British Airways Operation Management - Case Study Example

BA Operation Management College Introduction Operations management is a section of commerce relating to goods and services production, and engrosses the task of guaranteeing business processes are effective. The efficiency in utilizing as modest resources as feasibly possible as well meeting the client needs is the major purpose of operations management. It is mainly involves overseeing the process which transforms inputs to outputs. Inputs are in the form of labor, energy and materials, while the outputs are goods and services. Operations usually refer to the production or manufacture of goods and services in separate, even though the separation between the production of goods and the production of services is largely hard to make since producers are more likely to combine offering for products and services. In broad-spectrum, Operations Management endeavors to enhance the substance of value-infused ventures in a particular process. Essentially, the value-infusing resourceful ventures ought to be combined with market prospect for the best possible business performance. Traveling is in the contemporary world a major element or part of an institute's management. Based on this, major airlines constitute a vital importance in the achievements of enterprises or institutions around the globe. Enterprises are capable of widening their markets by journeying to various regions by means of airlines. The significance of airlines informs this essays' appraisal of British Airways public limited company in the present fiscal environment. It guides us to appraise their overall business plans and strategies in a bid to improve their management. This essay aspires to discuss the operations management of the British Airline and evaluates its efficiency in the Airline industry. British Airways is the biggest airline company in the United Kingdom. It has comparatively many flights across the Atlantic Ocean than any other airline and makes in excess of 550 trips to 130 or more countries internationally. Operations management British Airways is in possession of a U.K Civil Aviation Authority, Type A Operating License, and is authorized to transport air travelers, consignment and airmail on planes at least 20 seats. British Airways has large and modern fleets in operation comprising Boeing 747-400, Boeing 777-200, Boeing 767-300, Boeing 757-200, Boeing 737-400 and the Airbus A391/ A320/ A321. It as well has CityFlyer fleet (RJ100) and OpenSkies Boeing 757-200. The British Airways offers various flight classes for the passengers. It offers the First class service, the Business class (club world and club Europe), The Premium economy class (World Traveler Plus) and the Economy class (World Traveler, Euro Traveler and UK Domestic). The airline operates assorted kinds of lounges for travelers using premium cabins and clients with class. The Concorde Room in The JFK New York Terminal 7 was revamped to similar standards as the one at Heathrow's Terminal 5A. The Galleries First lounges replaced the previous First Lounges. The Galleries Club lounges as well replaced the Terraces and Executive Club lounges. At the airports that British Airways does not run departure lounges, the airway provides "third party" lounges for first-class travelers. British Airways runs the British Airways World Cargo. The Subsidiary cargo handling facility has worldwide freight prospects that avails the British Airways World Cargo the opening to provide service to shipment destinations not accessible in the normal passenger routes. The Airline also offers flier programs for its customers, the Executive Club being its major programme. Affiliate passengers get full access to lounges and reservation lines. The other programme is the Premier programme that offers relatively more benefits to subscribed members, and the British Airways board signs up the members of this scheme. Problems British Airways is experiencing considerable fiscal meltdown. Its revenue nose-dived by a gigantic 20 percent. The high yield and exorbitant dependency on huge fares is a business model giving the British Airways executives a hard time corroborating. It is therefore no shock that the airline chose to postpone the deliveries of A380 until 2013, 4 months subsequent to a previous postponement. Last months Year over Year (YoY) figures underlined the crises British Airways is facing; that is prior to considering the staff union preparing for major industrial action. Despite pulling Available Seat Kilometers (ASKs) down to almost 6 percent and 23 percent for Asia and North America, just the latter demonstrated affirmative revenue rise whereas Asia still suffers erosion of yield. The yield erosion in Asia continues to devastate income for virtually every main full carrier of service internationally. When yield deterioration is analyzed, it is frightening that British Airways union leaders would push for a major industrial action (Manuel & Miguel p. 133). The disturbing aspect of British Airways figures is as well the fuel expenses. In spite of being down almost 18 percent, the LBT of 292 million pounds makes one question where the error is, and in what sector the airline is losing funds. BA might argue that the airline's premium traffic falls are comparatively better than The Air Transport Association (IATA) averages, however if a dissection of the figures is performed, more than ten percent yield declines in BA's routes to Asia is revealed. This is becoming a major burden to the airline. Asia is a region where the new BA's A380s are to be deployed; it is an area that has witnessed the majority of the A380 orders that were previously booked being postponed. Bearing in mind that A380s are most vulnerable to changes in yield, then the airplanes cannot and will not cope at 65 percent. The other major problem with British Airways is disparity in the salary remunerations. The BA cabin staff is divided into three major clusters. The Worldwide crew that is based in Heathrow airport, another crew in Gatwick and the Eurofleet crew in Heathrow. The three crews earn hugely disparate incomes. The airline's figures confirm the service director for Worldwide cabin Heathrow earning 66,000 pounds annually, the figure includes 20,000 pounds for allowances. Even though people may say that nothing is wrong with the disparity, it is demoralizing for the company's senior crew at Gatwick, who perform the same tasks but earn relatively less, as it also does for those in the Eurofleet cabin. The airline also suffered a major public relation nightmare when a passenger traveling aboard a British Airways plane lost his luggage in a high-profile circumstance. Action plan The top management at the British Airways needs to come up with proper means of addressing staff unrest. There have been considerable threats by the union leaders of an impending industrial action. This would possibly mean a looming strike by the workers; a scenario that would greatly devastate the financial well-being of the airline. Earlier in the year, the staff at the airline opted for a pay cut to survive the global recession that had devastated the airline industry. Other even offered to work without pay. Salary negotiation mechanisms at the company should be reinforced to give the staff an opportunity to air their grievances in a manner that is ethical. The disparity in the remunerations among the cabin crews at different terminals must as well be addressed. Offering to pay all the employees of equal ranks analogous allowances fosters equality. Tightening security at the airport and vigilant surveillance of passenger luggage is a major area in boosting the reputation of the airline. In April this year at an Eastern District in New York, a passenger sued the airline for losing his luggage. This occurrence, together with other miscellaneous cases of mishandled luggage, gravely undermines customers' confidence in the airline as a reliable transportation agent. According to the airlines policy and regulations, a passenger is only reimbursed in cases where the airline loses 50 percent of the traveler's luggage. A survey by the Times Online in fact revealed that British Airlines loses more customer luggage compared to any other airline globally. From the survey, it was established that the airline was twice as more likely to misplace a luggage, compared to the other international airlines, and had lost an average of roughly 27 traveling bags for every 1000 passengers. This calls for a concerted effort by the luggage surveillance staff. Flight cancellation in most instances associated with luggage loss and misplacement. Chronic flight cancellation causes chaos in the luggage handling sections of the airports. Most of the time flights are cancelled or delayed, it is because of a plane developing engine problems. Whereas last minute engine failures are pardonable, laxity in the part of maintenance engineers is grossly unethical and dangerous. So far, no verifiable assertion has been made as to the delays and cancellation of flights by British Airways being caused by laxity in the side of airplane maintenance engineers. Nevertheless, the rate of flights being cancelled due to technical hitches calls for a comprehensive evaluation of the causes, to reduce the occurrence of such instances. Service of the machineries in the airport must be done carefully and within time (Manuel & Miguel p. 134 ). The airline should extend e-mail communications to its staff that totals to in excess of 20,000 field workers internationally. These employees include cabin crewmembers, the flight crewmembers, luggage managers, airport check-in personnel and the agents of freight cargo. While the e-mail communication service is greatly utilized in the human resource department, it application in the coordination of movements in the airport and between airports is invaluable. Communication is an imperative aspect of any business organization and is additionally significant in the airline industry, considering the nature of the current terrorist threats. Communication between staff in watchtowers is important for safe synchronization of plane arrivals and departures. Conclusion The position of British Airways in the transport field is a vital aspect for many commercial institutions. It is essential to conclude that the airline company should endeavor to advance their systems and improve their innovations as their approaches of expanding the company. This is in agreement with the airline's intentions of boosting their annual profits and for providing superior services to travelers. With enhanced delivery of services, the airline could cover ground in bid to maintain a globally recognized status. With good objectives like reducing the instances of cancelled flights through devoted engine maintenances, better communication among staff members, vigilant surveillance of passenger luggage and thrashing out staff unrest amicably, the company will attract many clients and guarantee better services clients and staff. Bibliography Manuel, L. J. & Miguel, L.L (2009). Journal of Air Transport Management [Online] (14)3, 143-145. 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