British Airways (BA)

Paper Summary:

This paper explains that, with a dominant position at London's Heathrow, Europe's busiest airport, BA enjoys a powerful franchise; but BA's cost-cutting, downsizing strategy has caused it to lose its leadership position in both the European and global markets. The author points out that the two segments of the market important to BA, transatlantic flights and business travel, have been particularly hit; compounding the problem is that British Airway's most important partner in the One World alliance of carriers, American Airlines, is in deep trouble. The paper states that BA?s response to competition from Ryanair has been poor because, despite projections that the low-cost carriers were expected to grow by thirty percent a year, BA sold its no-frills carrier, Go, in 2001 and put its marketing budget behind winning premium class passengers.

Table of Contents
Changes in the Business Environment
The Operations of BA, Air France and Ryanair
BA Marketing strategies (Segmentation, Targeting and Positioning)
Marketing Mix Comparison: BA, Air France and Ryanair
Change in Critical Success Factors for BA
BA?s Response to Ryanair

From the Paper:

"With triple the costs of Ryanair, BA had relied on premium business travelers and transatlantic flights to absorb its expensive operations. And, it had not encountered meaningful competition from no-frills airlines. Therefore, the real critical factors for BA's success were first-rate service and ample capacity across a large portfolio of destinations. As the market turned south because of a variety of issues such as economic recession, disease and terrorism, BA was ill prepared to readily streamline its operations and change its marketing strategy."

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