British Airways Case Study

BRITISH AIRWAYS

Introduction:

The world today has evolved in numerous ways thanks to the many inventions and discoveries, but few have changed the way people live and experience the world as deeply as the invention of the airplane. The industry has progressed to the point where now it would be impossible to think of life without air travelling (for developed countries). Thanks to this, long distances have been somehow ‘shortened’ hence altering people’s concept of distance. As well, making it possible for individuals to start and conduct businesses in places that were once never thought of.

Air travelling is obviously considered as a very large industry: socially, economically, and politically. It is continuing to expand and has been intensely prosperous in the past 50 years due to the overall improvement in technology. The result has been a steady decline in costs and fares, which has stimulated traffic growth. This intensive traffic makes the expansion of economical development easier and it can be also considered as a crucial factor for the globalisation that is taking place in many other industries.

This paper will analyse different factors of a specific airline, British Airways. It will look at the company in details and examine several parts in order to more or less determine its future capacity in the economical world.

British Airways, the Company:

We can trace British Airway’s (BA) origins back to the birth of civil aviation after World War I. On 25 August 1919, its ancestor company, Aircraft Transport and Travel Limited (AT&T), launched the world's first daily international scheduled air service between London and Paris. That flight was operated by a single-engined de Havilland DH4A biplane that took off from Hounslow Heath and carried a single passenger and cargo that included newspapers, Devonshire cream and complaints. It took two and a half hours to reach Le Bourget.

Shortly afterwards, two more British companies started services to Paris and Brussels. One company was called ‘In Stone’ (which was the shipping group); the other company was ‘Handley Page’ (that was the aircraft manufacturer). These pioneer companies struggled against severe difficulties: passengers were few; fares were high, and air travel seldom less than an adventure. One pilot took two days for the two-hour flight to Paris, making 33 forced landings along the way. One by one, the fledgling companies ceased operations, weakened by heavily promoted French and Dutch competitors.

In 1924, Britain's four main airlines merged to form ‘Imperial Airways Limited’. By 1925, Imperial Airways was providing services to Paris, Brussels, Cologne and Zurich. Operating from the new London airport at Croydon, services were introduced during the 1920s and 1930s to Egypt, the Arabian Gulf, India, South Africa, Singapore and West Africa. In 1935, they merged to form the original privately owned British Airways Limited, which became Imperial Airways’ principal UK competitor on European routes. They were nationalised in 1939 to form ‘British Overseas Airways Corporation’ (BOAC).

Today, BA is the world's biggest international airline, carrying more passengers from one country to another than any of its competitors. Also, one of the world’s longest established airlines; it has always been regarded as an industry-leader. BA’s worldwide route network covers some 566 destinations in 133 countries.

The airline’s two main operating bases are London’s two main airports, Heathrow (the world’s biggest international airport) and Gatwick. Last year, more than 44 million people chose to fly on the 499,000 flights that it operated. That’s the equivalent of 80 passengers checking in every minute around the clock, and a BA flight taking off or landing every 60 seconds. The airline also carried more than 907,000 tonnes of freight and mail last year (up 1.1% on the previous year) equivalent to one tonne loaded every 35 seconds.

While BA is the world’s largest international airline, because its US competitors carry so many passengers on domestic flights, it is the fifth biggest in overall passenger carryings (in terms of revenue passenger kilometres). Unlike some of the world's other airlines, BA is owned entirely by private investors - with 265,000 shareholders, including around 49% of the company's own employees.

BA’s group fleet as at 30th September 2001 comprised of 373 aircraft - one of the largest fleets in Europe. It is one of the only two airlines in the world with Concorde (seven in total), the world's