British Airways

Institution
Course

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 British Airways
1. Historical Overview of British Airlines
1.1 History of British Airways
British Airways was formed in 1974, following the merging of four UK airlines; British Overseas
Airways Corporation (BOAC), British European Airways (BEA), Cambrian Airways and Northeast
Airlines. BOAC and BEA, were the then largest UK airlines, while the other two were smaller
regional airlines. This merger was the completion of a consolidation process that was started in
1971 with the establishment of the British Airways Board, which was created by the British
Government to oversee the operations of BOAC and BEA. At the time however, BOA and BEA
continued to operate as separate entities. In 1976, British Airways acquired the supersonic
Concorde, which operated on transatlantic services. In the same year, it started the sole
operation of international flights to North America and Southeast Asia from rival British
Caledonian. In 1987, under the leadership of Chairman Sir John King and CEO Colin Marshall,
the airline was privatized and in July of the same year, the airline launched the controversial
takeover of British Caledonian. Following its privatization, the airline experienced rapid growth
and dominated its domestic rivals, hence the use of the slogan, “The World's Favorite Airline".
In the mid-1990s, the airline however, experienced increased competition, which resulted to a
restricting effort, investment in regional European airlines, looking to enter international airline
partnerships as well as the controversial ethnic livery rebranding campaign. In the 2000s, under
CEO Rod Eddington, the airline cut costs, retired the Concorde and also removed the ethnic
liveries. In 2005, the airlines moved its primary hub to Heathrow Terminal 5. On 8 April 2010,
British Airways and Iberia Airlines agreed to a merger, forming the International Airlines Group.
British Airways however, continues to operate under its own brand (Coller, Mills and Mills,
2016).
1.2 Overview of British Airways
British Airways is a global airline and the UK’s flag carrier. Its operational headquarter is based
in Waterside, near its main hub at London Heathrow Airport. It is a full service global airline and
one of the few airlines that fly to all the seven continents. it owns some of the largest and most
modern fleets in the world and was one of the first customers of Boeing. It flys to over 160

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destinations across the world, including six domestic routes. It also has codeshare agreements
with various international airlines such as; Aer Lingus, American Airlines, Qantas and Japan
Airlines, among others. It is also a members and one of the founders of the airline alliance,
Oneworld (British Airways, 2021).
2 Evaluation of the Current Business Environment
PEST Analysis
PEST is an acronym that stands for political, economic, social and technological analysis. It is a
strategic framework that is used to assess major external factors which influence the operation
of a business so that the business can become more competitive in the market (Ho, 2014).
Political Factors
Britain is in the process of improving its political stability. Political stability is an important
political factor as it also influences various factors which determine the likeability of an
environment, such as the perception of safety by the population. There are several political
events which have had a major impact on the political environment of the U.K. One such
political event is the Brexit, which has had affected business operations across the UK, including
those of the aviation industry. This industry was heavily regulated by the EU legislation and will
therefore feel the effect of various regulations that will change such as operator licensing,
traffic rights, safety regulations, personal licensing, borders, customers and immigration laws
(Brezonakova, Badanik and Davies, 2021).
Recently, the UK has withdrawn from Afghanistan, a move that has increased terror risk in the
country. In August of 2020, the UK ended its 20-year military involvement in Afghanistan. This
departure as well as the fall of Afghanistan to the Taliban is likely to embolden UK terrorists.
According to the former chief of the UK defense staff General Lord Richards, the UK could be
closer to another 9/11. These speculations are because there is a belief that the ungoverned
space opened up in Afghanistan provides an opportunity for terrorist groups to act and that
Taliban may have limited ability to manage these groups (Turner, 2021). Terrorists attacks have
in the past been shown to affect the performance of airlines, even across the globe. An example
is the attack at the Brussels airport which occurred in March 2016. According to IAG, the

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company was negatively affected, with shares dropping by up to 5 percent. The company had
to offer fewer seats on its aircrafts due to weakened demand (Monaghan, 2016).
In the recent past, the airline was engaged in another political debate for demanding a third
runway at Heathrow airport from the UK government. According to British Airways, Heathrow
expansion would help boost Britain’s economy by £37 billion. It would also increase the
capacity to provide better air links for regions across the UK as well as create more job
opportunities. This measure has been met with resistance from part of the government as well
as environmental groups who have argued that the third runway would create unacceptable
levels of noise and pollution as well as increase the airline’s carbon emissions due to increased
number of flights (Edgington, 2020).
Economic Factors
Britain is the sixth-largest economy in the world. However, its economic growth has been slow
since the 2016 referendum on leaving the European Union. This is because of the uncertainty
over the years has eroded the confidence of consumers and investors, therefore reducing the
aggregate demand. Several businesses have also moved their headquarters from the UK to the
EU. The lower trade and foreign investment is expected to result to lower average incomes
(Reenen, 2016). The economic situation of UK was further worsened by the COVID-19
pandemic as was the case in all other countries. The country experienced the deepest recession
since World War II. Despite these economic uncertainties, British Airways has continued to
record increase in revenue and profits, which can be attributed to the airline’s ability to adapt is
business and operating model to the changing economic situations.
Social Factors
Consumers especially in western markets have strong attitudes towards climate change and
sustainability. They are looking for more sustainable ways of consuming goods and services
including airline travel. Consumers who are environmentally conscious are revising their travel
habits, such as travelling less so as to reduce their contribution to carbon emission. In a survey
conducted on October 2019, 25 percent of UK residents were willing to avoid flying where
possible and use alternative ‘greener’ means of travel. 29 percent stated that they do not fly at
all and 9 percent were willing to give up flying (Statista, 2021). An airline’s commitment to

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sustainability and reducing its carbon foot print, is linked to a positive reputation and brand
image of the airline among consumers (Ryley, Burchell and Davison, 2013). In order to perform
in the market, British Airways has to take this into consideration
There is also an increased desire for travel among millennials and Generation Z. These
generations are making travel a priority. In 2019, the average millennial planned on taking at
least five trips throughout the year, with three of these trips being international trips. Those are
more international trips than those taken by the average generation X and baby boomers
consumers. Millennials despite being in debt, make room for travel by saving more, cutting
their costs and even looking for extra sources of income (Leonhardt, 2019).
Leisure travel is also becoming predominant in the UK. In 2015, approximately 80 percent of
the passengers who were flying from or to the UK airports were leisure passengers. Tourism
contributes an estimated £59 billion to the UK economy. In 2016, inbound tourism by air
contributed 80% of foreign holiday spending. There has also been an increasing need to keep
important cultural and family links with friends and family members abroad.
Technology
Technology is central in the aviation industry.UK is a global leader in the development of
aviation technology and innovation. It has produced some of the most technologically
sophisticated parts of aircrafts such as wings, engines and advanced systems. Additionally, over
2,000 companies based in the UK work to ensure that innovation, and research and
development are maintained (HM Government, 2017). based on this therefore, it could be
argued that British Airways is at advantage of accessing up to date technology which set it apart
in the industry, among other international airlines.
The importance of digital technology in aviation has also increased over the years. Digital
technology has helped airlines grow their direct and indirect revenue, optimize costs, improve
their passenger experience and advance growth prospects. Technology can be used to market
an airline and therefore grow its customer base. British Airways is taking steps to undertake a
digital transformation by merging technology in its daily operations worldwide. It is also
investing in its fleet to adopt more fuel-efficient jets as well as a fleet that offers superior

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customer experience. The new technology is meant to increase the efficiency, quality of
services and profitability of the airline (British Airways, 2021).
3 Main Management Challenges Facing British Airways
3.1 SWOT Analysis
SWOT, which stands for strengths, weaknesses, opportunities, and threats, is a technique for
assessing the internal and external environment of a business. The first two elements; strengths
and weaknesses, represent the internal environment, while opportunities and threats
represent the external environment.
Strengths of British Airways
(i) Established Brand
British Airways’ reputation and competence over the years, has enabled it establish a strong
brand. has built its brand over the years. It establishes itself as a premium global brand that
provides customers with quality services, operational effectiveness and efficiency, as well as
technology. In a survey conducted in 2019, British Airlines was shown to be the most popular
airline among millennials with 61% of the respondents stating that they had a positive opinion
of the company (Statista, 2019).
(ii) Strong Profitable Strategic Alliances
The airline is part of strategic alliances such as the International Airlines Group (IAG) and the
One World Alliance. It is one of the founding members of the One World Alliance which also
includes American Airlines, Cathay Pacific and Japan Airlines among others. These alliances
enable the airlines access to a wider network, advanced technological resources and a bigger
passenger database. The airline has for example, partnered with American Airlines, Finnair and
Iberia to offer its customers more choices and better deals on flights from Europe to the United
States (British Airways, 2021).
(iii) Strong Technological Capabilities
The airline has made several technology investments which have been highly profitable for the
brand. The airline has invested in highly fuel-efficient aircraft models such as the Airbus A350
and retired its Boeing fleet which consumed high amounts of fuel (British Airways, 2020).
Through IAG, the company has also invested in artificial intelligence and machine learning,

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therefore using data analytics to grow its efficiency and serve its customers better. Additionally,
the company has invested in the digitization of its business operations. In 2019 for example, the
airline made improvements to its website and app to streamline its booking process, which has
resulted in the increase of the number of people booking directly from the company’s website
and app, as opposed to use of third party websites (British Airways, 2019).

(iv) International Route Network

The airline has been increasing its international route network yearly. As of 2018, 30% of all
flights departing from the London airport belonged to the British Airways. It is also the largest
flight operator at the Heathrow and London airports and the second-largest at the Gatwick
airport (British Airways, 2020). In 2018, the airline launched several new routes including
Durban, Seychelles, Almeria and Corsica.
Weaknesses of British Airways
(i) Labour Issues and Toxic Workplace Environment
The airline has had a long history of labor issues, with pilots and cabin crew striking over pay
disputes. These disputes not only disrupt operations, but also lead to increased loss in profits.
During the 2019 dispute over pilot’s salaries, over 2,325 flights were cancelled (BBC, 2019).
Multiple complaints over toxic workplace environment have also been raised. These complaints
have been prompted by the airline’s response to various crisis. In 2020 for example, the
company cut 12,000 job roles and cited that 6,000 had volunteered. However, some employees
explained that they were forced into voluntary redundancy and if they did not, they would only
receive a statutory redundancy payout (BBC, 2020).
(ii) Weak Cyber Security and Technical Failures
The airline’s IT system was hacked and the personal data including the addresses, names and
payment-card details of customers and employees were compromised. The information hacked
involved approximately 380,000 booking transactions made between August 21 st and
September 5th of 2018. Not only did the incident shake the customers’ confidence in their
systems, but also cost the company a lot of money. 420,000 victims of the data breech filed a

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legal claim. Following the airline’s failure to protect its customers, the Information
Commissioner’s Office handed the airline its largest fine to date of £20m (BBC, 2021).
There also have been increased cases of technical failures which have affected the passengers.
A computer system’s glitch in 2019 for example, resulted to the cancellation of over 500 flights,
causing passengers to be stranded. While the glitch only affected some of its airports, it ended
up affecting several flights across its network causing even further delays. This caused several
passengers to express their disappointment on social media (BBC, 2019). The airline
experienced a similar IT problem in 207 during the spring bank holiday. A network system
failure caused cancelation of over 726 flights, which left tens of thousands of passengers
stranded (BBC, 2019).
(iii) Reduced Quality of Services.
For some time now, the airline has been experiencing a decline in the quality of its services,
which affected its performance even before the pandemic started. Multiple complaints on flight
delays and cancellations have been made, with most passengers expressing discontentment
with how the situations was handled. In one case of flight BA422 travelling from London to
Valencia, customers had to exit the plane by emergency escape chutes after the cabin filled
with smoke (Davies, 2019). This incident has caused further woes for the company, with
passengers of the flight complaining of breathing problems as a result of the fumes. Some of
the passengers have reported to be suffering from throat sores and breathlessness despite not
being smokers. The company may be required to compensate these customers causing further
financial losses (Burridge, 2019).
There were also complaints over the airline’s decision to remove complimentary meals on
short-haul services. While the airline explained that this move was to cut down on the waste
since many snacks were being thrown, customers were still not satisfied. The airline, instead
introduced a buy on board feature for customers (Calder, 2017).
There also have been complaints on the cramped business-class cabins and the poor interior.
Customers have complained that while they pay for premium services the, company provides
them with extremely poor quality services, including poor quality food, cramped seats and
substandard entertainment (Paton, 2019).

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 Opportunities of British Airways
(i) International Market Expansion
British Airways can grow further by increasing penetration in its international markets.
Currently, the airline depends on the UK market for a large part of its revenue. Penetrating
these markets deeper will help the airline grow its customer base and increase revenue (British
Airways, 2020).
(ii) Expand services portfolio for revenue growth
Expanding the airline’s service portfolio is another way to help he company grow its revenue for
its existing markets. It can diversify into related industries such as hotel and vacation services,
among others. This strategy has been successfully used by leading airlines in the US (British
Airways, 2020).
(iii) New Environmental Policies
The new environmental policies being implemented will create a level playing field for all
players in the airline industry. This presents British Airways with a great opportunity to leverage
its advantages in new technology and therefore gain market share
Threats of British Airways
(i) Increased Competition
Competition is a leading threat in both the UK and the international airline industry. Other than
the growing number of carriers, different niches have also become popular resulting to the loss
of market share in key markets for the company. An example, is the rise of budget airlines such
as easyJet and Ryanair, which are becoming popular due to their affordable prices. Increased
competition also results to increased operational expenses due to higher costs incurred to
improve the aircraft and services provided by the airline (Ustaömer, Durmaz and Lei, 2015).
(ii) Problems caused by Brexit
Brexit has given rise to new challenges for the British Airlines among other UK airline
businesses. Brexit caused higher economic uncertainty and also dampened investor confidence,
which affected the performance of the airline. The immigration laws imposed by Brexit may
also affect operations of UK airlines.

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Brexit has failed to ensure a level playing field and therefore British Airways has been negatively
affected. British cargo, charter and leasing airlines have been losing contracts and businesses to
their rivals in the European Union. This is because the rules and practices that Britain has
adopted, limit UK carriers flying to the EU, while allowing greater freedom and flexibility for EU-
owned airlines to fly into the UK. For example, in order for foreign carriers to fly ad hoc
between the UK and mainland Europe, there are permits that are required. However, EU
airlines are able to acquire these permits faster than UK airlines (Topham, 2021).
(iii) Coronavirus Pandemic
The Covid-19 pandemic greatly affected the airline industry by significantly reducing
international travel and general movement of people due to restrictions put in place to contain
the disease (BBC, 2020). There have been reports of the virus mutating to new strains which are
more lethal. The extent of the disease is not fully known and as such it remains a threat to the
aviation industry.
Not only did the virus restrict operations airlines operations, but also resulted to a deepened
recession. This is likely to affect the disposable income of consumers and therefore their
spending habits.
Additionally, the pandemic resulted to emergence of new social trends such as meeting online
and attending social and business events online through technologies such as Zoom. This may
likely have a lasting effect on people’s views on travelling, therefore reducing the need for both
domestic and international travel and flights. There is expected to be a decline in business class
travel, which may significantly affect airlines. This is because business class users make
premium payment for these services, which account for a significant amount of revenue
collected from flights. Additionally, the new age of workers who are growing up with
technology are likely to prefer doing business over phones and computers, further affecting the
need of air travel for work purposes (PMGroup, 2020).
(iii) Rising fuel Costs
The UK has been experiencing an increase in the prices of fuel. As of October 2021, both petrol
and diesel had already reached levels lastly seen in autumn 2013 and are almost surpassing an
all-time record set in April 2012. The increase in fuel prices is not connected to the recent

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shortages in tanker drivers in the country. Instead, the prices are linked to the increased cost of
oil, which started to increase in September. The prices are predicted to continue increasing up
to Christmas. The uncertain increase in fuel prices is a common threat for the aviation industry
(Davies, 2021).
4. British Airways Business Model and Strategy
4.1 Business Model of British Airways
British Airways Tradition Full Service Carrier Business Model
British Airways operates under the traditional business model of full service carriers. This is a
type of business model where a brand is associated with status and offers an expensive product
available to a few. Airlines operating under this business model lead international alliances and
do not receive subsidies form airports. They also have collective agreements that constrain
policy choices. British Airways for example, has a ‘100 passengers’ scope clause, which means
that flights with more than 100 passengers have to be manned by pilots on the airline’s
seniority list.
British Airways Adopting Low Cost Carrier Business Model.
However, over the years, the traditional business model of FSC has been challenged by the low-
cost carrier (LCC) model. The LCC model offers efficient and punctual service while eliminating
unnecessary costs and perks. This business model offers only the basic elements required for a
safe flight and are therefore often associated with low airfares. Following the deregulation of
airlines, this became the most common airline business model. FSC was common before
deregulation and often included airlines that were flag carriers. LCCs have become a threat in
the airline industry and as such, FSCs have started to reconsider their traditional business
models. British Airways was one of the first airlines to experience competition from LCCs, which
could explain why its attraction to the LCC model. British Airways is one of such airlines which
while it has not fully shifted to a LCC business model, it has adopted some elements of the LCC
business model.
One such element is the significant reduction of the salaries for both the cabin crew and pilots
as well as the average labour costs per employee, so as to compete with LCC airlines such as
easyJet. This plan started in the mid-1990s, when the airline had an interest in reducing its costs

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so as to compete on short-haul flights. It achieved this by reducing basic salaries holiday
entitlements and allowances for pilots and cabin crew (Lange et al., 2015).
Since 2008, the airline attempted to compete with EasyJet in terms of labour unit costs. As a
result of these reductions, the airline has faced several industrial conflicts and to deal with
these conflicts, the airline opted to take legal action. For example , the airline took British
Airlines Stewards and Stewardesses Association (BASSA), to court following a strike ballot held
in 2009 in a dispute over job cuts. The action was blocked by the court which deemed the ballot
illegal. The airline also took disciplinary actions against BASSA representatives who led the
ballot and terminated their employment.
Reduction in investment in training and development of the airline’s employees as well as
reduced recruitment standards, are another element that have been used by the airline to
compete with LCC airlines. As per BASSA, the airline’s management is now concerned with
recruiting cheap crew, which can be replaced on a regular basis. The airline has also terminated
its financial support for training of pilots. Instead, it requires that pilots pay for their training
using a loan scheme which provides them with tax relief. This is the same model used by
easyJet (Lange et al., 2015).
The airline also reduced the variety of its aircraft and it intends to continue with this plan.
Instead of buying new fleet, the airline has opted to lease secondhand aircraft, which is
cheaper. The decision, which was proposed by IAG, is mean to expand long-haul fleets, while
also cutting costs. In 2016, the airline planned to lease used Airbus Group SE A380 superjambos
and Boeing Co. 777-300ER long-range jets, with a possible source for these aircrafts being
Malaysia Airlines, which was looking to decrease its fleet, following a surplus (Bucher, 2016).
4.2 British Airways Business Strategy
Following the analysis of the airline’s annual reports, the following major business strategies
can be identified: continuous modernization of aircraft fleet, minimizing the environmental
impact, innovation and enhancement of customer loyalty and increased presence in existing
destinations (Fedosova, 2016).
Continuous Modernization of Aircraft Fleet

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British Airways prioritizes continuous modernization of its fleet. IAG, which manages British
Airways, introduced a total 34 aircraft, including A3550s, B787s and A320 neo family aircraft.
Two additional Boeing 787s were also introduced to support the airline’s long-haul operation.
The new aircraft are up to 20% more fuel efficient compared to the previous aircraft. IAG
intends to continue fleet modernization for its airlines by introducing 64 Airbus A320neo series
aircraft, 26 Airbus A350s, 10 Boeing 787s and 18 Boeing 777-9 aircraft. In 2020, the airline
retired its B747 fleet and replaced them with the Airbus A350-1000. The latter while offering
the same capacity, has better improved product, better customer comfort and increased fuel
efficiency (International Airlines Group, 2021).
Minimization of the Environmental Impact
The airline commits to improving its environment. It commits to achieving net zero carbon
emissions, by implementing short-, medium- and long-term initiatives. Short-term initiatives
include; improving the airlines efficiency and introducing carbon offset and removal projects.
Some of these projects involve purchasing lighter trollies, replacing flight manuals with tablets
and using lightweight seats on short-haul aircraft, among others. In the medium to longer term,
the airline plans to invest in the development of sustainable aviation fuel and accelerating the
growth of new technologies such as zero emissions hydrogen-powered aircraft and carbon
capture technology. As earlier mentioned, the airline has also retired its entire fleet of Boeing
747s and adopted use of more fuel-efficient aircraft. Since 2015, the airline has also reduced
aircraft noise by over 10% per flight and plans to increase this percentage to 13% by 2020. It
has achieved this by using fleet that produces less noise such as Airbus A320neo. The airline
also flies new and quieter aircraft as well as modifies the existing aircraft to reduce the noise
impact. The airline’s pilots also refine operational practices to reduce noise (British Airways,
2020).
The airline is also replacing diesel and petrol vehicles used in the airports with more sustainable
alternatives such as electric remote-controlled Mototok pushback vehicles and electric cars.
These cars are eco-friendly and emissions free and are fully powered by Heathrow's 100%
renewable electricity supply (British Airways, 2020).

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The airline investment in low carbon fuels is set to be due by 2025. The waste-to-jet fuel plant
in Lincolnshire will produce fuel which will be used to power the airline’s fleet. The airline is
also investing in sustainable fuel which is produced from sustainable ethanol and will be used to
fuel some flights as from 2022. The airline’s parent company IAG has committed $400 million to
invest in sustainable fuel in the coming 20 years. It is also the first European airline group to
commit to powering 10% of its flight with sustainable aviation fuel by 2030 (British Airways,
2020).
Innovation and enhancement of Customer Loyalty
The airline has invested in automation of the airport. In 2020 for example, the airline
introduced fully autonomous robots to carry out simple tasks, therefore allowing airport hosts
to concentrate on more complex tasks. The robots, which are from BotandUS company, are
programmed to interact with passengers in various languages. Using the latest translation
technology, the robots can answer thousands of questions, including real-time flight
information. The robots, enabled by geo-location technology, can move around the airport
terminals freely and safely, therefore escorting customers to specific location. The robots which
have already been introduced at the Heathrow Terminal have been shown to be effective in
helping over 90,000 customers navigate through the airport (British Airways, 2019).
The airline is also exploring ways to offer a seamless travel experience for their customers with
disabilities. In 2020, it conducted trials for self-driving, self-navigating, electric vehicles from
Japanese technology firm, WHILL, in JFK Airport in New York. These devices are equipped with
anti-collision technology, therefore allowing customers to set their preferred destinations
within the airport. The airline plans to further try the technology at the Heathrow Terminal 5,
which is busier (Paul, 2020).
The airline also introduced automated biometric technology throughout the airport. It was the
first airline to introduce this technology in the UK. The technology has enabled the launch of
self-service boarding gates in the airports, where travelers can scan their own boarding pass
upon arriving at the gate. The technology also allows for a digital facial scan of the customer
when they travel through security and their faces are matched to this representation when
boarding the plane. The system which is very advanced compared to alternative systems used

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in other airlines, improves safety and security in the airline. The airline plans to continue
exploring articifcal technology and 3D printing to improve punctuality for customers (British
Airways, 2019).
Growing the company’s presence in existing destinations
The company has been increasing its destinations in its existing destinations. In the UK for
example, it recently introduced three new domestic routes; Exeter, Glasgow and Leeds, for the
Winter season. This is due to increased demand for domestic travel and winter staycations. It
also introduced new summer destinations in Portugal (British Airways, 2021).
5. Recommendations for British Airways
(i) Expand its Market Share by venturing into lower-cost carriers
With the increased technology enabling virtual meeting, business travel is likely to shrink.
British Airways depends on business travel for a major percentage of its revenue. As such, it is
recommended that British Airways turns their focus on leisure routes and winning
holidaymakers, which have been shown to contribute to the success of budget airlines. This is
because leisure travelers returned faster than business travelers. Budget airlines, due to their
dependence on leisure travel are expected to recover faster from the effects of the pandemic.
EasyJet and Ryanair for example, have recovered at least 60% and 80% of their pre-pandemic
passenger traffic between July and September, which is way higher than 4% projected b IAG
(Gun, 2021). The airline can achieve this through code-sharing partnerships with low cost
budget airlines that already specialize on such routes or opening a low cost budget subsidiary
from the airline.
Code-sharing partnerships with low cost budget could benefit both types of carriers, through
enhanced revenue, profits and load factors. The partnerships can also free up limited slots at
congested airports. The partnerships would not only benefit the airlines, but also the
passengers, through increased connections to secondary markets which are operated solely by
LCCs, new origin and destination routings, a wider range of choices for long-haul destinations
and an opening up of direct flights to secondary long-haul destinations. For example, Gatwick
which is one of the world’s busiest single-runway airport faces serious constraints on its
capacity. British Airways and EasyJet share many overlapping short-haul routes throughout

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Europe, with the latter handling long-haul routes. There are several short haul flights which
arrive at the airport two to three hours before long-haul flights. This would mean that there
would not only be a sufficient volume of short-haul passengers for the long-haul connections,
but would also give the passengers enough time to connect their long-haul flights. This would
mean that British Airlines would be able to focus on its core competency, while also benefiting
from the increased connectivity (AlixPartners, 2017).
British Airways has already started talks on starting a new airline, a subsidiary of British
Airways, that focuses on the highly competitive" short-haul routes. The plan would be to
allocate short-haul flying to the lower-cost business model operating under the BA brand, while
the British Airways would continue the operation of long-haul routes. British Airways has
previously tried to launch an airline, Go Fly, that focuses on short-haul flights to Europe. The
airline which was founded in 1998 operated out of the Stansted Airport in London and flied to
various destinations across the continent. British Airways sold the airline to EasyJet.
(ii) Agreement over Pilot and Cabin Crew Remuneration
The airline has been experiencing problems with its pilots and cabin crew over remuneration.
This has led to disruption of operations as well as losses for the airline. It is therefore
recommended that the airline arrives at an amicable agreement to avoid further issues. Human
resource is the greatest asset for any organization and should therefore be prioritized. While
there are several other resources that are required to generate output within an organization,
employees are the key piece to these resources performing as expected. Human resource could
therefore be considered important in an organization achieving sustainable competitive
advantage. The business environment is always very competitive and organizations need to
develop strategies to acquire and retain the competent workforce (Ojeleye, 2017). Motivation
is important in ensuring efficient and effective performance from employees. Performance of
employees is not only important in achieving the organization’s goals, but also serves as
intrinsic motivation for the employees. When employees accomplish tasks and perform at a
high level, they gain a sense of satisfaction, mastery and pride. Low performance on the other
hand is dissatisfying.

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 (iii) Diversify into Alternative Travel Solutions
The covid pandemic showed how the airlines industry can be easily disrupted. Airlines that
survived the pandemic were those that were able to diversify into other travel solutions such as
cargo freight. Most airlines, including British Airways, converted their passenger aircrafts to
cargo flight to cater for the increased air cargo demand. The demand was particularly due to
increased need for personal protective equipment manufactured in Asia. The change to cargo
freight services was not mostly because of an increase in demand of goods, but rather because
airlines were trying to offset the losses they had incurred due to the drastic decrease in
passenger flights (Li, 2018). Additionally, the growth in virtual technology and the increased
remote working trend may affect business travel. Based on this therefore, it is recommended
that British Airways diversifies its portfolio to offer other travel solution and other business
related to travel. The airline can offer advanced virtual meeting solutions for its business
travelers, which can help the airline recapture its market share. This will require investment in
technology, and while the airline may lack technical capabilities in this area, it can partner with
technology company’s to offer these solutions. An example of an airline that has tried to offer
virtual solutions to its customer is Qantas Airways, which released a series of aviation-themed
meeting backgrounds, which could be downloaded for virtual meetings. While this may not
have necessarily raised revenue for the company, the airline saw this strategy as a fun way to
keep its customers engaged (Credy, 2021). The airline can also diversify into the hospitality
industry by applying new business models in the industry, to ensure that it grows its revenue
sources.
(iv) Investing in Cybersecurity
British Airways is a leader in innovation and technology as seen through the digitization of its
airport operations. While it has achieved this, the airline has also faced several issues due to
failures of its IT systems and cyberattacks, which have compromised the efficiency of its
operations and incurred losses. Based on this therefore, it is recommended that the airline
invests in cybersecurity activities that could help the airline to identify potential risks, expose
significant risks and therefore handle these in time. This also includes investments in new
hardware and software, innovative suppliers and recruiting and retaining top talent that can

17
help the company minimize these risks and harness the benefits of digitization (Menzel and
Hesterman, 2018).
Conclusion
Based on the analysis above, it is clear that British Airways is a premium airline that continues
to benefit from its established brand. However, over the years the airline has been experiencing
problems in the past few years including problems with their toxic work environment, poor
remuneration of pilots and cabin crew and systems failure, which have affected the operations
of the airline as well as resulted to revenue losses. To control these management problems, it is
recommended that the airline expands its market by venturing into lower-cost carriers to
maximize leisure travel especially due to the decrease in demand for business travel. The airline
should also diversify its portfolio to reduce reliance on passenger travel alone as well as reach
agreements on remuneration of pilots and cabin crew.

18
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