British Airways SWOT & PESTLE Analysis
COMPANY PROFILE -British Airways
Business Sector :Aviation
Operating Geography :United Kingdom, Global
About British Airways :
British Airways (BA) is the flag carrier in the United Kingdom and the largest airline by fleet size. It is a global airline well known for its low year round fares and extensive global route network. Established in 1974, it is headquartered at Waterside, UK and operates mainly from the London Heathrow airport and Gatwick Airport. It has more than 45,000 employees on its rolls as of early 2019. International Consolidated Airlines Group, S.A formed in 2011 by the merger of British Airways and Iberia (Spanish flag carrier) is the parent of British Airways.The airline was first founded in 1974 and was the result of the merger of four companies - British Overseas Airways Corporation, British European Airways, Cambrian Airways and Northeast Airlines. In 1987, British Airways changed from being a state operated airline to a private airline. The primary slogan of the airline is “To Fly. To Serve”. Some other slogans also used popularly by the airline are "Upgrade to British Airways", "The World's Best Airline", "We'll Take More Care of You", and "Fly the Flag".
Their mission statement reads, “One Destination seeks to ensure our customers fly confident that, together, we are acting responsibly to take care of the world we live in”. The airline has set its self the goal of becoming the world’s leading global premium airline.
British Airways Revenue :
£13,290 million - FY ending 31st Dec, 2019 (year-on-year growth of 2.5%)
£13,020 million - FY ending 31st Dec, 2018 (year-on-year growth of 5.7%)
£12,226 million - FY ending 31st Dec, 2017 (year-on-year growth of 7.3%)
£11,398 million - FY ending 31st Dec, 2016.
Competitive Analysis of British Airways
| 1. Strong and trusted global brand identity 2. Market leader in UK with huge fleet size 3. Heathrow as a hub gives competitive edge to British Airways 4. Better IT integration with the services offered | 1. Employee issues cause service disruptions 2. Disruptions due to infrastructure system issues |
| 1. Venturing into global operations 2. Plan4’ business initiative to improve customer experience and efficiency | 1. Intense competition from Middle Eastern airlines 2. Competition from high speed rail service providers |
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Detailed SWOT Analysis of British Airways
Strength
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Weakness
1. Service disruptions due to employee issues: As British Airways used to be a state owned carrier in the past; it continues to be entrenched in unions. British Airways was plagued by pension issues for employees a few years back which had affected operations and customer relationships. There have been several disruptions by employees resorting to strikes over low pay and allowances. Also the airline has resorted to job cuts to improve The most recent incident was in early 2017 when 2,900 crew members in BA’s mixed fleet resorted to strikes over “poverty pay” to the cabin crew which remained unresolved. Around 1,400 crew members again threatened to go on strike in July 2017. These strikes disrupt the airline’s operations as flights are cancelled and also travelers need to be compensated in some instances. The company should do more to invest in the skills of the employees and take an innovative approach to industrial relations.
2. Disruptions due to infrastructure system issues: A technical glitch in the new check-in systems in BA caused flight delays worldwide in September 2016. The airline had installed the new systems and completely rolled out old systems from 2015. More recently in May 2017, British Airways suffered a major IT failure due to a “power surge” which affected its systems globally. More than 75,000 passengers were affected and several BA flights got cancelled due to the above incident which is estimated to have cost BA £100m in compensation costs. These incidents not only cost financial impact but also loss in customer trust and brand image. British Airways needs to make sure that their IT systems infrastructure which is the backbone of its business is reliable and resilient.
Opportunity
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Threat
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References used in British Airways Analysis Report
2. IAG Capital Markets Day -Nov 2016: https://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzU3NDQzfENoaWxkSUQ9LTF8VHlwZT0z&t=1&cb=636138423067231682
3. British Airways strike 2017: The flights affected and your compensation rights as 1,400 staff walk-out in long-running pay dispute: https://www.mirror.co.uk/money/british-airways-strike-2017-flights-10731347
4. British Airways computer outage causes flight delays: https://www.theguardian.com/business/2016/sep/06/british-airways-computer-outage-causes-global-flight-delays
5. British Airways IT failure caused by 'uncontrolled return of power': https://www.theguardian.com/business/2017/may/31/ba-it-shutdown-caused-by-uncontrolled-return-of-power-after-outage
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British Airways SWOT and PESTLE analysis is reviewed by senior analysts from Barakaat Consulting.
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