British Airways - Assignment Example

British Airways Running head: THE POSSIBLE FUTURE OF BRITISH AIRWAYS The Possible Future of British Airways in APA Style Name of Student Name of University British Airways 2 We live in a modern society that is extremely dynamic especially due to technology. With the addition of the Internet and technology, the demands and challenges of the corporate world requires companies to develop product/process innovations and new production/technological developments. This is crucial in meeting the ever-changing demands of consumers. British Airways is the largest airline in the United Kingdom. It has been the leader in innovations. Summerfield (2005) reports an innovative way that the airline allows its staff to be involved in the decision making process, "British Airways' learning division has used to promote organizational values is its 'Owning Our Future' program, which every employee across the enterprise-from in-flight crews to customer service staff-must go through at some point. Summerfield quotes Windeatt (n.d.), "It's about helping people understand the business direction, the environment that we're operating in and the way we're positioning ourselves in the business. By understanding that, they'll understand the actions we're taking in driving the business forwardWe really like this concept of our own people leading the business discussion." British Airways must also use innovative products and processes in order to deal with the negative aspects of business. For example, its merger with American Airlines did not pass the airline regulatory board, which caused a $330 million loss in the year 2000. Loss of international market share, terrorists' attacks, hijacked planes, etc. forced the company to meet the demands and develop innovative products and processes. (Sachdev, Dodge, and McSurely, n.d.) Innovative premium products and programs were part of the process to reverse the monetary, market share, and criminal (due to terrorism) losses. As with other companies who want to keep up British Airways 3 with the ever-changing world, British Airways had to implement innovations that would prevent, minimize, and counteract the demands that they were facing. Some of the innovative programs that offered improvements to cater to the premium class. As stated by Sachdev, Dodge, and McSurely (n.d.), the innovations that were implemented include "the Club World 'lounge in the sky,' which in certain major airports (e.g., Heathrow) provided passengers with the comforts of a home (e.g., private showers, toiletries, valet service, message, mini gym, etc.). Additionally, the business class passengers would get the comforts of flying beds during their flight (horizontal adjustable beds)." These innovations led to a market share increase of five percent. An increase in income, quality of life, social factors, and mobility has increased the number of air passengers. Easier bookings and reservations, discounted pricing, and convenience are advantages that have been provided to consumers via technology and the Internet. With these advantages also come disadvantages in the current global marketplace. The cost of labour, maintenance, fuel, etc. also produces demands on British airways. The market is intensely competitive; hence, the airline must employ innovative tactics in order to manage the dynamic industry. It uses the Internet to sell tickets and to develop its marketing environment. British Airways also focused on their human resource and its relationship with employees. A psychological contract and reward system are two main targets. British Airways Waterside (1994-2002) reports that, "British Airways wanted to change the way they did business by introducing some new working practices. Among the things they set out to achieve were streamlined communications, minimizing paper and working more effectively as a team. In order to achieve these objectives a comprehensive educational program was designed. This British Airways 4 was initially developed for the occupants of Waterside, but the long-term intention is to roll out the program to the global BA population." As with most companies, the airlines must meet the demands of expenses and cutting costs. Pollock (2006) reports that BA had to cut pension costs as he quotes Williams (n.d.), ""We are keeping a final salary scheme while some other companies have abandoned theirsWe're also protecting current pensions with the changes only relevant to future service." However, to implement this, new membership will be at a higher price. The airline paid 350m. According to the article, at the time of publication, if the new plan can be implemented, the promised payment will be to top-up the fund with a one 500m payment. British Airways Plc (2005) lists British Airways' 2005 key numbers to give an idea of income, sales, growth, etc.: Fiscal Year-End March Sales in U.S. Dollars (mil.) 14,765 (2005) One-year % Growth in Sales 6.0 (2005) Net Income in U.S. Dollars (mil.) 474 (2005) One-year % Growth in Net Income 97.5 (2005) Number of Employees 51,939 (2004) One-year % Growth in Number of Employees -8.9 (2004) Some organizational structure developments included making the delivery of their products and services seamless as in the past various jobs/tasks were spread throughout different locations. The jobs/tasks were also performed differently and the procedures were not the same. Reorganising British Airways 5 the leadership and placing a focus on efficiency and customer service required the airline to a process, or procedural, of doing things. Departments were combined. For example, the sales and account departments were combined into one. Bringing the bits and pieces and tying them together in order to deliver seamless customer service was the goal for these new developments in the organizational structure. There are many studies and research available regarding British Airways' new development in organizational structure. The aims and objectives of each research vary to some degree. However, they all seem to have the common goals that are listed by Company Profile - British Airways Plc (2006): Provides a charts to evaluate snapshot version of the company's performance, through its financials and the company growth trends. It offers key company data and analysis vis--vis to the major industry players. This information is vital from the point of estimating business strategies of the company and facilitate in decision-making process for the investors. Provides key financial information of the company, sales and product ratio, revenue and income trend, stock performances for the most recently ended quarter, financial year across businesses, and product/service categories. Tracks major M&A trends and developments undertaken in the current fiscal year to get a better understanding of company's growth strategies. British Airways 6 The report identifies and analyzes the company's strength and weaknesses to come up with the possible opportunities for the company. The report comments on the company's outlook for the forthcoming periods both on strategic and financial point of views. Supplemented with graphs and tabular information on the key industry players, overall financial and market performances, list of products and services, and company's share performances. In conclusion, being the top airlines in the United Kingdom requires keeping up with the dynamic and competitive environment. The only way to do this is to implement product/process innovations and to keep the organizational structure at par to meet the demands of the customers and the marketplace. This will keep British Airlines number one and keep the company flying! British Airways 6 References British Airways Plc (2005). Smart Brief, Inc.: 1999-2006. Retrieved April 22, 2006, from http://www.smartbrief.com/news/aia/companyData.jspcompanyId=3858 British Airways Waterside gets off to a flying start with hp education (1994-2002). Hewlett-Packard Company 1994-2002. Retrieved April 22, 2006, from http://education.hp.com/edconsulting/britair.htm Company Profile - British Airways Plc (2006). MarketResearch.com: 2006. Retrieved April 22, 2006, from http://www.marketresearch.com/map/prod/1219647.html Pollock, I. (March 23,2006). British Airways to cut pension costs. BBC News. Williams, K. Retrieved April 22, 2006, from http://news.bbc.co.uk/1/hi/business/4837872.stm Sachdev, H., Dodge, H., and McSurely, H. (n.d.). British Airways Dilemma. Retrieved April 21, 2006, from http://72.14.203.104/searchq=cache:CYg9Se67mK0J:nacra.net/nacra/abstract02/marketing2002.doc+British+Airways+product+process+innovation&hl=es&gl=mx&ct=clnk&cd=8 British Airways 7 Summerfield, B. (2005). British Airways: The Wings of Learning. Chief Learning Officer: Solutions for Enterprising Productivity. Media Tec Publishing, Inc.: 2006. Retrieved April 22, 2006, from http://www.clomedia.com/content/templates/clo_article.asparticleid=1026&zoneid=9 Read More