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Today, according to the International Air Transport Association (IATA), the airline industry is going through ‘the worst crisis in history’ (BBC, 2006) British Airways operates within the highly competitive airline market. The UK market for airlines grew by 1.2% since 2003 to reach a value of £8.7 billion in 2004. The number of passengers flying from UK airports alone has increased from 70 million in 2000, to 86 million. The development of a fifth terminal at London Heathrow testifies this growth. However, against this expanding consumer market, the airline industry continues to struggle with the continuous threat of terrorism, high fuel prices and increased competition. The two main sectors of the market are long-haul and short-haul, both of which BA operate
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Each of these sectors has different competitors (see fig 1). One group consists of airlines with regional operations offering scheduled flights and competing on costs. The second group offer long haul flights, with quality environments and services to a range of destinations. Therefore, BA competes on a global, European, national and regional scale.
Within the UK, BA is the largest carrier in the market accounting for 45.1% of passengers in 2004 (Euro monitor) with Virgin Atlantic being the second largest carrier in the market with 9.2% market share. It is also likely that long-haul licenses will be granted to low-cost airlines which will enable them to compete in both strategic groups increasing its influence on BA’s strategy (see appendix 6). In Europe, the UK’s EasyJet and Ryanair were the pioneers of budget airline travel. Their initial business model was based upon offering low fares through outstanding cost management.
Lufthansa’s change in strategy will have direct affect on BA as they continue to attract customers for their high quality standards. Another strategy that seems to be emerging amongst traditional carriers is to reduce fares in order to become more competitive with the low-cost …show more content…
Hooley et al (1998) suggests these wider non-marketing assets include how innovative the organisation is and its organisational climate, the skills of the management team, the financial resources and information systems. A specific review of BAs marketing activities is required and includes analysing the following distinct
Each of these sectors has different competitors (see fig 1). One group consists of airlines with regional operations offering scheduled flights and competing on costs. The second group offer long haul flights, with quality environments and services to a range of destinations. Therefore, BA competes on a global, European, national and regional scale.
Within the UK, BA is the largest carrier in the market accounting for 45.1% of passengers in 2004 (Euro monitor) with Virgin Atlantic being the second largest carrier in the market with 9.2% market share. It is also likely that long-haul licenses will be granted to low-cost airlines which will enable them to compete in both strategic groups increasing its influence on BA’s strategy (see appendix 6). In Europe, the UK’s EasyJet and Ryanair were the pioneers of budget airline travel. Their initial business model was based upon offering low fares through outstanding cost management.
Lufthansa’s change in strategy will have direct affect on BA as they continue to attract customers for their high quality standards. Another strategy that seems to be emerging amongst traditional carriers is to reduce fares in order to become more competitive with the low-cost …show more content…
Hooley et al (1998) suggests these wider non-marketing assets include how innovative the organisation is and its organisational climate, the skills of the management team, the financial resources and information systems. A specific review of BAs marketing activities is required and includes analysing the following distinct