Airways has its strengths in economies of scale, which gives it a big advantage
over other operators. It is derived from a large parent company, the
International Airline Group, which also owns and manages other airlines,
including Aer Lingus, Vueling and Iberia. The parent company operates a precise
and effective network of operations on the domestic and foreign scale that
British Airways uses. The economies of scale allow British Airways to enjoy
effectively reduced costs of each operation. As a result, the British airlines
in 2016 also won the award for a business traveler for the best short-distance
runner (Otley, 2016).
The IT and Internet revolution with various
processes and the high level of digitization constitute a solid basis for the
competitive advantage of British Airways. As emphasized by CEO Alex Cruz to
innovation in British Airways, it is necessary to use a digital boarding pass
for over 28,000 customers a day or to run applications for Apple Watch for
faster checking at airports (Newton, 2017).
The airline can also boast an excellent Business Class with a flat bed and
matching and comfortable seats in the economy class as well. A strong presence
on the Internet is the basis for a company providing high-quality services
British Airways has a strong trade union
that was created for the correct interests of employees such as adequate
remuneration, good conditions associated with the placement and fair treatment
of employees by the Company regardless of ethnicity or back. Bearing in mind
that trade unions can bring positive changes to the company, especially if its
efforts result in employee satisfaction and increased productivity, this is
more often the responsibility towards BA resulting in frequent protest actions
that harm and damage BA operations, income and the image and reputation of the
company in this process. Although it may not be possible to reduce the strength
of the union, it is prudent for the Company to establish good relations with
trade union leaders and maintain a good relationship with them. For this
purpose, the company needs to employ people with strong negotiating skills. The
company must also have a pro-client policy, and if it has one, it must maintain
it. The company must treat employees honestly and with integrity and employees
must be rewarded honestly to avoid the problem between the company and the
It seems that the growth of British airlines is
disproportionate to domestic short-haul flights because the company is very
competitive on the domestic market more than on the international market which
may not help its continuation in the future. Uneven competitiveness of the
Company is reflected in the revenue indicators between domestic and
international operations, in which revenues from domestic operations accounted
for in 2016 over 50% of the total revenues of the Company (Bhasin, 2016). This
is not good for a company that can boast global growth.
The third sector approved at Heathrow is a great
idea for BA. Thanks to this proposal, new and affordable additional
opportunities will be created at Heathrow. It will also reduce the costs of
servicing Heathrow Airport. What’s more, the Heathrow expansion after Brexit
will allow carriers such as BA to offer more direct flights not only to
destinations in the UK.
British Airways recorded a 65% annual profit due
to low fuel costs. The low price of oil has helped the aviation industry over
the last year, increasing even European airlines that have so far fought,
strikes and increased competition from the Middle East and budget rivals
(Powley, 2016). British Airways maintained that it no longer uses fuel
subsidies for flights outside of Great Britain (Jamieson, 2018).
By Brexit BA can lose many international flights.
EU Brexit negotiators have taken a firm stance on aviation which would
drastically reduce UK aviation rights (Gerrard,
2018). As far as the economic impact of Brexit is concerned, it
will bring the United Kingdom economic shock, including weaker currency, and
slowdown in economic growth, investment and economic decline in airline
operations. Considering the inherent uncertainty as to the course of Brexit
negotiations, IATA and Tourism Economics model the impact of three different
Brexit scenarios from “hard” to “soft”. In all three
scenarios, traffic between the UK and the EU has the biggest impact on air
traffic (Iata.org, 2017).
Traffic Controller (ATC) strikes to France in 2016 and in March 2017 contributed
to massive international cancellations and internationals delays for British
Airways. Strikes in 2017 was based on “poverty pay” (Munbodh, 2018).
Employees also started to make accusations against the company and their
financial situation since joining the BA caused “stress and
strikes do not serve the company, they make a big loss. British Airways knows
it well back to strikes in 2010, the company lost a record of £ 531m loss (Milmo, 2010).
The PESTLE analysis show six key factors which
can affect the business decision.
Airways is an important international airline that flies to over 400
destinations around the world. British Airways is considered a high standard
airline. Political stability in countries where people are happy to travel to
visit their families the perception of security by the population is an
important political factor that has a huge impact on British Airways. A harsh
illustration of this claim may refer to terrorist attacks at Brussels Airport
in March 2016 or Paris attacks in November 2015. This resulted in a 1.5% drop in British
Airways share prices (IATA, 2016).
Some of the economical
facts have impact for the results of British Airways. All the advantages of
companies. One of the most important factors for BA is the cost of fuel. For
example, illustrate how it looks and works with the company. Every year BA
gives a statement in which he shows that he used less fuel and the main goal
for the next year is to save even more. In 2015, the Group consumed
approximately 5.7 million tonnes of aviation fuel, so in 2015 British Airways
spent GBP 484 million on decrease, or 13.8% compared to the previous year,
despite the growing scope of operations.
there are a number of British Airways’ revenues. There are many factors,
however combining gives you losses or profits.
has a strong and solid brand image for many years. There are awards
and awards that BA collects every year. An example of this can be that in 2016
British Airways won the Business and Consumer Super brands awards for the
second time in a row – the first company that ever done. In 2015, British was
named the best short-distance and long-distance haul airlines. There over Independent
has awarded British Airways the title of the best European airline (Rodionova, 2018). BA has been a
strong image for several years and proofs and indicators can be rewarded each
year which gives the company many benefits on different surfaces.
Airways became the first airlines in the world to introduce high-tech remotely
controlled devices. This technology aims to push the aircraft away over its
short term. The airline is modernizing its clients and showing new strategies. In
cooperation with Heathrow, Mototok environmentally friendly tugs will allow
British Airways to provide more effective stress and help BA. The airline is
the first such operator that implements such devices on many airplanes. The
equipment used to carry short-term Airbus aircraft replaces traditional diesel
tugs and allows remote control of one pilot. Another big plus is the lack of
exhaust emissions and capable of precise aircraft transfer, five Mototok are
currently working in Terminal 5. They were included in the operation in August,
and over 100,000 customers have already benefited from smoother departures.
Airways plans to launch Mototok as part of a short-haul operation by the end of
the year and is considering the possibility of introducing a technology that
will push the long-haul aircraft off in the future.
electric accumulator can hold the load for up to three days and the charging
points will be installed on each of the 25 stations at T5 Heathrow (British
also has a WIFI offer when traveling by plane. This service was introduced on
board the aircraft in 2017. British Airways confirmed the price for a new Wi-Fi
service on a plane during a trip that was implemented for the carrier B747. BA
already had one Boeing jumbo equipped with technology and another one was
installed in July 2017. Access is available in a total of six options, with two
connection speeds. Customers can choose an access time of 4.99 £ (Caswell, 2017).
Airways has announced plans to reduce the amount of carbon dioxide emissions per
passenger on flights due to earlier criticism of the company. The global
agreement on CO2 emissions from aviation is the only way the industry can
continue to meet demand sustainably. Earlier, however, the sector has been
criticized by ecological groups for slow progress in developing an
international carbon pricing mechanism, lobbying for further expansion of
airports and counteracting regional market-based mitigation mechanisms, such as
EU aviation considering emissions trading system (ETS) (Timperley, 2016). Fuel efficiently
is very important for BA due to the commercial perspective as well as the
environment. In 2014, a special team was created which deals with air and
network operations as well as with engineering surprise. BA has implemented new
aircraft that burn less fuel and recycle less. Specialists have also
implemented over 41 fuel saving initiatives which helped save 83,000 tons of
fuel and cut CO2 emissions by 261,500 tons (ING, 2017).
belong to trade unions which each time support and support employees who strike
with high frequency.
repeats their strikes very often and is supported by trade unions. In July 2017
The crew of the British Airways line has carried out another round of strikes
in a long-running dispute over remuneration. Employees claimed that they do not
receive adequate remuneration and wanted an increase in salary and a better
employment contract (Levin, 2017).
In 2010 came
the next serious strike. There is no doubt, however, that the strike, which
began after the final collapse of talks between the BA directorate and the
Unite trade union, will cause huge confusion at airports and will thwart travel
plans for thousands of people. British Airways, which employed approx. 12
thousand Cabin crew members planned to save about 62.5 million pounds a year
(almost 100 million dollars) to cope with the decline in passenger numbers, the
increase in fuel prices and the increasing competition from other carriers. The
savings plan provided for the freezing of wages in 2010, the transfer of around
3 thousand. employees with full-time jobs and reduction of cabin personnel on
long distances (Milmo,
In 2017 British Airways cabin
crew had a two-week strike due to low and inadequate remuneration. Up to 2,000
members of the mixed BA fleet was expected to join the next. New members of the
crew got worse contracts, worse conditions and salaries. They were also
punished for this and took part in previous strikes. Members of the Unite union
rejected the contract, which included bonuses and travel profits, which were
halted by the crew, which took action earlier in the year (Topham, 2017).