Study shows that British Airways or BA is considered as the flag carrier airline of United Kingdom. The firm is located in London (England), near the main hub of Heathrow Airport. In addition to that, this airline is considered as the second largest UK based carrier, which is based on fleet size as well as passengers carried apart from easyJet. In the year of 2011, the brand merged with Iberia, which helped them to form International Airlines Group or IAG. This is a holding company is registered or headquartered in Madrid, Spain. International Airlines Group is considered as the world’s third-largest airways group in terms of annual revenue as well as second largest in the whole European territory.
Due to effective business strategies, the concerned firm has been able to gain competitive advantages from the market that further enabled them to increase sales and gain higher profit margin. The brand has also been listed in the London Stock Exchange as well as in the FTSE 100 Index. It has been observed that British Airways is the first passenger airline that have generated approximately one billion dollars in their single air route. Even though, the firm was formed in 1974, yet they implemented appropriate business strategies and case study help that might have helped them to achieve their organizational goals. British Airways has been observed to manage two airline corporations such as British Overseas Airways Corporation & British European Airways apart from other two regional airlines such as Northeast Airlines as well as Cambrian Airways.
Strong brand image can be considered as a potential strength for British Airways that has helped them to increase sales and customer traffic for this brand in both short as well as in the long run. Even though, the brand was formed in 1974, yet with the help of appropriate business and promotional strategies, British Airways has been able to overcome potential drawbacks present in the external marketplace.
Studies show that British Airways has emphasized on becoming a sustainable brand with the help of corporate social responsibility approaches. In addition to that, the brand has also invested in expansion of their international network as well as towards improvement of technological factors for enhancing overall customer and employee experiences.
Technological strengths are yet another important factor for this brand to gain a competitive advantage from the market. British Airways has been able to optimise efficiency of business operations due to strategic focus. In addition to that, the parent company of British Airways named IAG, has invested in core data analytics, artificial learning as well as machine learning for enhancing customer experience.
One of the major weakness for this brand include Rolls Royce Engine. This is because, the engine generated many problems for this airway company during its operation. In addition to that, usage of this engine has been limited in many regions around the world. Use of this engine affected the aircraft availability due to which the airline had to reduce significant number of flights as well as seats.
Human resource management plays a vital role for any business hence, it is necessary for the firm to execute their business operations. In this case, it has been observed that British Airways faced major issues with their human resource management, which resulted in several challenges to this business.
British Airways is observed to rely massively over the sales in UK market for their revenue generation. In addition to that, the business is faced with economic instability due to outbreak of pandemic and political challenges due to Brexit. As a result, the overall sales or profit margin of this firm is highly affected, which can even impact their business operations in the long term.
Expansion of business in many sectors might help the company with higher revenue growth and brand growth as well. In addition to that, if the firm focus on including premium services at a moderate price range, then it might help them to attract high-end customers or investors towards this airline company.
Business expansion in the international market can also help them to gain significant advantages. Study shows that international markets help a firm to gain stability of their economical sources as well as it might also help them to increase customer traffic. Furthermore, if an airway company have focussed on business expansion, then the concerned firm might be able to enhance their overall rate of business growth to a huge extent.
Sudden outbreak of pandemic has created major impact on the airline business resulting in temporary shutdown of the airline businesses. In addition to that, the firm is also faced with challenges due to travel restrictions in various regions that even might cause economic instability to this business both in short as well as in the long run.
Stiff market competition due to higher customer demand and favourable external business factors might create negative influence on their profit margin. In addition to that, British Airways might witness higher promotional expenses due to this competition.
Brexit has also caused several economic uncertainties due to which it might cause significant drawbacks for the businesses operating in this territory. In addition to that, the brand might be faced with potential disadvantages from the market due to change of regulations in the custom laws and immigration laws. As a result, it might create economic loss for the business and might also alter the overall business operations.
Political factor: Study shows that political factor plays an important role for a firm regarding its business operations. In addition to that, it is a central role for the overall aviation industry, which helped many firms to gain higher customer traffic from the market. Other than that, the airline industry is affected to a certain extent because of different government policies in various leading aviation markets. The aviation industry in United Kingdom is highly affected by the regulations including operator licensing, safety regulation, personnel licensing as well as traffic lights.
Economic factor: It has been observed that economic factors as well as economic changes might create a direct impact over the business operating in airline industries at United Kingdom. In addition to that, the economic slowdown might also create a negative impact on this firm in the long run. A major setback for this business is Brexit and overall political instability that might increase potential challenge for this business. Another study shows that the airline brands had witnessed a steady growth of 6.1% as compared to the previous year (2019) reaching for up to 13,021 million dollars rising from 12,271 million dollars in the fiscal year of 2017. During that year, the airline brands also gained a huge operating profit of 1952 million increasing from 1769 million dollars.
Social factor: It has been analysed that social factor such as demographic changes play a vital role in a business, which also helps a brand to gain significant growth of customer traffic or sales in the market. Apart from demographic changes, social image of a brand is also important for a brand for enhancing their overall sales in the target market. Due to human resource challenges in the concerned firm, British Airways witness loss of brand image, which can negatively impact the sales both in short as well as in the long run.
Technological factor: Technological advancements is considered as a central factor for driving growth in the airline industry as it might help in enhancing rate of customer traffic as well as with business expansion. In order to gain a competitive edge in the market, British Airways have emphasized on data analytics and also developed their official application that will enhance the chance of customer experience. Other than that, the IAG Group, (which is the parent organization of British Airways) expanded their business in cargo handling, automation as well as onboarding among many others.
Legal factor: Legal factors for the airline industry in United Kingdom is studied to be highly favourable as it might help them to expand their business and also gain a competitive edge from the market. In addition to that, several laws, which govern the entire airway industry of UK might be influenced by Brexit and other political factors where the British Airways can witness lower customer demand in the domestic market. Post Brexit, the laws are regulated under EU regulations where the labour laws are prime focus. The concerned company is required to follow strict guidelines in UK.
Environment factor: Airline industry is highly influenced by the changes or rising customer demand around the world. In addition to that, British Airways is also influenced to minimise the environmental impact in their business model for increasing overall rate of sustainability. Furthermore, it has been observed that sustainability is considered as the core areas of strategic business that aims to invest in developing fuel efficiency of their fleet as well as reduction of the carbon footprint. Study shows that the parent company or IAG, has emphasized on improving overall rate of carbon footprint to zero.