British Airways Case Study: Human Resource Management, Essay Example

Analysis of British Airways Ltd

British Airways Ltd is an international airline company founded in 1919 with its headquarters currently at Heathrow Airport in London. Currently, the company has five subsidiaries; OpenSkies, BAMC, British Airways Engineering, BA CityFlyer and British Airways World Cargo. The organization, being the largest airline in the UK, is based on international flights, fleet size and international destinations. The operations of British Airways are governed by British Airline Board which was established in 1971. In 2011 British Airways merged with Iberia (in Spain) to form International Airline Group with its headquarters in London though each individual company retained its brand and operations. Precisely, the British Airways transports approximately 36m passengers to about 97 countries and 268 destinations in one year (Advameg, Inc. (2011).

British Airways is a member of Oneworld alliance (union) which was founded in 1999 which an initial membership of five airline companies; British Airways, Qantas, Cathay Pacific, American Airways and Canadian Airlines. As per 2010, the union consisted of 12 of the world’s largest and best airline (Oneworld 2011). In 2010, the union scooped an award for being the leading World Airline Alliance for 8 consecutive years by Skytrax.

In general, the union is of greater benefit to the airline (British Airways) as it generates more value for airline customers, employees and shareholders which cannot be achieved by an individual airline company. The benefits can be analyzed in two perspectives; benefits to member airlines and benefits to their customers. The benefits accruing to individual airline companies is the reduction of cost of operations through sharing of operational staff, maintenance facilities, sales offices and operational facilities.

In addition, the alliance offers extra benefits in terms of premium to member airline’s customers which are categorized into three levels; Sapphire, Ruby and Emerald. As regards to British Airways, a Sapphire customer receives silver while an Emerald receives a gold premium. Besides, the alliance provides about 550 globally. This enables the top-tier members of frequent flyer programmers, in any of the Oneworld member airline, to access these airport lounges before departure thus increasing departure times. Other benefits to customers include low prices as a result of reduction in operational costs, more destinations and reduced travel times due to optimized transfers. Such benefits act as incentives in attracting more airline customers to purchase its services thus increasing its revenue and profits.

In joining the union, British Airways may encounter obstacles such as restriction to entry in the alliance by antitrust laws. Moreover, the airline company may face restrictions form fully utilizing their benefits from land since being a member of Oneworld makes them not to own landing rights. Landing rights belong to the state where their head quarters dwell.

Additionally, the formation of Oneworld alliance may lead to creating of monopoly which has adverse effects on air passenger’s welfare through increase in the cost of travelling. For instance, the alliance may lead to high prices of air tickets characterized by low frequent flights on a certain air routes due to reduction in the level of competition among airline companies. An increase in prices of British Airline tickets may lead the company to situation which is in contrary with the Consumer Protection Act 1987 of United Kingdom. This law was enacted by parliament so as to protect consumers against unfair pricing practices.

Thus, in dealing with these issues, there is need for the alliance to put in place measures that will ensue that the welfare of the customers is maintained through provision of quality services. In order to bring efficiency in the airline industry, Oneworld union should encourage competition among its members, for example, by rewarding an Airline Company with the highest quality of airline services.

References

Advameg, Inc. (2011). British Airways PLC – Company Profile, Information, Business Description, History, Background Information on British Airways PLC. Retrieved June 27, 2011, from. http://www.referenceforbusiness.com/history2/2/British-Airways-PLC.html

Oneworld (2011). Oneworld Benefits. . Retrieved June 27, 2011, from http://www.oneworld.com/ow/FFP-oneworld-benefits

Oneworld (2011). About Oneworld. Retrieved June 27, 2011, from http://www.oneworld.com/ow/about-oneworld