Swot analysis of British Airways. British Airways is a UK’s flag carrier airline. British Airways came into existence on March 31, 1974, by the merger of two nationalized (British European Airways & British Overseas Airways Corporation) and two regions airlines (Northeast Airlines & Cambrian Airways). The headquarter of the company is in London, England, UK.
International Airlines Group is a parent company of British Airways. The merger agreement between BA Iberia started in April 2010. The process completed in January 2011 and the trade of the new hold company of International Airlines Group started in Madrid and London on January 24, 2011.
According to an estimate, the annual revenue of British Airways in 2020 was 4.8 billion dollars. International Airlines Group (IAG), the parent of BA, said that the company had a loss of 8.5 billion dollars. However, the company has employed roundabout 45,000 employees to manage its worldwide operations.
British Airways’ top competitors are KLM, United Airlines, Virgin Atlantic, Air France, Turkish Airlines, Emirates, Lufthansa, American Airlines, Qantas Airways, Malaysia Airlines, Etihad Airways, Singapore Airlines, Boeing, and Air India.
Today, we’ll discuss the swot analysis of British Airways. It’s going to focus on the internal and external factors impacting the world’s leading airlines. Here’s the swot analysis of British Airways as follows;
Strengths of British Airways
British Airways has made alliances with companies like American Airlines, Iberia, or Finnair over the years. Such partnerships have proven to be successful and they also helped the company to better satisfy the needs and wishes of customers. Resultantly, it improved efficiency and optimized the growth of the company’s business model.
According to an estimate, British Airways offers more than 183 destinations in 70 countries and 6 continents across the globe. Such a vast market size of BA attracts new customers all the time. The company has always added new tourist places to its destination lists. However, the UK remains the major market and London Heathrow airports are flight operators of the company.
BA has established a strong brand name through customer satisfaction, fleet efficiency, and technology. It has helped the company to earn a customer-friendly reputation in the market. However, the customers are willing to trust such a company that has a strong brand name. Its performance has earned many awards and accolades over the years. That’s the BA is the most reliable and consistent brand in the UK.
British Airways has never hesitated to invest and adopt the latest digital technology. Resultantly, it has helped the company to improve the efficiency of various operations across the entire organization ranging from marketing, sales, customer experience, website, mobile application, etc.
IAG, the parent company of BA is investing a lot of resources in AI, machine learning, and data analytics. The objective is to improve the tech capabilities and growth of the company. That’s how the company is exploiting the tech development for its advantage and development.
British Airways cares about the environment and the company is investing a lot of resources and using its influence and network to become a sustainable brand. In fact, the company has taken many steps like reducing fuel consumption to decrease carbon emission and footprint.
BA has set a target to become a zero-carbon Emission Company by 2050. The company has been building relations with clean and renewable energy organizations in order to reach its goals. That’s why the company is launching fuel-efficient new planes in the market.
British Airways has had a limited number of accidents compared to the other airlines. The airline brand always takes extra safety measures to protect its passengers and make the flight safe and secure. In fact, BA has earned a reputation for the world’s top 20 safe flights.
British Airways has won many awards over the years. For instance, World’s Brand Award in 2018, 2017, 2016, 2014, and many others. It shows the consistent and in-depth premium quality of the company’s products and services.
British Airways has sponsored many international events, celebrities, brand, and causes like England Rugby, Tom Kerridge and Speedbird Café, Team GB and Paralympics GB, Dettol, Feast Box, KidZania, Flying Star and Comic Relief, i360, ELEMIS, Union Coffee, The White Company, Bremont, Hattingley Valley, Ozwald boating, Brewdog, Aston Martin, Ambassador Theatre Group, and many others.
Weaknesses of British Airways
Relying on the Local Market
The UK’s market is the main source of Sales and revenue for British Airways. Approximately over 50% of the company’s revenue comes from local Britain’s market. It’s very risky especially under the circumstances of Brexit and Covid-19. Therefore, the company should diversify its business market in order to stabilize its sources of earnings.
The HR department plays a significant role in the resources management of an organization. British Airways is aware of its importance, but the company has had some issues. For instance, when pilots were strikes over some demands and it resulted in the form of a legal dispute in 2019. The HR department should resolve such issues amicably because it impacts the motivation level of employees.
Trent 1000 engines of Rolls Royce have caused many issues in some airlines. Boeing 787 Dreamliner of BA also has the same engine and it created a lot of problems, and the aviation agency has no other choice but to restrict it.
The same engine created flight punctuality issues in BA and the availability of airlines. When the company gets rid of the engine, it decreased the total number of seats and flights.
Opportunities available to British Airways
British Airways has an excellent record of accepting digital technology and it has proven to be successful. Technology is developing and reshaping our lives every day, and it has brought a lot of new opportunities. Therefore, BA should exploit the latest tech trends like machine learning and AI to improve its current technology.
As we have discussed earlier that British Airways must have to expand into the global market in order to stabilize its growth and diversify its earning. Most importantly, when the airline brand would go global, then it would attract a lot of new premium customers. The international market is very large and the company has a long way towards expansion.
Expanding Service Portfolio
British Airways should also consider expanding its service portfolio by offering premium services to quality and status-conscious customers. BA could also enter into the hospitality industry by launching its hotel line, it would help the company to increase its profit and customer database.
Threats British Airways has to face
British Airways has to comply with government and aviation regulations in order to operate its business. If the company doesn’t comply, it would result in the form of heavy fines and lawsuits. The airline brand has to run its business in a very complicated business environment.
The Brexit deal has created an environment of political and economical uncertainty. The new laws and regulations would impact British Airways and present a lot of new challenges in terms of custom laws, immigration regulations, and other air laws. Therefore, the company has to remain active.
The competitive airline brands have divided the air customer market among themselves to a great extent. BA needs to invest a lot of resources in order to stay in the competition. It would require the company to conduct thorough market research in order to get to know the customers and market.
Pandemic of Covid-19
The pandemic of covid-19 has brought a plethora of new challenges to the airline industry. As the shutdown of airlines was a major setback. When they got opened, they have to follow very strict SOPs, limited flights, a limited number of seats, and social distancing. All such protocols have increased the operation cost of the company.
Conclusion: British Airways Swot Analysis
After a careful study of the swot analysis of British Airways, we’ve concluded that British Airways is indeed the world’s leading premium airline brand. The competitors, pandemic, the Brexit deal, faulty engines, and HR issues are some of the main challenges. British Airways should follow the regulations and careful about the tech issues.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.