Study shows that British Airways or BA is considered the flag carrier airline of the United Kingdom. The firm is located in London (England), near the main hub of Heathrow Airport. In addition to that, this airline is considered the second largest UK-based carrier, which is based on the 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 the International Airlines Group or IAG. This is a holding company registered or headquartered in Madrid, Spain. International Airlines Group is considered the world’s third-largest airways group in terms of annual revenue as well as the 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 margins. The brand has also been listed on 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 has generated approximately one billion dollars in its single air route. Even though the firm was formed in 1974, it implemented appropriate business strategies and case study help that might have helped them to achieve its organizational goals. British Airways has been observed to manage two airline corporations such as British Overseas Airways Corporation & British European Airways apart from the other two regional airlines such as Northeast Airlines as well as Cambrian Airways.
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A strong brand image can be considered 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 becoming a sustainable brand with the help of corporate social responsibility approaches. In addition to that, the brand has also invested in the expansion of its international network as well as in the 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 in the market. British Airways has been able to optimize the 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 weaknesses of this brand includes 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. The use of this engine affected the aircraft availability due to which the airline had to reduce the significant number of flights as well as seats.
Human resource management plays a vital role in any business hence, it is necessary for the firm to execute its business operations. In this case, it has been observed that British Airways faced major issues with its human resource management, which resulted in several challenges to this business.
British Airways is observed to rely massively on sales in the UK market for their revenue generation. In addition to that, the business is faced with economic instability due to the outbreak of the 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 to 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 in their economical sources as well as it might also help them to increase customer traffic. Furthermore, if an airway company has focussed on business expansion, then the concerned firm might be able to enhance its overall rate of business growth to a huge extent.
A sudden outbreak of the pandemic has created a major impact on the airline business resulting in a 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 the short as well as in the long run.
Stiff market competition due to higher customer demand and favorable external business factors might create a 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 which might cause significant drawbacks for the businesses operating in this territory. In addition to that, the brand might be faced with potential disadvantages in the market due to changes in regulations in customs laws and immigration laws. As a result, it might create an 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 in 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 the United Kingdom is highly affected by 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 on the business operating in airline industries in the 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 the 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 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 analyzed that social factors such as demographic changes play a vital role in a business, which also helps a brand gain significant growth of customer traffic or sales in the market. Apart from demographic changes, the social image of a brand is also important for a brand for enhancing its overall sales in the target market. Due to human resource challenges in the concerned firm, British Airways witness a loss of brand image, which can negatively impact sales both in the short as well as in the long run.
Technological factor: Technological advancements is considered a central factor for driving growth in the airline industry as it might help in enhancing the rate of customer traffic as well as with business expansion. In order to gain a competitive edge in the market, British Airways have emphasized data analytics and also developed its 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 its business in cargo handling, automation as well as onboarding among many others.
Legal factor: Legal factors for the airline industry in the United Kingdom are studied to be highly favorable as they 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 the UK might be influenced by Brexit and other political factors where British Airways can witness lower customer demand in the domestic market. Post-Brexit, the laws are regulated under EU regulations where labor laws are the prime focus. The concerned company is required to follow strict guidelines in the UK.
Environment factor: The 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 minimize the environmental impact in their business model for increasing the overall rate of sustainability. Furthermore, it has been observed that sustainability is considered the core area 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 improving the overall rate of carbon footprint to zero.