Corporate Strategy for British Airways

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Introduction

British Airways PLC

Flying an extensive route network of more than 300 different destinations in more than 70 countries, with nearly 250 aircrafts in service, British Airways is today the largest airline in the UK and the leader in terms of transatlantic flights globally. They are a group mainly based in Heathrow Airport, London Gatwick and Manchester, where they operate international & domestic scheduled air services for carriage of passengers, freight & mail.

In addition, British Airways is part of the oneworld alliance that together comprises 700 destinations. Founded in 1999, American Airlines, Cathay Pacific, Finnair, Iberia, Japan Airlines, Lan Airlines, Malév, Qantas and Royal Jordanian are also members of this association. The establishment of this kind of business partnership benefits customers expanding their access to a much wider network of destinations.

In terms of shareholding, for instance, the group has participation of 13.5% in the Spanish airline Iberia and 15% in Flybe. According to Key Note (2009), ‘other British Airways ventures include a 10% stake in Eurostar (UK) Ltd as part of the InterCapital and Regional Rail alliance. BA also operates a number of subsidiaries and franchises organisations, for example, British Airways World Cargo, BA Cityflyer and OpenSkies.’

BA’s financial overview defined by Key Note (2009) says that in the year ending in 31st March 2008, ‘British Airways PLC increased its turnover to £8.76bn from £8.49bn in 2007. Pre-tax profit increased to £922m in 2008 from £611m in 2007. In the year ending 31st March 2009, turnover was up to £8.99bn and there was pre-tax loss of £401m.’ The company’s annual report of 2009 describes in more details that 87.1% of this revenue is from passenger traffic, 7.5 % from cargo and 5.4 remains from other activities. The great financial results in the year that anticipated the credit crisis, a record of profitability in BA’s history, left the company in a good



References: British Airways (2009). Annual report 2009. Available at www.ba.com accessed on 25/10/09. British Airways (2009). Available at www.bashares.com accessed on 19/11/09. Clarke, E (2007), ‘Open Skies for Business’, CNN/ Travel, August 22, 2007. Datamonitor (2008) ‘British Airways Plc – UK – Feb 2008, Datamonitor. Drury, C. (2004), Management and coat accounting, 6th edition, Thomson. Key Note (2009) ‘Airlines’ – UK – July 2009, Key Note [Online]. Available at student.kingston.ac.uk/C2/E-Resources/default.aspx Accessed on 10/11/09. Kumar, N. (2006), Strategies to fight low-cost rivals, “Harvard Business Review”, Volume 84(12), pp. 104-111. EBSCOhost [Online] Available at : http://web.ebscohost.com/ehost/pdf?vid=2&hid=6&sid=e913bce9-341a-4a26-8bcc-34b4d765b944%40sessionmgr14 Porter, M (1980), Competitive Strategy: techniques for analyzing industries and competitors. New York: Free Press Porter, M (1998), The competitive advantage of nations Waters, D (2007), Supply Chain Risk Management: Vulnerability and Resilience in Logistics. |Market Growth in Forecast Number of Passengers uplifted by UK Airlines on Scheduled and Non-Scheduled Services (000), 2004-2013 | |[pic] |

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