Airline Industry

Airline Industry

  • Submitted By: waheguru
  • Date Submitted: 12/04/2008 3:02 PM
  • Category: Business
  • Words: 364
  • Page: 2
  • Views: 691

BA is world’s second biggest airlines proclaiming the message as “World’s favorite airline”. It is the national airline and flag carrier of UK. Being the largest airline in Europe, it also had to face many challenges in its history. This led BA to implement number of strategies shifting its emphasis from a market-led approach to an asset-led approach. On 1 September 1974 the British Airways Group was formed. It consisted of two companies BOAC and BEA which were then dissolved on 31 March 1974 to form British Airways. The company was privatized in February 1987.

BA had been a leading international airline in 1997. After the entrance of airlines like American airlines, Lufthansa and Air France, BA is facing a tough competition. There had been talks about merging BA with AA as well as Qantas to create a global airline. Douglas McNeill, analyst at Blue Oar Securities, said the AA deal had the biggest cost-saving potential for BA because it already co-operates with Qantas on Heathrow-Australia routes and with Iberia on Heathrow-Madrid services.
The combined businesses would generate revenues of £15.7bn, with BA the bigger earner with turnover of £8.7bn last year. Shares in BA are trading more than 50% below the year-high as a result of concerns over the impact of the economic downturn on its profits. The airline is anticipating making a "small" profit this year, after achieving record pre-tax profits of £883m in the year to March 2008.

As complained by most of the passengers regarding its poor service and high cost BA is no longer their favorite airlines.

Competitive rivalry
business-class fares, which are the industry's most profitable, already vary significantly, and they are about to become even more complicated as competition grows and demand holds up.

British Airways also plans to start a separate small all-business-class airline called OpenSkies in the spring, flying between New York and cities in Europe other than London.
The intensifying...

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