British Airways Audit Report

1509 Words 7 Pages
An Audit Report of the Business Current Position of British Airways
Introduction
For many years, British Airways (BA) has been commanding heavy presence in the airline industry worldwide. However, this phenomenon has been exhibiting a declining trend; something which many stakeholders are getting attention of. Nevertheless, the BA still have a chance to compete effectively both in Europe and globally. In this regard, this section of this assignment evaluates the current business position of this airline. This evaluation involves analysis of the factors that are affecting the airline from within the organization at micro and macro levels.
Audit of the Current Business Position
A close audit of BA operations shows a number of factors that emanate
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Ideally, these strategies and processes are based on the utilization of resources which BA has amassed over the years to expand its operations. The expansion of this market can be evaluated from the perspective of development of the market, penetration to the new aviation destinations, diversification and development of the product. BA uses any of the resource available to carry its agenda forward.
Diversifying the Products
Due to the increasing competition, BA remains with the option of increasing the span of the products they offer to the market. By increasing the range of the products the company offers to its premium clients, it plans to boost the profitability of the company. These products involve investing on cargo and parcel delivery to any destination. This eases the logistics as cargo can be send separately. BA main business remains to be aviation services. Therefore, BA is looking for means to face lift the existing aviation product services. This is indirect differentiation. Introduction of First Class Cabin is an attempt to woe new customers who want to work, eat and sleep while on transit. The flight is also introducing an entertainment system in some of its Boeing
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Though the company has been maintaining its margins, emerging challenges introduce a threat to the financial position of the business. The increased cases of terrorism have caused BA to invest heavily in security matters. In addition to this, the insurance rates have gone high.
With reference to the year ending 2012, the summary of the financial position of BA is shown in appendices 1 and 2.
From appendices 2, it can be seen that the total revenue of the company increased with 8.4%. Nevertheless, the company recorded a loss after tax. A number of things contributed into this phenomenon.
The cargo revenue reduced by 0.3% and this implies that the organization needs to intensify its marketing strategy to increase all revenue drivers. Fuel consumption cost increased by 14.4% contributing heavily to the increase of costs in 2012. The management needs to seek ways on possible alternatives in reducing this

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