective integration of IT and internet
2. Low return on invested capital (ROIC)
3. Constrained capacity of Heathrow
4. airport
5. Lack of experience of the new CEO
Alex Cruz in leading the premium
segment airline

Opportunities Threats

1. Formation of strategic cooperation 1. Further intensification of competition

with other businesses in airline and 2. Terrorist attacks
catering industries 3. Service distuptions due to employee
2. International market expansion 4. strikes
3. Benefiting from synergy via Closer 5. Escalation of the conflict with the UK
integration between IAG's operating government
airlines
4. Improving relations with unions

3670, 32%

5498, 49%

2165, 19%

UK USA Rest of the world

Figure 3: British Airways Revenues by Geographical Segment (in GBP millions)

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4. PESTEL Analysis

The acronym PESTEL stands for political, economic, social, technological, environmental

and legal factors affecting businesses. Accordingly, British Airways PESTEL analysis involves

an analysis of the impact of these external factors on the airline.

4.1 Political Factors

British Airways is a major international airline that flies to more than 400 destinations

worldwide. Political stability and the perception of safety by the population is an important

political factor that has a tremendous impact on British Airways. A stark illustration of this claim

may refer to terrorist attacks at Brussels airport in March 2016, which caused the decline of IAG

share price, British Airways’ parent company by 1.5 per cent. Moreover, recently the airline

found itself to be engaged in a political debate for demanding a third runway at Heathrow airport

from the UK government. Specifically, “the boss of British Airways has warned he could seek to

expand the airline overseas if the Government "twiddles its thumbs" over a third runway at

Heathrow” (Si Xue, 2017).

4.2 Economic Factors

Certain economic factors such as the inflation rate, currency exchange rates and the

overall economic climate in the UK has direct and important implications on British Airways

performance. The cost of fuel is another significant economic factor for British Airways, since

the Group used approximately 5.7 million tonnes of jet fuel in 2015 only. For example, in 2015,

British Airways expenses on fuel decreased by £484 million, or 13.8 per cent compared to the

previous year despite the increasing scope of operations. Accordingly, a decrease of the prices of

fuel proved to be an important economic factor that greatly benefited the business. Moreover, a

there is a range of economic factors that have an indirect, yet significant impact on British

Airways revenues. For example, a rapid fall of oil prices during the last two years has resulted in
 BRITISH AIRWAYS 13

a drop in corporate customers on key oil routes, consequently causing a decrease in passenger

revenue of GBP 288 million, or 2.8% (Deye, N., Vincent, F., Michel, P., Ehrmann, S., Da Silva,

D. et al., 2015).

4.3 Social Factors

Certain social factors such as increasing integration and impact of social media into

personal and professional aspects of life do impact the business strategy of British Airways. An

important social tendency of the willingness to achieve an adequate work-life balance among

consumers in developed countries also has to be addressed by British Airways and other airlines

in an appropriate manner (Kippelen et al., 2012). British Airways is also greatly impacted by

additional range of social factors such as demographic changes, changes in consumer attitudes

and opinions towards travelling by air, media perception of the brand and health and welfare of

target customer segment.

4.4 Technological Factors

Generally, prominent technological factors that impact British Airways include industry-

specific technological innovations and breakthroughs, decreasing life cycle of technology,

changes in energy consumption practices, shifts in manufacturing maturity and capacity and

others. British Airways duly recognizes the importance of technological factors and commits to

relevant investments in a regular manner. For example, in 2015 British Airways launched its app

for the Apple watch (St. John and Malen, 2004). A simple swipe opens the British Airways app,

which was re-designed to fit the Apple Watch screen. It then displays a summary of the

customer's next flight, the flight number, route, departure time, flight status, a countdown to the

departure time and the weather at the destination.

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4.5 Environmental Factors

The performance of British Airways can be indirectly impacted by a set of ecological

factors such as global warming, air pollution, thickening of ozone layer and others. Moreover,

the impact of environmental factors on British Airways performance can be direct as well in cases

of environmental disasters such as earthquakes, flooding, tornados etc. It can be argued that

effects of environmental factors on airline business is greater compared to many other businesses

for evident reasons (Aydemir, 2012). Any corporation of a size of British Airways is expected by

stakeholders in general, general public and non-governmental organization in particular to behave

in a socially responsible manner and to illustrate commitment in dealing with a wide range of

environmental issues. Neglecting this expectation may result in damage to the brand image via

negative online and offline press coverage.

4.6 Legal Factors

British Airways is directly impacted by a set of legal factors such as trade regulations anti-

trust rules and regulations, data protection regulations and others. Additionally, there is a wide

range of rules and regulations relating to employee health and safety, consumer protection laws,

employment laws, and competitive rules and regulations that need to be adhered fully adhered by

British Airways. Changes in these rules and regulations are most likely to impact British Airways

performance in direct and indirect manner and in ways that are difficult to predict (‘AIRPORTS

AND SERVICES’, 2021)s.

5. Marketing Strategy
5.1 7Ps of Marketing

British Airways 7Ps of marketing integrates important elements of the marketing mix that

need to be addressed by marketing managers taking into account taking into account the

characteristics of the target customer segment. The most important elements of the marketing mix
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that consists of product, place, price, promotion, process, people and physical evidence. In

January 2015 British Airways announced that “will split its marketing department and bring the

unit closer to its commercial operations as part of a major restructure” (Knutsen et al., 2012).

Product: British Airways offers airline services of a premium segment. A high level of

service customization and the abundance of choice is one of the core advantages of the airline’s

competitive advantage. For example, in the World Traveller cabin, customers can choose from a

wide range of Taste of the Far East', 'Gourmet Dining', 'Taste of Britain', 'Great British Breakfast',

'Healthy Choice' and 'Vegetarian Kitchen'. Moreover, the airline’s service provision is associated

with a high level of digitization and an extensive integration of information technology. For

example, in 2015 British Airways launched its app for the Apple watch (Heiets, Spivakovskyy

and Spivakovska, 2019). A simple swipe opens the British Airways app, which was re-designed

to fit the Apple Watch screen. It then displays a summary of the customer's next flight, the flight

number, route, departure time, flight status, a countdown to the departure time and the weather at

the destination.

Place: British Airways flies to more than 400 destinations worldwide and it has the

greatest presence in Heathrow, Gatwick and London City airports. BRITISH AIRWAYS utilizes

online sales channel to sell its tickets and air tickers can also be purchased offline via sales agents

and other intermediaries. The range of sales support measures offered by the airline include the

possibility to hold flights and the price for up to 72 hours after the booking (Si Xue, 2017).

Price: British Airways pricing strategy can be described as differentiation. Accordingly,

the airline charges higher prices for its services compared to the budget airlines and its services

are perceived to be associated with higher quality. The company also uses promotional and

geographical pricing strategies in an occasional manner. British Airways pricing strategy also

integrates a discount structure, where Executive Club members are offered reward flights on

selected destinations (Lange et al., 2015).

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Promotion: British Airways uses a range of elements of the marketing communication

mix such as print and media advertising, sales promotions, events and experiences, public

relations and direct marketing in an integrated manner in order to communicate the marketing

message to the representatives of the target customer segment. The marketing message attempts

to associate the consumption of British Airways services with the perceptions of high quality,

safety, reliability and the abundance of choice (Grundy and Moxon, 2013).

Process: The range of processes critical to British Airways success include employee

recruitment and selection, marketing research, development of new routes, sales, customer

service processes and others. The company attempts to gain efficiency in relation to each of these

processes.

People: British Airways hires highly qualified professionals and crew members. Ability

to work under pressure and customer service skills are the major criteria for British Airways

employees. The airline employed 175 apprentices in 2015 on its 14 apprenticeship schemes

across the business, in professions ranging from engineering and operations, to IT, finance and

customer service.

Physical Evidence: refers to items related to British Airways brand recognition. These

include the words British Airways written in blue colour in its own unique font blue and red

ribbon as a part of its logo, blue inform of the cabin crew and others (Madar, 2015).

5.2 Segmentation, Targeting & Positioning

British Airways segmentation, targeting and positioning refer to ways in which the airline

company identifies certain individuals among the general public to offer their service packages.

Segmentation involves dividing population into groups according to certain characteristics,

whereas targeting implies choosing specific groups identified as a result of segmentation to sell

products. Positioning refers to the selection of the marketing mix the most suitable for the target

customer segment (Bertillo and Salando, 2013). British Airways follows multi-segment
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concentration marketing strategy by offering four different service packages to different customer

segments. Specifically, British Airways targets different customer segments for its four levels of

services: economy, premium economy, executive and first class. The following Table 2 illustrates

segmentation, targeting and positioning of each category of British Airways services:

Table 2: British Airways Segmentation, Targeting and Positioning

Target segment

Segmentation bases Economy Premium Executive First Class

class Economy Club

Domestic Selected Europe and Selected

Geographic Region flights in UK international international international

Europe and flights flights flights

international

flights

Density Urban & rural Urban & Urban Urban

rural

Age Kids, teenagers, Teenagers, Middle-aged, Middle-aged,

middle-aged, middle-aged old-aged old-aged

old-aged

Gender Male, female

Income Low Middle High High

Demographic Occupation Students, Students, Businessmen Businessmen

salaried salaried Professionals Professionals

Education High school Technical Master’s Master’s

Bachelor’s Bachelor’s Business Business

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schools schools

Social status Low, middle Low, middle High High

Family size Joint families Nuclear Nuclear Newly

families families married

Psychographic Lifestyle Moderate- Moderate Achievement Achievement

orientated orientated oriented oriented

Personality Easygoing Easygoing Determined Ambitious

Occasions Regular travel Vacations Business trips Honeymoon

Business trips

Benefits Affordability Value Luxury Luxury

Behavioural sought Convenience

User status Regular Regular First timer, First timer,

traveler traveler Regular Regular

traveler traveler

Attitude Indifferent Indifferent Positive Enthusiastic

positive enthusiastic

Customer Low Medium High High

expectations

Travel and Customer Neutral Neutral to Positive Highly

tourism image positive positive

industry base Trip Regular trip Recreational Business Business

descriptors Honeymoon
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Appropriate market segmentation, effective targeting and attractive positioning are critical

success factors for any business because no product and service can be equally valued by all

members of population due to the differences amongst population members in many levels.

In order to achieve long-term growth, it is important for British Airways to be concentrating on

enhancing value perception of its services by present and perspective customers within target

segment. Service value perception can be effectively increased by British Airways top-level and

marketing management by maintaining strategic customer relationships in relation to all segments

and application of creativity and innovation to many business processes (Balmer, Stuart and

Greyser, 2009).

5.3 Marketing Communication Mix

5.3.1 Advertising
British Airways uses print and media advertising as an important part of its marketing

strategy. In one of the most notable cases, in January 5, 2016, the airline took over all of the

advertising space in popular Time Out London travel magazine as part of an ambitious marketing

campaign. British Airways television ads are marked with appeal to basic and important human

emotions such as love, kindness and excitement. For example, ‘Fuelled by Love’ video clip

advertisement directed by Neeraj Ghaywan tells the tale of Helena Flynn, a flight attendant who

falls in love with India. “The ad is full of small moments of human kindness—from helping an

old woman put on her socks to inviting a stewardess in a strange land into your home and heart”

(Deye, N., Vincent, F., Michel, P., Ehrmann, S., Da Silva, D. et al., 2015). Importantly, British

Airways also sells its own advertising space on its online and offline platforms. The airline’s

online advertising platform is its official website ba.com, whereas offline advertising platforms

include traveller boarding passes and advertising spaces in 54 British Airways lounges

worldwide.
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Moreover, viral marketing is being increasingly integrated into British Airways marketing

strategy. The airline frequently taps into the sentimentality of many expatriates' desires to visit

their faraway homelands and families. Successful viral marketing campaigns ‘Visit Mum’ and

‘The Welcome of Home’ can be mentioned to justify this point.

5.3.2 Sales Promotion

British Airways uses sales promotions during festive seasons and other occasions.

Specifically, the airline uses the following forms of sales promotions:

1. Money Off Coupons: Various vendors, travel companies and websites such as

retailmenot.com, coupons.com, couponcabin.com and fyvor.com offer discount coupons

for British Airways travel tickets. However, British Airways does not offer coupons

directly from its official website.

2. Competitions: are used by the airline occasionally to allow participants to win free trips

to selected destinations. For example, a campaign ‘Inspire Us’ offered a chance to win a

European trip for two for helping the company to reinvent the humdrum holiday snap as

something unique and fabulous (Zhang et al., 2015).

3. Point of Sale Materials: such as posters, display stands and banners are used intensively

by British Airways in airports and other locations.

4. Loyalty programs: represent additional sales promotion technique used extensively by

British Airways. The airline offers various loyalty incentives to oneworld® airline's

frequent flyer programme participants and British Airways Ececutive Club members.

5.3.3 Events & Experiences

British Airways is famous for sponsoring and hosting various events and experiences that

promote specific products and promote brand image in general. The airline maintains a dedicated
 BRITISH AIRWAYS 21

page on its official website where terms and conditions of its sponsorship activities are

highlighted.

Recently, British Airways added films from the renowned British Film Institute, the Tate Gallery

and the Victoria and Albert Museum to our in-flight entertainment system, featuring some of the

earliest known film footage from life in the UK and short films offering intimate portraits of the

world’s leading artists and cultural figures (Kippelen et al., 2012). British Airways events and

experiences are aimed at increasing the level of brand awareness among the public in general and

the target customer segment in particular. Moreover, British Airways attempts to communicate

the brand value offer to the target customer segment in indirect manner.

5.3.4 Public Relations

Public relations can be defined as a “discipline which looks after reputation, with the aim

of earning understanding and support and influencing opinion and behaviour. It is the planned

and sustained effort to establish and maintain goodwill and mutual understanding between an

organisation and its publics”. British Airways had to deal with a severe PR issue in 2008

(‘AIRPORTS AND SERVICES’, 2021). Specifically, “The chaos at Terminal 5 has been an

unmitigated public relations disaster for British Airways. That the opening of the GBP 4.3bn

terminal beset by such problems was bad enough, but as the shambles unfolded the airline

seemed either incapable of or unwilling to answer even basic questions, such as how many flights

had been cancelled.” British Airways runs its public relations practices via online press releases,

annual reports, speeches and seminars. An annual CSR report is also used by British Airways as

an effective PR tool.

5.3.5 Direct Marketing

Direct marketing can be defined as “as a marketing strategy to build stronger, more

personal relationships between the buyer and selected customers directly”. In other words, in
 BRITISH AIRWAYS 22

direct marketing there are no intermediaries between the buyer and the seller in terms of

promotion and distribution. British Airways uses direct marketing component of the marketing

communication mix occasionally.

5.3.6 Personal Selling

Personal selling is “person-to-person communication with a prospective customer in order

to develop a relationship, identify customer needs, match goods/services with those needs,

communicate benefits to customers, and gain commitment to purchase goods/services that satisfy

customer needs”. British Airways does not personal selling component of the marketing

communication mix up to date (Heiets, Spivakovskyy and Spivakovska, 2019).

6. Corporate Social Responsibility (CSR)

6.1 CSR Programs and Initiatives

British Airways CSR programs focuses on the following three core areas:

1. Climate Action

2. Noise and Air Quality

3. Resource Management

British Airways SCR strategy relies on four primary risk management criteria when

measuring the impacts of environmental risks of business operations:

1. Risk impact
2. Probability
3. Velocity
4. Timeframe

British Airways Corporate Responsibility Committee chaired by non-executive director –

Gavin Patterson deals with the issues of sustainability and it is composed as illustrated in Figure 8

below:
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Figure 4: Structure of British Airways Corporate Responsibility Committee

The company releases Environmental Performance Report annually and it includes the

details of CSR programs and initiatives engaged by the company. Table 3 below illustrates

highlights from the latest report for 2015:

Table 3: British Airways CSR performance

Categories of British Airways Performance

CSR activities

Supporting local The airline is committed to minimizing the noise impact on local

communities. British Airways is working towards an overall reduction in

 BRITISH AIRWAYS 24

communities average noise per flight by 15 per cent by 2018 compared to 2008

Educating and The company has world class training academy full-scale cabin mock-ups,

empowering door simulators, a fire-ground and full height evacuation slides

workers British Airways’ Community Learning Centre has welcomed around

100,000 people since opening in 1999

Labour and The airline’s potential suppliers are required to complete Corporate Social

human rights Responsibility (CSR) questionnaire. This insures that their working

conditions complies with International Labour Organisation standards

Employee health The airline’s Safety Committee systematically ensures that appropriate

and safety safety

resources and procedures are in place

Gender equality No relevant information found

and minorities

Environment

a) energy British Airways is striving for 20 per cent reduction in energy usage by 2020

consumption compared to 2013

b) water No relevant information found

consumption British Airways aims to achieve 60 per cent recycling by 2015 at its main

c) recycling bases of Heathrow and Gatwick

d) CO2 In 2014 British Airways’ Greenhouse gas emissions were 18.6 million

emissions tonnes of carbon dioxide equivalent. The airline initiated Greensky London

project with the aim of achieving sustainable aviation fuel facility in the UK.

The company is aiming to achieve

Other initiatives Flying with Confidence course organized by BRITISH AIRWAYS has

and charitable helped more than 50,000 people to deal with their fear of flying

donations
 BRITISH AIRWAYS 25

7. Recommendations

On the basis of discussions and analysis above, the following recommendations can be

formulated to British Airways in order to address the current challenges faced by the business and

increase its long-term growth prospects:

1. British Airways strategic level management is recommended to introduce de-layering

initiatives by removing store section manager positions in order to save costs and increase

the flexibility of the businesses. It is important to note that the implementation of this

particular recommendation in practice requires significant changes within stores and the

management needs to address a potential resistance to change by explaining the necessity

for change to rescue the business.

2. British Airways is recommended to engage in international market expansion strategy in

order to reduce the current high level dependency of the business on UK home market.

Rapidly emerging economies such as China, India and former USSA bloc countries are

attractive markets where British Airways should focus on. Attractiveness of these markets

are associated with increasing consumer spending power in emerging economies, coupled

with market saturation in developed countries where British Airways traditionally

operates.

3. BA management is recommended to negotiate with its parent company, International

Airlines Group (IAG) with the aims of benefiting from synergy via achieving closer

integration between airlines belonging to IAG portfolio. It has to be specified that

although three are difference in business strategies pursued by each company belonging to

IAG - British Airways, Aer Lingus, Iberia and Vueling, nevertheless, there is much to be

gained via the integration of operations in multiple levels.

 BRITISH AIRWAYS 26

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