You probably are already familiar with this brand of an airline. It’s the most commonly addressed entity from the UK after fish and chips. British Airways is the flag carrier airline in the UK. The term ‘flag carrier’ is used for an airline that has been granted preferential rights by the government for international operations. No wonder it’s so notorious!
British Airways was founded in 1974 as a merger of four companies. It is currently owned by the International Airlines Group (IAG). The airline’s headquarters is located in London, its central hub is at Heathrow Airport, and the airline hosts a fleet size of 254. The fleet size and the number of passengers that it carries make BA the second-largest UK-based carrier. BA caters to more than 160 destinations, both domestic and international (which lie across 70 countries).
British Airways used to be a state company until it was privatized in 1987 by the then Conservative government. The airline has many achievements under its belt, such as being a founding member of a vast alliance; Oneworld airline alliance. It also became the first passenger airline in 2018 that had managed to generate $1 Billion from a single air route in a period of one year.
The airline regards itself in very high esteem by categorizing itself as “The World’s Favorite Airline.” Even though the airline dropped this slogan back in 2001, many other related ones have been frequently used by the company. These include “We’ll Take More Care of you,” “The World’s Best Airline,” and “ Fly The Flag.” Such claims can only be thoroughly evaluated once we look at the British Airways SWOT Analysis below.
The recent years, however, have been a little tough on the airlines. Even though it did see profitable growth in 2019, Brexit and COVID-19 left significant impacts on the BA. The BA did manage to deal more effectively with these challenges, relative to other airlines in the UK so kudos to them. The ongoing year might prove pivotal in determining a further course of action for the airline.
What are some of the strengths of British Airlines?
The number of safety incidents and accidents has fortunately been very low for the airline. There have been three hull-loss incidents, two hijacking attempts, and only one fatal accident ever since the airline’s inception in 1974.
Thus, British Airways is highly reputed for safety and has consistently been ranked within the top 20 safest airlines worldwide. This standing adds to the competitive advantage of British Airways.
British Airways has been putting a lot of strategic focus on becoming a sustainable brand. They have been putting money into important focus areas such as expanding their international network and improving technology and the overall experience for both customers and employees.
This approach towards sustainability extends to environmental sustainability as well. The company has tried to reduce its carbon footprint by investing in fuel-efficiency. They seek to prevent wastefulness and to maximize mindful consumption of fuel.
British Airways plans to go zero carbon by 2050. They have partnered up with some renewable fuel companies to devise a system for the conversion of household waste into sustainable fuel for planes. The company has also undertaken many other efforts, such as working closely with the government to reduce carbon waste.
The airline is adding more planes that are fuel-efficient and letting go of less efficient models.
The company has picked up its pace by investing in the digitization of all operational areas. British Airways has managed to grow its operational efficiency because of the focus it had placed on technological advancement. These investments have paid off, and results have already started being evident across all departments like sales, marketing, customer experience, etc. They have improved their website as well as the app.
The airline does not plan to stop here. They have many plans in the works to improve their growth rate and technological capabilities even further. It is safe to say that British Airways has tried to utilize the technological benefit to its maximum, and their investments have proven to be highly profitable for their company.
British Airways has established a highly positive brand image in the UK market by emphasizing on focus areas such as technology, fleet efficiency and customer experience. Not only do they enjoy a strong position in the market, but they have also built a customer-friendly brand image.
Customers place more trust in the airlines with stronger images, so this gives BA a competitive edge over its rivals in the market. British Airways is considered one of the most reliable brands in the UK. Its consistent good performance has helped it bag many awards and accolades.
Apart from its place in the local market, British Airways flies many planes on international routes as well. The company’s core sales go to the UK market, but it covers more than 70 other countries. They are also launching new courses constantly. They are also trying to optimize their flight network to offer more flights to popular tourist destinations.
British Airways is the most extensive flight operator at two airports: London and Heathrow.
The company has developed many partnerships that prove beneficial for its operations. It has formed partnerships with Finnair, American Airlines, and Iberia to improve customer satisfaction. These associations have enhanced the growth, optimization, and efficiency of the company’s business model.
What are some of the weaknesses of British Airlines?
Rolls Royce Engine
The Rolls Royce Trent 1000 engine has generated many problems for the airline. It is used in the Boeing 787 Dreamliner and has now been limited by the aviation agency after it caused significant hindrances for the British Airways.
The engine has decreased both the punctuality of British Airways flights and the aircraft availability. Many aircraft had to be let go of, and the airline had to reduce the number of flights and seats.
Issues with HR
Human resource is perhaps the most vital resource any organization has at its disposal. British Airways realizes the importance of having an HR department but they have faced some issues over the years.
A recent example comes to mind from 2019 when the airline pilots went on a strike that led to a legal dispute. Such incidents affect worker motivation as well as the image that the airline has established for itself.
Revenue Heavily Dependent on Local Market
British Airways relies primarily on sales in the UK market for its revenue generation, which can be an unstable form of money as COVID-19 and Brexit have impacted these sales. Currently, almost 50% of the company’s revenue comes from the domestic markets, and hence, it needs to start schemes to increase sales in foreign markets.
What are some excellent opportunities for British Airlines?
Expansion of Services
There are many services that the company can expand to for increased revenue growth. They can start adding premium services that will attract high-end customers as well as businesses towards the airline.
Airlines also use the tactic of starting hospitality services like hotels which also help the revenue grow. British Airways can take notes on increasing their product line to reap more benefits. Taking up opportunities like this will add to the company’s revenue as well as improve the customer base.
Expansion into International Markets
As discussed previously, it is a dire need of the time that the airline penetrates into foreign markets. Expanding into international markets will help stabilize the revenue sources of the airline and will increase customers too.
If an airline has a significantly spread out international route system, this can serve as an attraction point for new and old consumers alike. The global market has multiple places that the airline can still get into if it keeps working on expansion.
The company has already shown excellent results that it has managed to achieve through the digitization of many of its services. However, technology is a fast-growing field that has new developments every day. This means that there is an endless array of new opportunities that the company can use to its benefit.
They can also explore and utilize the artificial intelligence and machine learning technologies that their parent company has been working on.
What are some threats faced by the British Airlines?
The COVID-19 Pandemic
Flights, especially international ones, were one of the first things to shut down when coronavirus hit. This has taken a massive hit on the revenues of all airlines, including British Airways. Not only has the travel reduced, but airlines now have to comply with a wide range of Standard Operating Procedures (SOPs), with regards to COVID-19, to keep their operations running. People will travel only by airlines they feel are safe enough. Regulatory authorities can also shut your company down if they find disregard for the SOPs.
Many people have been avoiding international, and even local, travel altogether. Events that required your presence are now conducted through online avenues, the increased usage of which has shortened distances even further. The real question is, will people continue to travel for all the reasons they used to, even after COVID ends? Or will they weigh the fact that so much can be done just through an online platform like Zoom. Moreover, when will coronavirus actually go away, that remains a bold question mark.
Competition in the Market
The increase in the competition has taken market share away from the airline and distributed it amongst other suppliers. Companies constantly need to fight off competition, requiring time, effort, and constant spending of money. This fight against competition also requires many business tactics for which you need to have a deep knowledge of your market and consumer base.
Brexit caused a lot of economic uncertainty that has had significant impacts on British Airways. Not only that, but the new set of laws also affect the working of the airlines. The event has put many challenges in place for British Airways, which they need to work actively against. The custom laws and immigration laws are going to have considerable impacts on how the airline operates.
British Airways faces a high level of regulation from both the aviation authority and the government. There are many things that the airline needs to comply with, and in case they don’t, they risk hefty sums of fines being imposed on them. This intricate web of complex regulations puts a lot of pressure on the airline and also affects how it works by putting several constraints.
British Airways SWOT Analysis: Conclusion
British Airways is undoubtedly one of the most prominent names in the UK. BA holds many opportunities in its belt. Though they face considerable threats right now, they still can start using their advantages to their benefit to easily overcome these threats. As this SWOT Analysis shows, the airline has a name like no other and it is hard for any other airline to take its place. Hence, they do not have a lot to worry about because they can easily change their course in tricky waters.
A SWOT Analysis is an administrative and managerial tool used to analyze different internal and external forces which affect a company. It helps in understanding any organization at a deeper level and determines what further route to take with it. A SWOT Analysis also helps in devising strategies for the future of your organization. Going through other SWOT Analyses can improve your insight into the business world, so look at the other SWOT examples we have. And in case you are confused about how to go about one, we also offer a detailed guide that you can take a look at.