Brittni PladsonBrittni PladsonKyle BachandKyle Bachand

Stacy LiStacy LiYang LiuYang Liu

Introduction – BrittniIntroduction – BrittniHistory – YangHistory – Yang

SWOT Analysis – KyleSWOT Analysis – KyleCompetition – StacyCompetition – Stacy

Industry Analysis – BrittniIndustry Analysis – BrittniRecommendations/Conclusion – KyleRecommendations/Conclusion – Kyle

HistoryHistory

The History of British Airways The History of British Airways The Status Quo of British AirwaysThe Status Quo of British Airways The Further Plan of British AirwaysThe Further Plan of British Airways

The History of British AirwaysThe History of British Airways

In 1919, the first scheduled In 1919, the first scheduled international passenger serviceinternational passenger service

In 1952, the first jet serviceIn 1952, the first jet service In 1976, the first supersonic serviceIn 1976, the first supersonic service

The Status Quo of British AirwaysThe Status Quo of British Airways

Subsidiary CompanySubsidiary Company One worldOne world PartnershipPartnership Hubs: Hubs:

London Heathrow AirportLondon Heathrow Airport GatwickGatwick Manchester International AirportManchester International Airport

The Further Plan of British AirwaysThe Further Plan of British Airways

The fleet size is 253, including 19 The fleet size is 253, including 19 flights in ordering.flights in ordering.

New purchase to expand the long-New purchase to expand the long-haul fleet.haul fleet.

The Struggles in OperationThe Struggles in Operation

British Airways Ethnic LiveriesBritish Airways Ethnic Liveries British Airways Cross Controversy British Airways Cross Controversy Child Protection PolicyChild Protection Policy British Airways should pay more British Airways should pay more

attention to being considerate before attention to being considerate before carrying out any policy. carrying out any policy.

SWOT AnalysisSWOT Analysis

StrengthsStrengths Industry LeaderIndustry Leader Customer ServiceCustomer Service One World AllianceOne World Alliance Business SegmentsBusiness Segments

Network AirlineNetwork Airline Regional AirlineRegional Airline Non-airlineNon-airline

WeaknessesWeaknesses

#3 among European Airlines#3 among European Airlines FleetFleet

Boeing instead of British manufacturingBoeing instead of British manufacturing

OpportunitiesOpportunities

AlliancesAlliances More routes covering more More routes covering more

destinations in more countriesdestinations in more countries FleetFleet

ThreatsThreats

New EntrantsNew Entrants Power of SuppliesPower of Supplies Power of BuyersPower of Buyers Availability of SubstitutesAvailability of Substitutes Competitive RivalryCompetitive Rivalry

Main CompetitorsMain Competitors

Virgin Atlantic AirwaysVirgin Atlantic Airways United AirlinesUnited Airlines Air France-KLMAir France-KLM

Virgin Atlantic Airways Virgin Atlantic Airways

The most primary hostile domestic The most primary hostile domestic competitorcompetitor

Purpose: breaking the monopoly of British Purpose: breaking the monopoly of British

Airways, becoming the largest Airways, becoming the largest

airlines company in UK.airlines company in UK. Greatly improved the quality of Economic Greatly improved the quality of Economic

ClassClass

British Airways vs. Virgin AtlanticBritish Airways vs. Virgin Atlantic

Passengers Carried: 35.5 million Passengers Carried: 35.5 million vs. 4.0 millionvs. 4.0 million

Counties covered: 73 vs. 18Counties covered: 73 vs. 18 Number of aircraft: 234 vs. 43Number of aircraft: 234 vs. 43 2006 Revenue: $14.8 billion vs. 2006 Revenue: $14.8 billion vs.

$1.91 billion$1.91 billion

United Airlines United Airlines

World's 2World's 2ndnd-largest airline by -largest airline by revenue-passenger-kilometersrevenue-passenger-kilometers

World’s 3World’s 3rdrd-largest by total operating -largest by total operating revenuesrevenues

World’s 4World’s 4thth-largest by total -largest by total passengers transportedpassengers transported

Air France-KLM Air France-KLM

World’s World’s the the largestlargest airline company airline company by total operating revenuesby total operating revenues

World’s the 3World’s the 3rdrd-largest airline -largest airline companycompany by passengers-kilometersby passengers-kilometers

the most profitable company in the most profitable company in EuropeEurope

COMPETITION AMONG BA,UA COMPETITION AMONG BA,UA AND AF-KLMAND AF-KLM

442369

228 234

460

554

222 210225

0

100

200

300

400

500

600

Ranking byFortune 500

Aircraft Destinations

Chart 4. Comparison 1 (2006)

BA

UAL

AF-KLM

COMPETITION AMONG BA,UA COMPETITION AMONG BA,UA AND AF-KLMAND AF-KLM

4995756861

102422

1518917379

26099

804.501110.8

0 20000 40000 60000 80000 100000 120000

Employees

Revenues(millionUSD)

Profits(million USD)

Chart 5. Comparison 2 (2006)

AF-KLM

UAL

BA

Strengths of UA and AF-KLMStrengths of UA and AF-KLM

Larger scale Larger scale Creating and occupying new markets Creating and occupying new markets

at the first time. Esp. China marketat the first time. Esp. China market focusing on high cost-performancefocusing on high cost-performance

WHAT DOES BA DO?WHAT DOES BA DO?

Cutting down the costsCutting down the costs Laying off the Laying off the people people Cooperating with Google Earth Cooperating with Google Earth Creating a brand new super-Creating a brand new super-

economic class economic class

The Airline IndustryThe Airline Industry

““Intensely Competitive Market”Intensely Competitive Market” OwnershipOwnership DOT ClassificationDOT Classification

InternationalInternational NationalNational RegionalRegional CargoCargo

Issues with the industryIssues with the industry

Physical cost of planesPhysical cost of planes WeatherWeather Fuel costs: Fuel costs: 14-16% of total costs14-16% of total costs

Labor: Labor: 40% of total costs40% of total costs

Intense competitionIntense competition

Recommendations/ConclusionRecommendations/Conclusion

Merger/AlliancesMerger/Alliances Safety/SecuritySafety/Security ComfortComfort IncentivesIncentives

Frequent flier miles Frequent flier miles

QUESTIONS?QUESTIONS?