British Airways Essay Example for Free

British Airways Essay Choose cite format: APA MLA Harvard Chicago ASA IEEE AMA In 1987, British Airways was privatised, and over the next decade turned from a loss-making nationalised company into â€Å"The World’s Favourite Airline† – a market-leading and very profitable plc. The strategy that transformed the company into a marketing-led and efficient operation was conceived and implemented by Lord King as Chairman, aided by Sir Colin (subsequently Lord) Marshall: two tough businessmen who confronted staff inefficiencies and so improved service effectiveness that BA was rated international business travellers’ favourite airline for several years in the 1990’s. Lord King having retired, Lord Marshall became Chairman and was succeeded as Chief Executive by Bob Ayling, a long-time BA manager. Ayling set in train a strategy to turn BA into a â€Å"global† airline – transcending the â€Å"flag-carrier† status (the role of a nation’s leading airline) it shared with Air France, Lufthansa, Swissair, Alitalia, Iberia – into an airline with no â€Å"national home† operating throughout the world. The dropping of the overtly â€Å"British† heritage and associations was reflected in a changed brand strategy. Away went aeroplane liveries featuring the Union flag, to be replaced by tailfins bearing themed designs from around the world. This was to address the â€Å"global traveller† a savvy (mainly business) customer whose criteria for purchase were service levels, range of destinations, promptness – not price. But the re-branding became a debacle. Customers, staff, alliance partners, shareholders and retailers (travel agents) all liked the British heritage and imagery and rebelled against the turn to an anonymous, characterless new style. Ayling also focused on cost-reduction programmes which antagonised and demotivated BA’s staff – and customers noticed the deterioration in behaviour of staff whose commitment to customer service suddenly plummeted. The upshot was that Ayling was ousted in a boardroom coup in March 2000. During his reign, a loss of 244m in the year to March 31 2000 – the first since privatisation – was recorded and the group’s market value had fallen  by half. In May 2000, Rod Eddington joined BA as Chief Executive. He was previously Managing Directory of Cathay Pacific and Executive Chairman of Ansett, an Australian airline. Eddington’s immediate actions were designed to restore profitability to BA’s operations – and to restore the Union Flag to BA’s planes! He set about reducing the fleet, moving to smaller aircraft, cutting clearly unprofitable routes. He also targeted â€Å"high-yield† customers, the traditional mainstay segment for BA. Matching supply with demand was the overall concern, to restore positive cash flow. Strategically, BA’s longtime search for a merger partner was resumed. A link with American Airlines, the first choice partner, was out of the question after US regulatory authorities squashed the idea. A proposed merger with KLM, the Dutch flag carrier, was discussed in some depth, but that foundered on doubts over the long-term financial benefits, and arguments over the relative shares each airline would have in the merged company. Meanwhile, the airline industry was undergoing a seismic shift with the rise of low-cost â€Å"no frills† airlines. Ryanair and easyJet had, at first, demonstrated the existence of a new market for cheap airline travel which had not been tapped by traditional airlines. But then they began to expand and to compete for passengers that normally would have gone to BA – even business class customers couldn’t see the reason â€Å"to pay  £100 for breakfast† (the difference in price between BA and easyJet between London and Edinburgh.) BA’s response (under Bob Ayling) was to form GO as a direct response to the no-frills competitor. Operating out of Stansted airport, GO was operated entirely separately from BA, so none of the high-cost culture was inherited. Launched in the face of vociferous opposition from easyJet, GO nevertheless established itself in the market – though at what cost, no-one could guess. Rod Eddington soon decided that his focus on premium customers made GO’s operations inconsistent with that of BA as a whole. GO was sold in May 2001 for  £100m to 3i, a UK venture capital and private equity group. GO was subsequently sold on to easy Jet for 375m. However, the driving of aggressive strategies from budget airlines is still forcing flag-carriers to re-assess their business models. For the year ended March 2001, Eddington’s steps had yielded a quadrupling of operating profits. Market share on key routes had been lost as cuts in fleet and routes bit, but BA believed it had lost customers who paid deeply-discounted fares. BA continued its vigorous pursuit of high-yield passengers. So, all seemed to be going well. The brand was being restored, financial performance was improving and the only real problem was lack of progress on forming a partnership with a US carrier, prevented by the regulators. Then came September 11th, and the airline market fell apart. The consequences were swift – passenger numbers fell 28%, US airports were closed for a week, Swissair, Sabena, US Airlines and nearly, Aer Lingus, went bust. Alitalia lost 570m, Lufthansa 400m. Altogether the industry lost 7bn and shed 120,000 jobs – 13,000 at BA – and passenger numbers are still running at 13% below normal on transatlantic routes. In contrast, passenger numbers and financial results at low-cost carriers – easyJet and Ryanair – were rising impressively. Then came Sars, the Iraq war and the continuing sluggishness of the world economy, all deeply damaging to passenger numbers. Strategy at BA was thrown into disarray. With the travel market is still subject to â€Å"global economic and political uncertainty†, BA has repeated its forecasts for lower revenues. However, the â€Å"fundamentals of this business are stronger than they have been for four or five years† John Rishton, Finance Director, says BA is generating cash, and is conserving that cash. (FT and D.Tel. 6.11.02). The operational imperatives to cope with the turbulent environment are expressed in BA’s â€Å"Future Size and Shape† initiative which is intended to: – Achieve significant cost reductions. Originally targeted at 650m, the cost savings are now expected to save an annualised  £1.1bn over 3 years (FT 19.3.03). Simplified operations and minimal overheads is the aim. – Cut capacity, to match supply of aircraft and flights to the reduced demand. – Cut staffing levels. A further 3,000 job cuts planned for March 2004 have been brought forward to September 2003. – Change BA’s business model. Aware that no-frills competition is not going to go away, but that BA possesses a positive service heritage, BA wants to create an offering that combines the best bits of BA and the no-frills model. Martin George, BA’s director of marketing and commercial development, explains â€Å"our customers like the BA product – convenient airports, high frequency, good level of service – but want it at the right price, and that’s what we’ll give them. It’s about changing our business model to allow us to compete profitably† (Management Today, September 2000). – Rationalise BA’s internal UK and short-haul business – CitiExpress has been formed from the activities of subsidiaries Brymon, BRAL, Manx and BA Regional. To stem heavy losses on this short-haul network, some rationalisation has been done – it has pulled out of Cardiff and Leeds-Bradford airports, and will cut its current fleet from 82 to 50 all-jet planes by end-2005. However, it is expanding operations from Manchester, and from London City airport to Paris and Frankfurt. (FT 18.12.02). It is recognised that BA started to take the bitter medicine of cost cuts and restructuring earlier and in bigger doses than rivals in Europe and North America, and that Rod Eddington has pushed through changes that were long overdue. But is this enough? – can BA wrest back the short haul market from easyJet and Ryanair, while maintaining its position in the longhaul market†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ In July 2003, just at the start of the busy holiday season, BA was hit by an unofficial strike by Heathrow check-in and sales staff who were objecting to a hasty introduction of a swipe-card automatic clocking system. 500 flights were cancelled, affecting 100,000 passengers. The damage to BA’s service reputation was enormous. Both management and union leaders were taken by surprise, and it brought to a head the existence of restrictive practices going back 40 or 50 years which both sides have to confront. Results for the year ending 31st March 2003 showed a pretax profit of 135 on turnover down 7.8% to  £7.69bn, up from a loss of 335 in the year to March 2002. The results included a charge of 84m for the planned ending of Concorde flights in October, and a fourth-quarter loss (January to March) of 200m. These positive results were entirely down to cost reduction. No  dividend was paid – a consequence of the need to conserve cash. Operating margin at 3.8% is way below Eddington’s target of 10%. (D.Tel, 20.5.03, FT, 21.5.03). In the first quarter of the 2003-04 year, a pretax loss of  £45m was incurred – the effect of the Heathrow strike was put at 30-40m. However, Rod Eddington sees the furure business environment as very hard to read, but expects it to get tougher. 2003-04 was meant, according to analysts, to be BA’s year of recovery, but it is not now expected to happen. (DTel, 11.2.03) A critical development is the start of talks between the EU and the USA to dismantle the web of regulations that have controlled the development of international aviation since the mid-1940’s. Eddington, as chairman of the Association of European Airlines, insists that truly global airlines are impossible in the current regulatory environment. â€Å"If it were left to the market, international airlines would undoubtedly follow in the footsteps of other industries and would seek the benefits of scale and scope that are currently denied them. A truly global airline†¦..would be free to operate wherever its customers demanded, free to grow organically or through acquisition and free to charge whatever the market would bear.† These talks are likely to be very long. However, it potentially offers the opportunity for an opening of the two biggest airline markets and lead to substantial consolidation of participants. (FT, 29.9.03). The takeover of KLM, the Dutch flag carrier, by Air France, may be the precursor to the consolidation expected. BA sees no threat from what is now Europe’s largest airline. D.Tel, 1.01.03). British Airways. (2016, Jul 21).

In What, After All, Does Happiness Consist for Aristotle Is He Right Essay

In What, After All, Does Happiness Consist for Aristotle Is He Right - Essay Example In other words, moral virtue, however it is attained, will bring happiness. He divides goods into three classes, A person who loves justice, or virtue will find pleasure in carrying out just or virtuous acts. Thus a virtuous person will find happiness in both himself and in acting upon his own goodness, and then be happy. Aristotle further explains that such happiness needs 'external goods' because a person must be equipped with certain other ingredients to perform noble acts. He cites friends, political power and wealth, which can be used to achieve this happiness, and includes certain aspects which might be described as living a 'charmed life' in modern terms. Having noble birth, beauty, good children and so on, all help to enable a person to live well, (think virtuous thoughts, do good acts) and so make a person happy. The inference then is that if someone is ugly, childless, poor or lonely, they have little chance of happiness. be in. However, he does believe that to study and become of good character is the preferred method, leading to noble acts, complete virtue and a complete life. Aristotle acknowledges that changes encountered throughout life might overturn the happiness but concludes that the virtuous activities of man are the most long lasting and permanent, for by thinking virtuously and acting so, he is truly good, and by inference, and in fact, happy. Such a person, described in Chapter 10, will be able to take what life throws at him, handle it because of his 'nobility and greatness of soul' (Bk. 1 Chp. 10, 350BC), always be happy, even in the afterlife. In Chapter 11 he says 'the blessed dead will not be affected by good or bad fortunes of those left behind, their happy state is preserved' (Bk. 1 Chp 11, 350BC). (He considered that what happens to the living impinges on the dead). The hypothesis here would seem to be that thinking good thoughts, doing noble and virtuous acts, staying happy, secure in the knowledge that one is thinking well and living well, makes for happiness, in this life and the next. The soul, being the rational aspect of a human being, will ensure obedience and the production of such virtue will result. His non-evolutionary concept of the universe, (nature is as it is) and how man exists within it, made his ethics fit well with the teachings of the Catholic Church and later, with Christianity as a whole. Serious challenges only arose with the Enlightenment of the 18th Century and the ideas preceding it during the 17th. From Galileo to Darwin, and many others, overturned his views, suffering at the hands of religious leaders in the process. Now, in the 21st Century, surrounded by the knowledge of man's physical, psychological and scientific

Economic Essay Example | Topics and Well Written Essays - 1500 words - 4

Economic - Essay Example (Travel classes, 2009) It is important to understand the concepts of one-price policy and variable-price policy. One-price policy is when the same price is fixed for the product by the seller, irrespective of who the consumer is. Variable-price policy is one whereby, seller sells the same product at varying prices to different customers. Large-scale manufacturers and big retailer usually follow one-price policy. On the other hand, small-scale manufacturers and small retailers follow variable-price policy. Variable-price policy is said to be prejudicial about the credibility and prestige of the customers. (R. D. Agarwal, p. 410, 1983) The concept of contribution pricing is relevant here. Contribution pricing is the setting of prices based on the principle that as long as an item is sold for more than the variable cost, it is making a contribution towards the overheads of the business. This notion may lead a firm towards one of two approaches to pricing; price discrimination and loss leaders. In case of Eurostar, price discrimination is relevant. Price discrimination occurs when different prices are charged to different people for what is essentially the same product. This is done in order to maximize revenue by charging more to those that can afford, and are willing to pay more. Price discrimination is a response to the recognition that different types of people may have different price elasticities of demand for a product. For instance, people under 16 years of age get high-price entrance to cinemas and football grounds in many parts of the world. This is because the owners know that higher prices will cut their demand substantially. In this case, as in all considerations of price discrimination, it is essential that there should be the minimum of crossover between market segments. In other words, if many adults could get in for half-price, the point of the discrimination would be lost. It is important to remember that price discrimination is when a firm sells the 'same product or service' at varying process to different customers. This also applies to off-peak and on-peak telephone calls or train fares. Perfect price discrimination occurs when all the consumers are charged a different price, whereby the entire consumer surplus has been taken over by the business. For an understanding of the concept of consumer surplus, it is important to understand that a consumer good will be valued more highly by some consumers than by others. Yet they all pay the same price for it when uniform pricing policy is being applied. Some consumers would be willing to pay a price higher than the actual market price. The term consumer surplus refers to the value of the extra satisfaction which these customers get from the item, over and above what they have had to pay for it. The consumer surplus is shown on a supply and demand diagram by the triangle enclosed by the demand curve and the price line. The demand curve shows how consumers value the product and all those who are prepared to pay at a higher price get some extra satisfaction. Source: Tutor2u For price discriminatory pricing, it is important that there be barriers for prevention of