British Airways - Strategies for Maintaining Critical Activities and Dependencies - Case Study Example

Names : xxxxxxxxxxx Institution : xxxxxxxxxxx Course : xxxxxxxxxxx Title : Business Continuity Management Tutor : xxxxxxxxxxx @2010 Table of Contents Business Continuity Management 3 British Airways 3 Introduction 3 Private Limited Company (Shareholders) 4 Critical activities and an assessment of maximum tolerable period of disruption 5 Time recovery objectives 6 Critical dependencies 7 Strategies for maintaining critical activities/dependencies 8 Use of online technology to reduce operational costs 8 Ticket less travel 9 Paperless operations 9 Critical dependency monitoring arrangements 9 Corporate responsibility 10 Plan invocation arrangements 10 Upgraded customer experience 11 Competitive cost base 11 Generic response arrangements for managing disruption 11 A media strategy for internal and external stakeholders 12 Plan development, review and training arrangements 13 Arrangements for embedding the plan into the day to day management systems and organization culture 14 Conclusion 15 Bibliography 16 Business Continuity Management British Airways Introduction British Airways is the leading airline carrier in United Kingdom. BA is headquartered in Waterside on the neighborhood of its major hub at London Hearthrow Airport. When compared to other airline services in UK, BA is the largest of all in terms of fleet size, international flights as well as international destinations. It has another hub in London Gatwick Airport. The British Airways Group was established in 1974 via nationalization courtesy of the Labor Government of that time. British Airways was created from two huge London based airlines- BOAC and BEA incorporated with other minor regional ones, Cambrian Airways Cardiff and Northeast Airlines. The four companies were joined to create the British Airways in 1974 and the firm was later privatized in 1987. The Airline further expanded after the acquisition of British Caledonian and Gatwick-based airline Dan-Air in 1992. Regardless of the airline being essentially a Boeing client, it placed major order for airbus aircraft in November 1988 with the acquisition of 89 A320 Family aircraft. In 2007, the airline placed another major order which marked the beginning of its long-haul fleet substitution, Airbus A380s and Boeing 787s. British Airways is the biggest operator of the Boeing 747-400 in the globe. Private Limited Company (Shareholders) British Airways is one of the firms listed on the London Stock Exchange and is a component of the FTSE 100 index. The company agreed to merge with Iberia Airlines in order to create the third biggest airline in the globe as far as revenue is concerned (Campbell-Smith, 2001). Critical activities and an assessment of maximum tolerable period of disruption British Airways is a complete service global airline that provides all year round flight services with extensive global routes. British Airways serves almost 150 destinations, six of them being domestic and is one of the only eight airlines that operate in all the six continents. It offers flight services to various destinations all over the world. Its main fleet of aircrafts is built in UK safe for the Boeing 707 and Boeing 747 both from BOAC. It launched the Boeing 737 and Boeing 757 in the 1980s while the Boeing 747-400, Boeing 767 and Boeing 777 were launched in the 1990s. Most of its aircrafts are made of the Rolls-Royce engines constructed in Britain safe for 29 of its entire 777fleet (Campbell-Smith, 2001). The company has a united kingdom civil aviation Type a operating license and is allowed to ferry passengers cargo and mail on airplanes compose of 20 or more seats. As an incumbent airline, British Airways has been allocated about 40% of all the landing and takeoff points at Hearthrow most of which are used for the profitable trans-Atlantic market. The company is a subsidiary with both Avro RJ and Embraer airlines located in London Airport. In 2008, city Flier entered into a contract with Embraer to refurbish the existing fleet with a new order for 11 E-jet airplanes which are substituting the present Avro RJ Aircraft (Campbell-Smith, 2001). Time recovery objectives British Airways has clearly defined recovery objectives for any disruptions that its operations may encounter. In order to ensure that the airline remains the ultimate choice for its customers irrespective of the situations or circumstances, the company has launched a variety of services from which customers can choose from wherever they require the services of the company. The firm consistently introduces fantastic products like new company class seat on long haul and refurbished First cabin. It also delivers outstanding service for customers at every landing. This it does by training the staff both on the ground as well as in the air in world-class generosity and customer service. Customers are able to get check-in from the Internet using the domain ba.com. The firm is also planning to introduce an entertainment system as part of its lucrative services. The firm has made great efforts to establish its presence in major global cities. This is aimed at offering the best global connectivity for all its clients. To add to its new long haul service from London to New York, British Airways will strengthen its market depth by increasing the number of flights to other places such as Dubai and Johannesburg. Other time recovery strategies include the acquisition of other aircrafts to compensate for issues such as delays. Due to the delay of the delivery of the new Boeing 787s, British Airways acquired six Boeing 777-300ER aircrafts to cater for the gap. The company is also determined to maintain its leading position in London airline service industry (Marriott, 1998). Critical dependencies British Airways has acquired a new subsidiary airline known as OpenSkies formerly known as Project Lauren. This is as a result of establishment of OpenSkies between Europe and America in March 2008.It formerly owned the Airways Aero Associations limited which runs the British Airways flying club and also controls its own aerodrome within the British Airways brand at Wycombe Air Park, High Wycombe. The firm began its operations in June 2008 and at the moment, its aircrafts operate fro Paris to New York. British Airways has a 13.5% share holding in the Spanish airline Iberia which is also the firm’s main shareholder controlling 10% stake. By acquiring the American’s Airline left shares, the firm increased its share holding in Iberia from 9% to 10%. In 2008, this figure was further increased to 13.5% which allowed it to appoint two persons to the board. British Airways and Iberia agreed to merge and establish a joined force in all-stock dealing. They will however maintain their original brands just like KLM and Air France in the merger plan. BA also acquired a 15% share in Flybe when it sold off part of its regional UK based BA connect to Flybe in 2007. It also controls a 10% shares in InterCapital and Regional Rail, the firm that runs the activities of Euro (U.K.) limited. British Airways World Cargo has world freight opportunities via the British Airlines world cargo. It also established a World Cargo center at its headquarters in the 90s. As a result of modern freight handling techniques, the center can handle abnormal and premium cargo and new produce (Marriott, 1998). Strategies for maintaining critical activities/dependencies A strategy is described as the direction and scope in which a business firm attempts to achieve an advantage over other firms in the highly competitive and changing business environment. British Airways has not been left behind in developing incredible business strategies maintaining critical activities/dependencies. The firm is in a tough trading environment and has thus focused hard on collective handling of immediate crisis while organizing the business for better business opportunities. The firm has in particular laid out proper strategies to be able to run the business activities at lowest costs possible and to provide quality services to its clients. It also has strategies in hand to speed up its operations and be able to meet client’s demands when they arise. Some of the strategies that British Airways has put in place to assist in maintaining critical activities/dependencies include: Use of online technology to reduce operational costs The company sells most of its seats through the internet. The online booking strategy applies a variable pricing system in an attempt to maximize load factors. This is based on the assumption that the fuller the aircraft the lower the operational costs will be due to average costs of units of travel. Ticket less travel Another strategy that the firm has established is the use of emails to notify their clients of the travel details. This assists in the reduction of the cost of issuing, distribution, processing and reconciliation many tickets that are involved in travel arrangements (Campbell-Smith, 2001). Paperless operations The company has adopted the strategy of the paperless office by operating entirely on IT systems in both the management as well as the administration operations. Critical dependency monitoring arrangements British Airways has developed a plan for growth as part of its critical dependency monitoring arrangements. Irrespective of the economic downturn, the company has continued to grow whenever a chance arises. It also meets the demands of the customers and also makes a reasonable economic growth. It has also launched new routes from places such as London to Hyderabad and St Kitts. The OpenSkies which is a subsidiary flying from Europe to North America and the consequent acquisition of L’Avion are all included in the development plans. The firm is investing in the more economical efficient and flexible new aircrafts (Gregory, 2000). Corporate responsibility Since the vision of the organization is to become the most significant airline in the globe, it has brought all its corporate responsibility duties together under the slogan ‘One Destination”. The firm has engaged corporate responsibility in activities such as recycling waste and minimizing air and noise pollution and also in reduction of carbon products emission. The company is investing significantly in community relations by participating in activities such as charities both for economic purposes as well as commitment to its people. The critical dependency monitoring arrangements have also been facilitated by the ability of the firm to be flexible in its operations. The flexibility of the organization is exhibited in four main aspects: the ability to vary the volume of production, ability to vary time, ability to vary the variety of services provided and the ability to refurbish and launch new products and services (Campbell-Smith, 2001). Plan invocation arrangements The main objectives of the company’s business plan is to build on its main strengths in order to upgrade the customers experience in an attempt to make the firm more cost effective, enhance its operations and corporate responsibility. The firm constantly records the fuel prices in order to review plans and reset priorities. Some of the strategies that thee company employs in plan invocation arrangements include: Upgraded customer experience The business plan is intended to transform the operations and customer service. The company has employed an extended punctuality and baggage objectives across the networks which assists in realizing a record customer fulfillment scores. Service for premium clients must be enhanced with the new club world product, which is included in the Boeing 747 airplane and most of the Boeing 777s. The Galleries lounges at Terminal 5 and Terminal 3 will have an incredible reception due to the application of the same strategies as those in other major airports like Milan, Johannesburg and Vancouver. Competitive cost base British Airways has reinforced its efforts to control fuel costs due to the rise of the fuel prices. Terminal 5 has particularly assisted in cutting the fuel costs of Hearthrow operations. This has also assisted in the reduction of manpower levels by a significant margin. A reasonable management voluntary severance program also minimizes the number of managers to an appropriate number. Capacity was realigned to handle weaker demand and if possible, exploit fuel efficiency in aircrafts (Campbell-Smith, 2001). Generic response arrangements for managing disruption In order to respond to the disruptions of the Company’s activities, an impact analysis has to be carried out to assess the effect of the disruption to the activities of the firm. This step is followed by establishing the maximum tolerable period of disruption. The impact of the disruption on the environment, the financial status of the company and the impact on the staff is also analyzed in order to come up with a viable generic response arrangement. The response will be presided by an analysis of the critical activities which have the greatest impact within the shortest time. These activities will be facilitated by appropriate resources such as people, buildings, technology and stakeholders. A risk assessment process then follows to describe the risk. At this point the determination of the alternative to undertake becomes crucial. This is important in reducing the chances of disruption as well as shortening the duration of interruption. This will also minimize the impact of disruption. The resources available will also be taken into account in determining the course of action. The generic response arrangements for managing disruption will also aim at meeting the customers’ needs and enhance the margins through new revenue systems. British Airways has ensured this by establishing profitable ancillary services that provide great value and reinforce its brand in the customers’ eyes. The objective of BA is to expand its mileage business an increase its revenue (Gregory, 2000). A media strategy for internal and external stakeholders British Airways is determined to ensure that all the stake holders of the company receive a return of their investment from the company. The company is capitalizing on all growth opportunities to ensure that it gets appropriate returns for the stakeholders. It also participates in corporate activities such as organizing charity work and participating in activities that minimize the pollution of the environment. This is an attempt to get a positive reputation from the media which is vital to the growth of the firm. It also involves every stakeholder in planning all its activities to ensure that everyone feels valued by the firm. In order to ensure that it satisfies both its internal as well as external stake holders, the firm invests in a thorough marketing strategy to familiarize the people of its activities. The musical theme principally applied in the British Airways advertisement strategy is The Flower Duet by Leo Delibes. The advertisement agency contracted by British Airways was Saatchi and Saatchi who established most of the largely popular advertisements for the airline. It also established the influential Face commercial for the company following the end of its partnership with British Airways. It created an imitation of its commercial airline Silverjet in 2007 to beef up the competition and make its presence sensible in the airline industry. The company was able to purchase the acronym BA and thus use the internet domain ba.com to advertise its services via the Internet. This domain was formally owned by Bell Atlantic (Marriott, 1998). Plan development, review and training arrangements British Airways has laid down proper strategies for plan development, review and training arrangements. In order to be a leading global premium airline, the company maintains its enhancing performance operations by consistently keeping a financially fit status. This is achieved by investing in the future and delivering an appropriate return to the shareholders. To realize these objectives the company has developed appropriate performance measurement procedures. These will ensure the mangers achieve their objectives by ascertaining that they are accountable for the delivery of their targets. The company has set standards that assist in achievement of excellence in the industry. It has established a number of key operational procedures to assist in plan development. It is applying a means of approach referred known as lean continuous improvement approach (Willcock, 2009). Arrangements for embedding the plan into the day to day management systems and organization culture British Airways compete program are aimed at instilling the drive and competition in the industry in a manner that will assist in maintaining customers at the heart of the organization’s culture. The company has set the standard which will enable it deliver a world leading customer/client services. In order to achieve this, the firm will always keep promises. It will always be doing what it has promised its customers. It will incorporate a system and style that is contemporary and understated and do the right things for the right purpose at the appropriate standards. The management will also find solutions to problems in a flexible and appropriate framework. It will also treat everyone including the staff members as individuals in order to satisfy everybody’s needs. This attempts to respect the issue of differences and add an aspect of personal touch to make everyone feel appreciated. The company will involve everyone in the planning to ensure that it achieves its objectives. In order to realize this, the firm will invest in training new leadership to assist in the management of its affairs. It will implement clear communication channels to ensure that everyone in the firm is aware of the company’s plans (Willcock, 2009). Conclusion British Airways remains a leading airline service provider in the world due to adoption of the appropriate strategies in all its operations. The company has also been successful since it incorporates all the stakeholders in the planning of its activities. British Airways enhances the manner in which it manages its operations in all sectors by training its staff and incorporating systems solutions. It also re-enforce the new organization structure with clear accountabilities relevant to the organization’s goals and innovate its mode of working using the e-methods. Bibliography BA World Cargo Adds to Surcharge". Journal of Commerce, Inc.. 2005-08-25. British Airways 2008/09 Annual Report and Accounts". British Airways. 23rd March 2010 Campbell-Smith, D., 2001, The British Airways Story: Struggle for Take-Off. London: Hodder and Stoughton. Description of UK Civil Aviation Authority Type A Operating Licence". Civil Aviation Authority. 23rd March 2010 Gregory, M., 2000, Dirty tricks: British Airways' secret war against Virgin Atlantic. London: Warner. Marriott, L., 1998, British Airways. New York: Plymouth Toy & Book. Willcock, J., 2009, "People & Business". The Independent. Read More