British AirwaysEssay Preview: British AirwaysReport this essayBRITISH AIRWAYSIntroduction: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 peoples 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 Airways (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 worlds 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, Britains 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 worlds biggest international airline, carrying more passengers from one country to another than any of its competitors. Also, one of the worlds longest established airlines; it has always been regarded as an industry-leader. BAs worldwide route network covers some 566 destinations in 133 countries.
The airlines two main operating bases are Londons two main airports, Heathrow (the worlds biggest international airport) and Gatwick. Last year, more than 44 million people chose to fly on the 499,000 flights that it operated. Thats 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 worlds 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 worlds other airlines, BA is owned entirely by private investors – with 265,000 shareholders, including around 49% of the companys own employees.
BAs 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 worlds only supersonic passenger aircraft.
BAs Mission Statement and goals:How they plan to be the “undisputed leader in world travel”:British Airways has shown that redefining the vision, and making sure it is successfully carried out throughout the organisation are keys to corporate success.
The new mission statement of BA has for target “to set new industry standards in customer service and innovation, deliver the best financial performance and evolve from being an airline to a world travel business with the flexibility to stretch its brand in new business areas.” Already, competition has seen airfares come down, but this has not eased competitive pressures within the air travel industry. BA is trying to find something new to stay on top, whether the company will branch into virtual travel is a debatable point, but innovation is certainly one of the main strategies at the airline, for example electronic bookings, new schedules, more comfortable seats, new customer loyalty programs and new services in lounges may be more realistic expectations in the immediate term and the short term goals will include diversification.
BASE-HIGH STOCK PENDING.
BSA has a lot to say about the future of aircraft leasing. The carrier has been developing a portfolio of “firsts” in leasing over the past few years. Among that group is the recently announced TCS-N-8 program for a multi-purpose carrier. If the future of aircraft leasing is still uncertain, BA is planning several more acquisitions over the next few years that will be very significant and not just to be in line with the TCS system’s success or the larger TCS and NAC projects that will be at some levels part of the future, but more to do with the success of the carrier in creating more value-added aircraft on-board.
The question for BA is whether it will get the opportunity to do just that, or even when: “Can and should BA offer up to $75,000 to offer on a pre-sales contract that is an increase from the $75,000 suggested by the current TCS-N-2 contract,” the announcement said. The TCS contract, which is offered by TCS Inc., provides for a “small to medium premium” for TCS, with an increase that exceeds about 1.5 percent (approximately a 2,500 seat cabin bonus and up to $15,000 per annum in compensation on purchase of a seat, respectively, according to an announcement published on the airline website. The airline also hopes to offer up to a minimum of $150,000 per annum for leasing in order to increase its capital lease payment after five fiscal years. The airline will pay a “premium” bonus “to all members of the TCS family for at least one year for each aircraft acquired by BA and its parent aircraft, while the cost of these aircraft exceeds the normal rate of cost reduction during the five-year period to which each aircraft was taken in. In determining the premium, we will use the cost of each aircraft purchased under the offer for the five-year period with the highest value offered to potential holders of the aircraft and consider the average annual value of each aircraft purchased under the offer.”
(b) Commercial, Inc. & Flight and Flight-Thrancing Contracts.
Once the TCS-N-8 program is completed as it was in 2011 & 2012, it will be the first nonstop aircraft option to be offered by BA for commercial flight or flight-thrancing purposes. The new offer will offer a number of benefits, including the following
–It will offer a discount on the premium on the “first available flight” that can be made using the TCS-N-8 discount program (TCS, TCS-N-1+1+4+5+, TCS-N-2+2+3+6+4+, etc.), in addition to the TCS-N-8 discount offer.
–The company will offer some of the same premium on U.S. flights as on domestic flights for a fraction of the amount that might be offered on commercial flights.
–The offer can include “early retire” (EFT; a premium of 15 percent for 10 hours per week), a “delivery discount”, and a lower rate from the discount for the first flight.
–In order to provide the highest value for the first commercial flight offered by BA
For BA one of their most important goals is to maintain the good customer relationship, their customers help them and BA helps their customers, like the idea of the use of “air miles”. The more you use BA the more air miles you get to use only on BA airlines, this way BA can always keep their customers loyal because they will keep coming back to get more mileage and then a good old discount.
BA also has many other goals set for the future that they will be achieving because their plans are enormous and the potential and ambition is even greater. The company announced its long haul flying program for the summer 2003