Sales and Marketing
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The report focuses on conducting a PESTLE Analysis of tourism based business institution operating in the United Kingdom tourism market. The report apart from introducing the company would also focus on understanding the impacts of the different macroeconomic factors like political, economic, social, technological, environmental and legal on the operations of the firm. It would also reflect on the strategies undertaken by the firm for countering the identified impacts.
British Airways operates as the leading airlines company operating in the United Kingdom market. The airlines institution operates on an international level that helps its passengers to fly to over 170 different international destinations. The airlines company contributes in helping the customers fly to international destinations at best quality airports in an easy and convenient fashion. British Airways (BA) focuses on enhancing its customer servicing experience based on the use of latest technologies and an efficient and trained workforce (British Airways, 2016).
The emergence of Brexit had significantly impacted the market for British Airways owing to decreasing consumer confidence and also a fall in the level of revenues for subsequent decline in the level of foreign exchange. Further, the breaking up of United Kingdom from European Union is also taken to cause increased amount of employee retrenchment in British Airways which in turn would further affect the operations of the airlines company. The employees operating in companies operating across the European markets are observed to relocate to European firms for such of increased dividends and high paid jobs. Further, the growth of terrorism in the international market has also significantly affected the market of British Airways (Pfanner, 2016).
The management of British Airways evaluate a riskier short term trading environment with reduction in the level of profitability and prices of shares and stocks. In the long run, the airlines company however is focusing on development of newer routes that would help BA to fly over to different international regions. The planning of flying over to new and international destinations would help BA in enhancing its revenue and profitability potential (Farrell, 2016). An effective instance in the above direction is BA’s planning of incorporating Boeing 747-400 for expanding its base in the Nairobi market. The airline plans to enter the Kenyan market based on the generation of travels for leisure and business purposes. The adding of the Boeing aircraft is evaluated to contribute in the generation of 784 seats for the Kenyan region (IGADWAH, 2016).
The breaking up of United Kingdom from the European Union has potentially impacted the revenue potential of British Airways (BA) in terms of generating huge losses in the foreign exchange income category of around GBP 124 million. The fall in the value of GBP against the American Dollar significantly affected the value of BA’s shares based on generating a reduction of around 33 percent. Moreover, other extraneous factors like growth of terrorism, growing uncertainty regarding UK’s referendum in European Union and also growing weakness of the company pertaining to its operation in the Latin American nations further affected its revenue and share prices (Smith, 2016).
The management of British Airways is focusing on inclusion of larger number of jets that would contribute in meeting the increased demands of its passengers. Moreover, the management is also keen on including A380 superjumbo aircrafts that would help in increasing the revenue margins of British Airways. British Airways is also focusing on expanding into international markets based on formation of strategic alliances with other key airlines companies based along the Qatar region. This is taken to help BA in gaining an increased flow of passengers (Katz, 2016).
The growth of terrorism in international tourism is observed to potentially impact the tourism and airlines operation of British Airways. Survey carried out reflects that the advent of terrorist activities on a large scale has affected leisure tourism along different international markets. The recent terrorist attack on Paris is observed to significantly affect the international tourism operations of airline companies like British Airways. Further, demand related to business travels and also for long haul routes is also observed to potentially decline for airline companies like British Airways on account of growth of terrorist activities. International tourism and airline based travel is also observed to considerably increase for emerging economies like Latin America, Russia and also for the West African regions compared to European countries and United States (Fletcher, 2016).
British Airways to effectively capture the mindset of international tourists focusing on touring to emerging markets like China has planned for direct flights that would help its passengers for touring over to China directly from United Kingdom. Further, BA also focuses on designing an online and social networking platform that would help the Chinese consumers in booking of seats in airlines and hotels (CIC, 2014).
British Airways continually focuses on incorporation of new technologies that would contribute in enhancing the level of customer experience. The management of the British airline company effectively focuses on the incorporation of communication technologies like iPhones and iPads for conducting the internal operations in a seamless and integrated fashion. Further, the airlines company also focuses on the employment of an effective Enterprise Resource Management System like SAP that encourages the generation of flight data from Airman Systems. The use of the above technological infrastructures and resources helps British Airways in effectively managing components and inventories for generation of quality services to its customers in an efficient fashion (British Airways, 2014).
Further, uses of technology for British Airways is also reflected based on the employment of the social networking platform Social@Ogilvy for developing an online chat campaign with the Chinese consumers. The use of the online chat platform contributed in helping British Airways understand the need and expectations of the Chinese consumers and thereby in generation of product and service packages in a customised fashion (Guldin, 2014).
Different types of legal incidents in recent times affected the operations of British Airways. During 2015, around 17 crew members both working and retired focused on generation of a legal action on British Airways owing to the generation of poisoned air that affected the lives of passengers and other cabin crews. The cabin staffs largely complained of falling sick and ill owing to breathing of toxic fumes generated by the oil used for the aircraft engines and also because of the presence of toxic chemicals. The Union body of the airline employees has not only focused on generation of a public inquiry related to the event but has also designed a legal unit for addressing the claims of employees suffered from such contaminated fumes (Reed, 2015).
Another legal issue cropped up during the 2015 period where the staffs and employees of British Airways accused the management of the airline company for spying over their communication conducted over electronic mails and messaging through the use of mobile phones. BA’s management was further accused for generating around GBP 1million to the Union for closing the issue regarding spying over the internal communication. The tracking and spying of internal communication by BA management was identified to be illegal in that it was meant to be targeting the Union members and cabin crews (Cusick, 2015).
British Airways effectively focuses on addressing environmental needs and objectives while conducting its flight operations. The environmental responsibilities are being focused on being addressed by British Airways through the generation of an effective carbon footprint program while also working extensively in the areas of sound and air pollution and also in the meeting of waste management objectives. The company focuses on the incorporation of biofuel for helping in the reduction of carbon emissions while also the use of recyclable materials and also in incorporation of sustainable disposal measures. Different types of technological and engineering measures are also undertaken for helping in the reduction of noise related to flight operations (British Airways, 2013). The carbon emission reduction target for British Airways is reflected in the following illustration.
(British Airways, 2013)
The current reduction relating to carbon emissions during 2014 is reflected as follows.
(British Airways, 2015)
The company also encourages its customers to generate effective donations for helping the airlines company in reducing the level of carbon emissions (British Airways, 2013). The performance of British Airways regarding its Waste Disposal initiatives is reflected as follows.
(British Airways, 2015)
The report effectively reflects on the impacts of political, economic, social, technological, legal and environmental factors on operation of the United Kingdom based airlines company, British Airways. The analysis conducted through the use of PESTLE analysis method rightly reflects on the strategies undertaken by British Airways for countering the impacts generated by the macroeconomic variables.
British Airways, 2013. Climate Chaznge. [Online] Available at: https://responsibleflying.ba.com/environment/climate-change/ [Accessed 6 August 2016].
British Airways, 2013. Mitigating our environmental impact. [Online] Available at: https://responsibleflying.ba.com/environment/ [Accessed 6 August 2016].
British Airways, 2014. British Airways Engineering uses new technology to improve efficiency. [Online] Available at: http://www.britishairways.com/baemro/assets/download/Technology_2014-09-10.pdf [Accessed 6 August 2016].
British Airways, 2015. Environmental Performance. United Kingdom: British Airways.
British Airways, 2016. Company information. [Online] Available at: https://www.britishairways.com/en-gb/information/about-ba/company-information/head-office [Accessed 6 August 2016].
CIC, 2014. Chinese Consumers drawn to British brands. [Online] Available at: http://www.thecreativeindustries.co.uk/uk-creative-overview/news-and-views/news-uk-firms-successfully-target-the-new-chinese-consumer# [Accessed 6 August 2016].
Cusick, J., 2015. British Airways 'spying' scandal: How the world's most famous airline spied on its own staff. [Online] Available at: http://www.independent.co.uk/news/uk/home-news/british-airways-spying-scandal-how-the-worlds-most-famous-airline-spied-on-its-own-staff-10076738.html [Accessed 6 August 2016].
Farrell, S., 2016. International Airlines Group shares plummet as it warns on profits. [Online] Available at: https://www.theguardian.com/business/2016/jun/24/international-airlines-group-warns-on-profits-british-airways-eu-referendum [Accessed 6 August 2016].
Fletcher, N., 2016. British Airways owner IAG falls on outlook worries. [Online] Available at: https://www.theguardian.com/business/marketforceslive/2016/jun/06/british-airways-owner-iag-falls-on-outlook-worries [Accessed 6 August 2016].
Guldin, S., 2014. British Airways launches Chinese New Year WeChat campaign by Social@Ogilvy. [Online] Available at: http://www.ogilvy.com/News/Press-Releases/January-2014-British-Airways-launches-Chinese-New-Year-WeChat-campaign-by-SocialATOgilvy.aspx [Accessed 6 August 2016].
IGADWAH, L., 2016. British Airways Kenya route expansion on despite Brexit vote. [Online] Available at: http://www.businessdailyafrica.com/British-Airways-Kenya-route-expansion-on-despite-Brexit-vote-/1248928-3328060-lemxx2/index.html [Accessed 6 August 2016].
Katz, B.D., 2016. IAG Seeks to Expand British Airways Fleet as Profit Jumps. [Online] Available at: http://www.bloomberg.com/news/articles/2016-02-26/british-airways-owner-iag-s-profit-jumps-68-on-atlantic-gains [Accessed 5 August 2016].
Pfanner, E., 2016. Brexit Knocks British Airways and Foxtons as Confidence Dives. [Online] Available at: http://www.bloomberg.com/news/articles/2016-07-29/brexit-knocks-british-airways-and-foxtons-as-confidence-dives [Accessed 8 August 2016].
Reed, J., 2015. British airlines 'face multiple toxic air claims'. [Online] Available at: http://www.bbc.com/news/business-33008356 [Accessed 6 August 2016].
Smith, M.N., 2016. The owner of British Airways got screwed over by Brexit. [Online] Available at: http://www.businessinsider.in/The-owner-of-British-Airways-got-screwed-over-by-Brexit/articleshow/53448509.cms [Accessed 5 August 2016].