INDEX

Sr.N o. 1 Introduction 2 Growth 3 Features 4 7 Ps 5 Strategy Analysis 6 SWOT Analysis 7 PEST Analysis 8 Market Segmentation, Target and Positioning 9 Strategy Options 10 Recommendations 11 References Particulars Pg. No.

Introduction

British Airways is largest airline which offers the flights services to more than 550 destinations. Passengers can chose from first class, business, premium and economy class. A service comes a long way since that first flight. British Airways offers food services and a selection of entertainment options including movies, TV, games, and music. Passengers can even shop in the on-board Highlife shop. British airways is a global airline which offer year round low fares flights with full service an wide global network flying to a form located airports book flight tickets and great value hotels and car hire services.. They also provide the meals facilities on demand BA offers enthusiastic check-in facilities at some airports. The British Airways was formed in September they consist tow companies named BOAC British Overseas Airways Corporation and BEA. 1987 the company becomes privatize and they expand its acquirement with the British Caledonian and routes of some flights stands carrier Dan-Air in 1992. The company of Richard Branson's Virgin Atlantic start stressed relations through British Airways that end with one of the most harsh long drown out defamation step in aviation history" in which British airways act contrite for the movement against the Virgin airlines and paid damages of the company and legal costs. They give order for airbus aircraft in 1998 but for some of the years the airline deal with mainly Boeing customer. In 2007 The Companys start ordering for Boeing 787s and Airbus A380sas its substitute for long fleets. History of British airways After the post war period the Britain main four airlines Intone Air Line, Handley Page Transport, Daimler Airways and British Marine Air Navigation Co Ltd, join in form of Imperial Airways Limited, which creates its routes to Australia and Africa. In the meantime UKs smaller airline companies started working, operating, and combined in 1935 to form of privatization that operated by British Airways Ltd. British South American Airways. New nationalized airlines called BEA , which help the domestic and European flight to fly. Which UK independent airline took over the routes of existing UK other airlines? JA Kay, DJ Thompson, 1996. BOAC start the flights from de Havilland Comet to Johannesburg, which split the previous flight time. The change of the airline industry is start of the mass package-holiday business. British European Airline faces the challenge by establishing BEA Air tours in 1970. In 1972 under the supervision of the chairman David Nicolson combined BOAC and BEA to formed a separate airlines called British airways in 1974, the worlds first supersonic passenger services was launched by British airways with air France Sir john King was appointed as the chairman in 1983 with the mission to privatize the air;lines.1. He appointed Colin Marshall as the CEO of British airways in 1983. He was credited to change the business loss to giant into the most profitable airline carriers in the world,

British airways declare to be "The World's Favorite Airline", as the same time the other large airlines put their great efforts to become the favorite airline in the world. The airline's flights and their route maps were renovate in the early years of King's, he change the image of British airways with brand and advertising and recruit the best staff. Over thousands of jobs were drop in1980s, he managed the substantial improve staff confidence and at the same time modernizing the airline operations. The company offers openhanded incentive for staff to leave which record losses of 545 million, the cost of taxpayers but it is benefit of the future privatized company. Under the motto of "The World's Favorite Airline" British Airways became most profitable airline in the world in 1990s. In 1992 British Airways tie up with the German domestic airline Delta Air Transport and renamed it Deutsche BA and it was sold in June 2003, it become the second largest domestic airline after Lufthansa and they were operating 16 Boeing 737s. British Airways give statement that they are in rise of profits 50%, but it was most terrible since privatization. After the 11September attack Rod Eddington in position about cutting the workflow further. The company announced that the BA going to sell its some percent of stake in Qantas On 8 September 2004, but they will continue with the alliance (such as sharing revenue), mostly on their Australia route.425 million was raised to reduce the debt of the airlines The new theoretical changes in the management of the British airways was declared by Mr.Willie Walsh the CEO of the company and former Aer lingus boss in September 2005 with the aim of saving 300 million by 2008.. BA has strong full-service experience nature for its remaining domestic flights now just to Heathrow and Gatwick because the use of primary airports, and plan of complimentary food and drink. Martyn, Gregory (2000). Year award in 2006 and it also won OAG Airline of the Year 2007, Best Airline Based in Western Europe 2007, Best Transatlantic Airline 2007, and Best Europe - Asia/Australia Airline 2007' in the Airline of the Year Awards run by UK-based OAG.

Price fixing British Airways was charged for price fixing and fined 121.5 million. After admitting the price fixing of fuel surcharges on long fleets, Office of Fair Trading (OFT) forced BA to pay the fine. The staff members both of the companies BA and Virgin Atlantic were joins together in these entire events happens, Virgin Atlantic complain about this events to the authorities after allegation came to light in 2006.for delaying the flight and lost of baggages has made the Ba the worst airlines the losses of the baggages was over double the losses of the average bag losses. It is also worst known for its short medium punctuality haul and it ranks 17th amongst the 21 for long haul delays in flights. Hillary1995. In January BA start its new subsidiary Open Skies which has liberalization of the transatlantic rights of traffic and nonstop flights between European cities and the United States. Flights between New York and Paris began with a single Boeing 757 . On 2 July 2008 British Airways buy French airline L'Avion for 54 million Aircrafts operated Boeing 707 and Boeing 747 from BOAC, 1972-4 a mainly UK built fleet of aircraft. The airline introduced the Boeing 737 and Boeing 757, Boeing 747-400, Boeing 767 and Boeing 777 in the nineties. However, with the exception of 29 of its 777 fleet, it has equipped with British-made Rolls-Royce engines its Boeing aircraft (examples include the Trent 800 on its Boeing 777s, the RB211-524 on its 747-400s and 767s and also RB211535s on its 757-200s).when the company ordered Boeing 707s the manufacturing company placed a condition in front of the BA use only Rolls-Royce equipments for the new aircrafts. British Airways have the suffix 36, for example 737-236, 747-436, 777236they were only two operators of the supersonic airline. The future of Concorde was limited in spite of the expenses on modification of the aircrafts after the crash, and the attack on WTC in11 September 2001 and its maintenance costs.

Growth
If Iberia and British Airways conclude their merger deal as planned in November this year, Willie Walshs desire to look for further merger activity should be met with both fear and promise. Combined with Iberia, the enlarged airline will have a much more focussed and streamlined approach when it comes to looking at future acquisitions as well as potential partners with which they can codeshare or even pull into the oneworld alliance. Part of the problem with this strategy is that British Airways near-term capital commitments all but prohibit the airline from being as rapacious as it wants to be. A cash balance of around 1.5bn against its airplane pre-delivery payments, pension debt and operational costs is not enough for the carrier to be as ambitious as it would like to be. Nevertheless, Walsh knows that merging with Iberia is not going to formulate a cauldron of synergies overnight. Indeed, it will take several years before any real post-merger financial benefit can be realised, and even then the cost of getting those could be negated by the impact of external variables like fuel and airport costs. Having briefly entertained a merger with Qantas, some now see Hong Kong based-Cathay Pacific as a potential suitor or partner. Cathay Pacific has been happy stay relatively unchanged although there is more of an opportunity for a deeper relationship with Qantas than there is with British Airways. Just as Lufthansa has made its presence felt in Europe with buys of BMI, Swiss and Austrian Airlines, British Airways will probably look to emulate the same. Smaller national carriers like Malev, Czech Airlines and JAT Yugoslav Airlines could well be targets. A bigger and better partner would be Turkish Airlines. British Airways has many options and avenues it can explore and theres certainly no rush to move while many of the big legacy carriers continue to bleed money as yield attrition continues its laborious efforts to undermine the recovery that is apparently happening, according to IATA.

Future of British airways Any member of the A320 may be taken by British Airways because they have 32 outstanding options with Airbus. 10 Boeing 777 aircraft delivery position is secured, A320 aircraft ordered by the British airways. The undelivered aircrafts will be delivered to LHR displacing A319s to LGW which will replace Boeing 737-300/500, the lease on which finish at this time. The firm order for four 777-200ER aircraft and they have an option 4 more aircraft, the cost of the aircrafts, the total costing of the order is more than US$800 million at price which is on price list. Four fleet expansions confirmed by the company. BA's first batches of 777 were fitted with General Electric GE90 engines, but for new 16 aircrafts BA sticks to Rolls Royce Trent 800s. This has been continued with the most recent 4 orders as Trent 800 engines were selected as the engine choice. New 36 aircraft for long haul has ordered by the BA. The companies ordered 12 new A380s with have an option on a further 7, and 24 Boeing 787s. For both the order of the engines Rolls Royce Trent engines were selected with Trent 900s powering the A380s and Trent 1000s powering the 787s. The new aircraft going to be deliver between 2010 and 2014. The Boeing 787s replace the 14 of British Airways' Boeing 767 fleet and the Airbus A380s will replace 20 of BA's oldest Boeing 747-400s and it increases the capacity on flight routes to Bangkok, Cape Town, Hong Kong, Johannesburg, Singapore, and Sydney from London Heathrow. For London City airport to New York flights British Airways has order for two new Airbus A318s to provide its premium service. The service, which they provide in 32 lie flat beds in all business class cabins. The A318 is largest aircraft able to run out of London City Airport. The selection of the engine for aircrafts was announced as the CFM International CFM56. Most of BA's fleet of A320 family aircraft are power-driven by IAE V2500 however these engines are not available to power the A318. It was announced after that this route will required a westbound fuel stop. BA orders for six Boeing 777-300ERs and they have options for four more as an interim measure to cover for delays over the deliveries of aircrafts 787-8/9s.

Features of British Airways

The airline operates over 340 flights daily across 44 destinations to Nepal, Sri Lanka, Singapore, Malaysia, United Kingdom, Thailand, Belgium & United States of America on one of the youngest and best maintained fleets. British Airways Citibank Gold Card is the first airline co-branded credit card in the country which earns JP Miles when you spend on the card and redeem for a free flight. It provides facilities like infant and child care, wheel chair assistance, medical emergencies, etc. British Airways is known as Britains World Class Domestic Airline. When one flies with them, one can be sure to receive the finest service from the time one books the ticket to the time one reaches the destination and leaves the airport. British Airways operates over 250 flights daily to 41 destinations across the country. The rapid expansion of their route network has earned them the prestigious Air Transport World Award 2001 for Market Development. British Airways has also won the prestigious H&FS award for the domestic airline for the year 2001 four times They also pride themselves in having the youngest fleet of aircraft in India, consisting of the modern 737-400/700/800 and the ATR 72-500. British Airways is proud to be one of the few airlines in the world to receive the ISO 9001 certification for their in-flight services. British Airways strives to provide service of the highest standard to their customers, both on ground and in-flight. They pride themselves on having an unbeatable record of on-time flight sand providing world-class frequent flyer benefits to their customers , through their alliances with British Airways, KLM Royal Dutch Airlines and Northwest Airlines.

7Ps of British Airways

Product With reference to the above Service Mix, British Airways also consists of both Tangible as well as Intangible products. Starting with the intangible products, they are mainly the 1.On-ground Services 2. In-flight Services. Pricing The level of class in British Airways that is the First Class ,the Business Class and the Economy Class influences the pricing strategy of British Airways. This means higher the rate for the best class and lower the rate for a good class The classification of prices as per the 3 classes are a s follows with reference to Bombay -London journey First Class Bombay > London London > Bombay Rs.3,21,628(2,64,670 + 56,958 taxes) Business Class Bombay > London London > Bombay Rs.1,13,184(80,000 + 33,184 taxes) Economy Class Bombay > London London > Bombay Rs.48,582(28,900 + 19,682 taxes) Other than the above 3 classes another factor that influences the prices is the season in which one buys a ticket. For instance, if you book a ticket from London during Christmas season, the price of the ticket will be high as compared to the other seasons.

Promotion British Airways launches New in-flight Lifestyle Promotion

 It give its Club Premiere passengers travelling on domestic routes within India the opportunity to own some of the worlds most respected brands The first offering from the new service named Jet Good Life is an original masterpiece by the renowned Master of Art, M.F Hussain, in association with ABM AMRO Van Gogh Preferred Banking. British Airways has for the past three years been rewarding its customers under Jet Elite Surprises umbrella where prices worth Rs. 3 crores have been given away in association with the several key sponsor brands such as Sony, IBM, Rolex, Tissot, Ford,Toyota etc. Places British Airways must see to it that it has an office nearby to the airport. This makes the reservations, confirmations and other flight details to be checked easy and quick. Even if it doesnt have an office nearby, it should atleast leave the telephone numbers of its concerned department with the customers. The electrifying ambience of the offices puts a good impression about the company on the customers. There is a British Airways office in the Chatrapati Shivaji International Airport which helps the passengers in making it easy to approach the office in case of an emergency People People of the Airline Sector are the service providers who come in direct contact with the customers. For instance, British Airways ticketing agents come in direct contact with the customers while booking the ticket. They come under the Ground Crew Members Customers of British Airways booking and confirming their ticket who are coming in direct contact wit the Ground Crew Members. In the aircraft, the Air Hostess and other Cabin Crew come in direct contact with the passengers who are the customers of British Airways. Thus, these people who render the in-flight services to the customers are termed as Flight Crew Members

Process With reference to British Airways, it constantly helps its customers by informing them about the flight details in order to acquire customer satisfaction. They are striving hard to enhance the level of satisfaction of the customers that is from being good to become the best. One of the main service that British Airways renders in Process is the check-in options in order to make the flight procedures easy and comfortable. British Airways has numerous check-in options for you to choose from. Physical Evidence British Airways has been striving continuously to deliver quality service to its customers. British Airways has given its aircrafts a good exterior and the flights have been maintained in an excellent manner. The interiors have also been made in a manner which is pleasant to the passengers so that they feel comfortable and enjoy the flight

Strategy analysis
Mission British Airways have the slogan The World's Favorite Airline and the company's mission is to provide the full service experience and achieve the target in both, in-flight and on the ground. Among British Airways strengths is its brand name, and the company has shown in the past declare itself as 'the world's favorite airline'. Despite controversy, through its business strategy British Airways has remained among the strategic players in air travel.( M Cronshaw1991) Vision The vision of Ba must be carried out through the organization is the aim of the company which is the key to the company success. as all the competitor in the market know that the service experiences are more matter than anything and has geared this process to situ and meet up the expectation of the people British Airways has leapt forward again, now defining its target as being the 'undisputed leader in world travel'. SWOT Analysis

British Airways is one of the world's leading scheduled premium international airlines.The companyhas a strong fleet base to complement its robust route network. Strong fleet operations of BritishAirways helps it to attain a competitive advantage over its peers. However, intense competition maypressurize the operating margins of the company. Strength It is one of the best company in airlines. Ambition to be no. 1 airline in the world. Innovated. Weakness Competitive capabilities. Intangible assets . Controversy

Opportunity Economic conditions Expectations of stakeholders Technology

Threats Crashes Technical problems Changes in market.

Strengths Strong fleet operationsBritish Airways has a strong fleet base to complement its robust route network. At the end of March2010, the company had 238 aircraft in service.The company operates 49 Boeing 747s, 46 Boeing777s, 38 Airbus A320s, 33 Airbus A319s, 19 Boeing 737s, 21 Boeing 767s, 9 Boeing 757s, andmany other aircraft. In addition, the company ordered 24 new Boeing 787 aircraft which will join itslonghaul fleet from 2012.These aircrafts are 30% more fuel efficient than the Boeing 767s they willreplace and make only a quarter of the noise of a Boeing 747.They will be powered by RollsRoyceTrent 1,000 engines.The strong fleet operations complement the company's scheduled passenger and cargo businesses.In FY2010, the company carried more than 32 million passengers and 760,000 tonnes of cargo. Inaddition, it enabled the company to serve more than 300 destinations worldwide. Diverse fleetoperations also allow the company to improve its returns by effective utilization of its asset base.Therefore, strong fleet operations of British Airways help the company to attain a competitiveadvantage over its peers.Strong market position and brand image in the UK

British Airways is the UKs largest international scheduled airline. It is one of the worlds leadingglobal premium airlines.The companys principal place of business is London with significant presenceat Heathrow, Gatwick and London City. In FY2010, the company carried nearly 32 million passengersand 760,000 tonnes of cargo to destinations in Europe, the Americas and throughout the world.According to a 2010 annual survey of top 500 consumer brands conducted by Superbrands, BritishAirways figured in the fourth position, behind Microsoft, Rolex and Google and ahead of BBC,Mercedes-Benz and CocaCola.The company's strong brand image gives it significant competitiveadvantage and helps it to register higher sales growth in domestic, as well as in international markets.Brand recognition allows British Airways to charge premium prices than its competitors and thusregister relatively higher margins. Online services British Airways focuses on offering online services to retain old customers and to attract newcustomers. It has made several upgrades to the e-services offered on its website, "www.ba.com".The online portal is helping British Airways to drive down costs and increase revenues. Almost athird of all the company's bookings are made on ba.com, with almost half of all European leisurefares sold via the UK site, as a testimony to its popularity with customers.The customers are alsoprovided with the option to book hotels and hire cars through the website. In FY2009, the companyintroduced a new feature allowing customers to upgrade their booking at any time between buyinga ticket and checking-in online. British Airways had launched a new service, allowing customers tocheck-in or access real time arrivals and departures information through their mobiles.Therefore,e-services help the company to attract more customers, enabling it to generate more revenues. Weaknesses Labor disputeThe company has been involved in a conflict over wage and labor issues and it has been sufferinglow bargaining power due to existence of collective bargaining agreements and labor unions. In May2010, British Airways faced its first national strike since 1997 following a dispute over pay andconditions of its cabin crew. Further, dispute over working practices has escalated as British Airwayswithdrew staff travel concessions from workers who joined strike action and employed disciplinaryprocedures to sack and suspend crew members, including many union representatives. For instance,Unite held 22 days of strikes in 2010 that incurred cost of over 150 million ($239.5 million) to thecompany. Unite represents about 25,000 workers at British Airways, such as baggage handlers,engineers and check-in staff. Such labor issues disrupt operations which can hinder the reputationof British Airways. Further, the company also has to incur higher expenses to meet the expectationsand demands of the workforce which could strain its revenues.Poor performance in all geographic regions

British Airwayssales witnessed poor performance in all of its geographic regions, including Europe,the Americas, Africa, Middle East and Indian sub-continent, and Far East and Australasia. Europe,the company's largest geographic market, accounted for 61.2% of the total revenues in FY2010.Revenues from Europe reached 4,891 million ($7,807.7 million) in FY2010, a decrease of 12.9%compared to FY2009.The Americas, which is the second largest geographical market, accountedfor 20.7% of the total revenues in FY2010. Revenues from the Americas reached 1,651 million($2,635.6 million) in FY2010, a decrease of 4% compared to FY2009. Similarly, the company witnessed 16.5% decline in revenues in Africa, Middle East and Indiansub-continent, and 7.7% in Far East and Australasia. As a result, the company generated revenuesof 7,994 million ($12,761.1 million) during FY2010, a decrease of 11.1% compared to FY2009.Therefore, poor performance of British Airways in almost all geographic regions had a significantimpact on its overall financial performance. Declining operating efficiency British Airways recorded declining efficiency in terms of operating profits and margins since FY2008.The operating profits of the company have decreased from 878 million ($1,401.6 million) in FY2008to operating loss of 220 million ($351.2 million) in FY2009 and it further decreased to operatingloss of 231 million ($368.8 million) in FY2010. Similarly, the operating margin of the companydecreased from 10% in FY2008 to -2.4% in FY2009 and further decreased to -2.8% in FY2010.Thecompany's declining operating efficiency implies inefficient cost management and the lack of favorableenvironment for the management to make firm decisions. Continuation of this trend could impactthe investors' confidence, and reduces the availability of resources to pursue growth plans. Opportunities Global air freight industry on road to recoveryAir freight, a leading indicator of the health of world trade, has shown signs of recovery. Accordingto International Air Transport Association (IATA), recovery in the air freight industry worldwidecontinues at a good pace, with worldwide cargo demand up by 28.1% in March 2010 compared tothe same month last year. IATA pointed out that the return of demand was far better than had beenanticipated.The pace of improvement, based on an improving global economic situation is muchfaster.According to IATA, global air freight operations are now within 1% point of recovering to its previoushigh point of early 2008, restoring freight volumes which shrank by over one quarter during thesecond half of 2008.The strongest recoveries have been witnessed in Latin America and theAsia-Pacific region, which have respectively seen increases in demand of 47.9% and 34.1%. NorthAmerica has also seen a strong improvement in demand, up 32.2%.The main activities of BritishAirways and its subsidiaries are the operation of international and domestic scheduled air services for the

carriage of passengers, freight and mail and the provision of ancillary services.Thus thecompany is well positioned to capitalize on the growing global air freight industry. Global tourism to rebound strongly in 2010 Emerging countries are leading a return in tourist arrivals following more than a year of decline dueto the global economic downturn. International tourist arrivals are estimated to have increased by7% in the first two months of 2010 to 119 million, according to the April interim update of the UnitedNations World Tourism Organization (UNWTO).The results of recent months suggest that recoveryis underway, and even somewhat earlier and at a stronger pace than initially expected. UNWTOpredicts growth of between 3% and 4% in 2010. According to World Travel & Tourism Council(WTTC), the travel and tourism economy is expected to grow by 4.4% per annum in real termsbetween 2010 and 2020, supporting over 300 million jobs by 2020, which amounts to 9.2% of totalemployment and 9.6% of global GDP. By region, Asia is expected to continue showing the strongest rebound while Europe and the Americasare likely to recover at a more moderate pace. Africa achieved a positive growth in internationaltourist arrivals of 3%, to 46 million (5% of world total) in 2009.The region is forecasted to continueits positive trend following the 2010 FIFA World Cup.With the anticipated growth, business andconsumer confidence has picked up.This growth in world tourism industry will enhance airlinebusiness. British Airways is well positioned to benefit from increasing global tourism industry.Thisin turn would help the company to generate additional revenues. Merger agreement with Iberia The airline industry is heading for more consolidation because of recent recession and drop in airtravel. In November 2009, British Airways and Iberia signed a binding memorandum of understandingfor a proposed merger of the two companies to create a new airline group in a transaction valuedat approximately $7,000 million.The proposed merger will result in the creation of a new holdingcompany (TopCo) that will own both the existing airlines and whose shareholders will be the currentshareholders of both the company. Under the terms of the proposed merger, British Airwaysshareholders will receive one new ordinary share in TopCo for every existing British Airways ordinaryshare held by them and Iberia shareholders will receive 1.0205 new ordinary shares for every existingIberia ordinary share held by them. The new group will combine the two companiespositions in the UK and Spain and enhance theirstrong presence in the international long haul markets, while retaining the individual brands andcurrent operations of each airline.The merger is expected to generate annual synergies ofapproximately E400 million ($507.2 million) from the fifth year and enhance customer benefits witha larger combined network for passengers and cargo. In

addition, the merger would facilitate boththe companies to deal with slow earnings, higher fuel costs and the deepening economic downturn.The merger would benefit both the companies in terms of combined balance sheet, synergies andnetwork fit.The transaction would also strengthen the Oneworld alliance and Madrid's position asthe European gateway to Latin America. Threats Intense competition and price discounting The airline industry is highly competitive.The principal competitive factors in the airline industry arefares, customer service, routes served, flight schedules, types of aircraft, safety record and reputation,code-sharing relationships, capacity, in-flight entertainment systems and frequent flyer programs.Airline profits are sensitive to even slight changes in average fare levels and passenger demand.British Airways face direct competition from other airlines on its routes, as well as from indirect flights,charter services and from other modes of transport. Some of its competitors are AMR, Air FranceKLM, Cathay Pacific Airways, Continental Airlines, Delta Air Lines, Lufthansa, Qantas Airways,Ryanair Holdings, Southwest Airlines, UAL and Virgin Atlantic Airways. Price competition betweenairlines occurs through price discounting, fare matching, increased capacity, targeted sale promotionsand frequent flyer travel initiatives. A relatively small change in pricing or in passenger traffic couldhave a disproportionate effect on an airline's operating and financial results. Moreover, deregulation has had a significant impact on the companys long haul business.The firstphase of the EU-US Open Skies agreement, which took effect in mid 2008, has altered the competitivelandscape on transatlantic routes, especially at Heathrow.The US carriers such as Delta, Continentaland US Airways have all commenced new services from Heathrow in 2009. New entrants and existingcarriers from the Middle East, Africa and India have also added capacity at Heathrow.The companysown OpenSkies subsidiary provides direct services to the US from Paris. Moreover, a new generationof wide-body aircraft is also changing the competitive landscape. For instance, the Airbus A380 isnow well established at Heathrow, with three airlines offering a total of 28 departures a week during2009 and additional services confirmed for 2010.Therefore, such intense competition may pressurizethe operating margins of the British Airways. Price volatility in petroleum markets The demand for petroleum and related products has historically been cyclical and sensitive to theavailability and prices of oil and related feedstock. Historically, international prices of crude oil andrefined products have fluctuated widely due to many factors that are beyond the control of companieslike British Airways. Fuel prices and availability are subject to wide price fluctuations based ongeopolitical issues and supply and demand, which can

neither be controlled nor accurately predicted.According to IATA, jet fuel price as of August 2010 was $92.4 per barrel, an increase of 12.6% overAugust 2009 jet fuel price. It is forecasted that the average jet fuel price in 2010 would be $88.3 perbarrel. Fuel has been one of the companys largest operating expenses for the last several years.In FY2009, British Airways' aircraft fuel expenses stood at 2,372 million ($3,786.5 million).Thevolatility of global and regional oil prices exposes the company to extreme fluctuations in earnings,which is likely to have an adverse consequence on its growth initiatives. Any inability to obtain jetfuel at competitive prices would materially have an impact on British Airways' results of operationand financial condition. Regulatory Conditions The airline industry is highly regulated. Airlines are subject to extensive regulatory and legalcompliance requirements that result in significant costs.The companys operations are subject tonumerous domestic and international laws, regulations, and restrictions. British Airways has operationsin many parts of the world and operates in a highly regulated environment. Non-compliance withthese laws, regulations, and restrictions could expose the company to fines, penalties, suspension,or debarment, which could have a material adverse effect.The company expects to continue to incurexpenses in connection with complying with government regulations. Additional laws, regulations,taxes, and airport rates and charges have been proposed from time to time that could significantlyincrease the cost of airline operations or reduce the demand for air travel. If adopted, these measurescould have the effect of raising ticket prices, reducing revenue, and increasing costs.This in turnwould increase obligations on British Airways and would adversely impact its margins.

PEST analysis
The following factors are likely to have an influence on the airline industry and shouldtherefore be taken into account when formulating a plan for British Airways. Politico-legal factors The threat of war in the Middle East and frequent terrorist attacks are adding to the growing hysteria among the masses regarding terrorism which is reducing the number of people willing to travel by air to the political hotbeds. An EU east-enlargement may provide access to viable, new markets. A new legislation (e.g. Climate Change Bill) enforcing tighter environmental regulation will increase operational costs for BA (British Airways. 2009)

 Trade unions are being recognized and there have been strikes such as cabin crew strikes etc. BA needs to maintain harmony and avoid such outbursts for uninterrupted operations. Economic factors Fuel costs are likely to increase, higher security will have to be deployed because of the threats of terrorism, and insurances will be costlier. It is not definite as to when the recession will end and the economy but till then business travellers will cut down on their travel expenses and are likely to substitute air travel with alternatives such as video conferencing which is considerably cheap .This is definitely a concern for the future as people might permanently switch to video conferences. Single currency has been established in Europe and British airways will stand to profit from it as Europe becomes more integrated. Travelling will be much easier for people With the recession, all airlines are dropping their rates and British Airways will face stiff competition. Consumers have cut down their spending and many are choosing not to travel by air pertaining to the relatively high cost compared to other modes of travel for short distances. Increasing unemployment followed by the recession will work in favour of BA as it would mean they have a higher bargaining power as an employer. They can effectively cut labour costs without compromising with quality of service. Socio-cultural factors To win over the French and German public might cause problems as there appears stillto be a general reluctance in these countries to use credit cards over the phone andInternet. The UK has an aging population and this might be profitable for BA as old people aremore inclined to travel for leisure and such. Consumers are becoming more aware about the environment. Failure to adoptenvironment friendly strategies will be detrimental for BA (British Airways, 2009). Technological factors A key issue will be the extent to which technological advancements such as the use of the Internet on distribution and cost synergies from industry consolidation can offsetupward pressures on prices and costs. The availability of internet booking has enabled passengers who like air travel to dotheir work online without having to stand in the queue. People no longer have to check in at the airport and wait for the staff to hand them boarding passes, they can simplycheck in the

night before and print it at home. This will allow BA to handle all its passengers with just 4 to 5 people, earlier they required 30 to 40 people. They willsave a lot of money. British Airways has to keep track of technological developments in the field of ecommerce and aircraft manufacture to gain competitive advantage. They need to updatetheir equipments and keep up with other airlines. BA was recently(18th December 2010) accused of running third world like operations as they had to cancel flights because of heavy snowfall due to the lack of sophisticated de-icing and snow clearingequipment. Passengers were distraught and this could be detrimental to its reputation

Market Segmentation,Target And Positioning .

Bases Of Segmentation: Segmentation by British Airways is done on the basis of following 1) INCOME (DEMOGRAPHIC) 2) LIFESTYLE (DEMOGRAPHIC) 3) EDUCATION ( PHYSIOGRAPHIC ) 4) Geography (i.e:- based on city or Country) 1st three type of segmentation are covered in various classes offered by British airways in different aircrafts described as above FIRST CLASS In this all seats convert to a fully-flat bed All seats in First have a 29-inch widescreen LCD monitor with audio-video on-demand systems (AVOD), in seat power supply, and USB ports etc. British Airways is the first Indian airline to offer fully-enclosed suites on its aircraft; each suite has a closable door, making for a private compartment. Skytrax consumer airline reviewers recently rated British Airways First Class as being 44th best in the world. So this is for very rich peole. PREMIERE CLASS Premire (Business Class) on the Airbus A330-200 and Boeing 777-300ER international fleet has a fully-flat bed with AVOD entertainment. Seats are configured in a herring bone pattern (1-2-1 on the Boeing777-300ER, and 1-1-1 on the Airbus A330-200), with each seat offering direct access to the aisle. ECONOMIC CLASS This is a class for middle income group of people with normal seats and less luxurious service. The cost of this class is the lowest .Its basically to attract people who travel in 1st and 2 nd class A.C. Even a middleclass can effort this class. GEOGRAPHIC Now majority of airlines operate only in major cities between which they can get traffic .Same way British airways operate in major cities where they get traffic and in major countries .so in india it operates in cties like Ahmedabad, Mumbai, Delhi, Hyderabad, Banglore , Chennai etc and in countries likeLndon, America, South Africa, China, France etc .so this segmentation is done with the help of traffic data.

British airways has positioned itself as a premium brand airline that would compete with the best in the world. It has positioned itself as a full service carrier airline with strong domestic & international operations with unparallel & unique in flight entertainment options. With its international operations, British Airways has tapped the large nonresident Indians (NRIs) segment that resides in the USA and Europe. TARGET The companys advantage of being an early British Airways targets $100 million non-ticket revenue in FY13 In an attempt to raise its non-ticket revenue, private carrier British Airways is seeking shareholders nod to set up a marketing services company and a training academy. A senior airline official told NDTV that British Airways is targeting to have at least $100 million non-ticket revenue this financial year itself. When contacted, British Airways vice-president, marketing, Manish Dureja said: All I can say is that we are going to unbundle the services offered where the passenger will choose the services he/she wants to pay for. These services could include meals, miles, baggage, etc. Non-ticket or ancillary revenue is currently at just 3 per cent of the total revenue at about Rs 121 crore, but the airline believes the potential is huge. Centre for Aviation South Asia CEO Kapil Kaul says: British Airways can achieve $100 million in ancillary revenue this year or even more if it has an organization to leverage this opportunity. To get the operations in place, six months are enough, and so in 12 to 18 months it can gear up its operations and marketing to boost its non-ticket revenues. Globally, ancillary revenue for airlines stands at $33.5 billion, even though in India it is still small. CAPA is also preparing a report on the ancillary revenue opportunity for airlines in India, which is expected to be published in two months. Some of the steps British Airways is taking in that direction include setting up two fullyowned subsidiariesone a marketing services company and another firm for a training academy. The marketing services company will be engaged in the business of managing reward points and loyalty programmes for its partners. Seeking shareholders approval, british Airways said: The JetPrivilege programme is managed and operated in-house. Your company proposes to transfer the JetPrivilege programme to the marketing services company and in the process transform the JetPrivilege programme into a larger retail-based coalition loyalty programme, and through its operations unlock greater commercial value. Meanwhile, british Airways has also concluded an agreement and will soon launch cobranded credit and debit cards with HDFC Bank. british Airways is also finalizing co-brand partnerships with American Express and ICICI Bank. In May, Citibank had announced that it was ending its 12-year pact with british Airways, but the airline has already found new

partners. Airlines have been looking at all kinds of revenue opportunities to get funds as investors have been unwilling to take exposure to the Indian aviation sector. In its communication to the shareholders, british Airways management explained why the company was seeking an enabling resolution to raise $400 million through equity yet again as the special resolution was passed in its annual general meeting last year as well. british Airways said: Due to the unfavourable and uncertain market conditions, this proposal could not be implemented. The intention of the company to raise capital still holds good, and therefore it is proposed to approach the potential investors as and when there is an improvement in the situation. The special resolution passed last year will expire on August 16. The companys annual general meeting this year is scheduled on August 3 in Mumbai. Financial Position british Airways had reported profit after tax of Rs. 400mn (US$ 9.0 mn) for the third quarter for the year2006; operating revenues were up by 31%.Although in year 2007 british Airways announced it has incurred a net loss in the first quarter of fiscal 2007 amounting to Rs 449.8* million compared with a net income of Rs 953 million in the corresponding previous year quarter.

Positioning Strategy
Positioning strategies can be conceived and developed in a variety of ways. It can be derived from the object attributes, competition, application, the types of consumers involved, or the characteristics of the product class. All these attributes represent a different approach in developing positioning strategies, even though all of them have the common objective of projecting a favorable image in the minds of the consumers or audience. There are seven approaches to positioning strategies: (1) Using Product characteristics or Customer Benefits as a positioning strategy This strategy basically focuses upon the characteristics of the product or customer benefits. For example if I say Imported items it basically tell or illustrate a variety of product characteristics such as durability, economy or reliability etc. Lets take an example of motorbikes some are emphasizing on fuel economy, some on power, looks and others stress on their durability. Hero Cycles Ltd. positions first, emphasizing durability and style for its cycle. At time even you would have noticed that a product is positioned along two or more product characteristics at the same time. You would have seen this in the case of toothpaste market, most toothpaste insists on freshness and cavity fighter as the product characteristics. It is always tempting to try to position along several product characteristics, as it is frustrating to have some good characteristics that are not communicated. (2) Pricing as a positioning strategy - Quality Approach or Positioning by PriceQuality Lets take an example and understand this approach just suppose you have to go and buy a pair ofjeans, as soon as you enter in the shop you will find different price rage jeans in the showroom say price ranging from 350 rupees to 2000 rupees. As soon as look at the jeans of 350 Rupees you say that it is not good in quality. Why? Basically because of perception, as most of us perceive that if a product is expensive will be a quality product where as product that is cheap is lower in quality. If we look at this Price quality approach it is important and is largely used in product positioning. In many product categories, there are brands that deliberately attempt to offer more in terms of service, features or performance. They charge more, partly to cover higher costs and partly to let the consumers believe that the product is, certainly of higher quality. (3) Positioning strategy based on Use or Application Lets understand this with the help of an example like Nescafe Coffee for many years positioned it self as a winter product and advertised mainly in winter but the introduction of cold coffee has developed a positioning strategy for the summer months also. Basically this type of positioning-by-use represents a second or third position for the brand, such type of positioning is done deliberately to expand the brands market. If you are introducing new uses of the product that will automatically expand the brands market.

(4) Positioning strategy based on Product Process Another positioning approach is to associate the product with its users or a class of users. Makes of casual clothing like jeans have introduced designer labels to develop a fashion image. In this case the expectation is that the model or personality will influence the products image by reflecting the characteristics and image of the model or personality communicated as a product user. Lets not forget that Johnson and Johnson repositioned its shampoo from one used for babies to one used by people who wash their hair frequently and therefore need a mild people who wash their hair frequently and therefore need a mild shampoo. This repositioning resulted in a market share. (5) Positioning strategy based on Product Class - In some product class we have to make sure critical positioning decisions For example, freeze dried coffee needed to positions itself with respect to regular and instant coffee and similarly in case of dried milk makers came out with instant breakfast positioned as a breakfast substitute and virtually identical product positioned as a dietary meal substitute. (6) Positioning strategy based on Cultural Symbols - In todays world many advertisers are using deeply entrenched cultural symbols to differentiate their brands from that of competitors. The essential task is to identify something that is very meaningful to people that other competitors are not using and associate this brand with that symbol. british Airways uses maharaja as its logo, by this they are trying to show that we welcome guest and give them royal treatment with lot of respect and it also highlights Indian tradition. Using and popularizing trademarks generally follow this type of positioning. (7) Positioning strategy based on Competitors - In this type of positioning strategies, an implicit or explicit frame of reference is one or more competitors. In some cases, reference competitor(s) can be the dominant aspect of the positioning strategies of the firm, the firm either uses the same of similar positioning strategies as used by the competitors or the advertiser uses a new strategy taking the competitors strategy as the base. A good example of this would be Colgate and Pepsodent. Colgate when entered into the market focused on to family protection but when Pepsodent entered into the market with focus on 24 hour protection and basically for kids, Colgate changed its focus from family protection to kids teeth protection which was a positioning strategy adopted because of competition.

Strategic Options
In order to stay with the competition and to keep the customers interested, they undertake lot of promotion activities. BA jointly organizes large number of promotions with the other companies serving the similar target customers.BA gets in touch with passengers, target loyalty club members.

Recommendation
British airways is one of the best airline in alliance industry with its new technologies and good services. The company is able to attract more customers by providing them some more services. They should have more of the customer service and loyalty programs. The company should provide discounts for their corporate clients. The company should get in touch with their clients when they have some promotional offers.

References:

http://www.usbusinessfinder.com/british-airways.html http://www.ba.com/british http://en.wikipedia.org/wiki/British_Airways JA Kay, DJ Thompson - Privatization, 1996 Simmons, K Lewis, J Barrett - Ecological Economics, 2000