Impact of Policies on Travel, Competition or Aviation on British Airways

The provided content discusses the impact of various laws and policies on British Airways (BA). The airline industry is governed by multiple regulations, including aviation safety policy, noise pollution policy, and sustainable policy. BA must comply with these regulations to ensure safe and efficient operations. Additionally, the company faces challenges in managing customer expectations, employee representation, and adapting to changing business models. To overcome these challenges, BA needs to adopt a strategic approach to management, focusing on financial performance, customer service, and employee development.

Business Environment

Table of Contents
INTRODUCTION ...............................................................................................................................4
TASK 1.................................................................................................................................................4
AC 1.1 Purposes of different types of organisations and BA's mission and vision.........................4
AC 1.2 Key stakeholders of BA and their objectives.....................................................................5
AC 1.3 Responsibilities of an organisation and response of BA towards these responsibilities....5
AC 2.1Eonomic systems that attempt to allocate resources effectively .........................................6
AC 2.2 Challenges due to fiscal and monetary policies on business environment faced by BA...6
AC 2.3 Impact of regulatory, competition policies and legal changes by BA................................7
TASK 2.................................................................................................................................................7
AC 3.1 Impact on pricing and demand for airline seats due to market structure............................7
AC 3.2 Interplay of different players and market forces shape organisational responses..............8
LO 3.3 Impact of working practices and cultures of the countries on BA......................................8
AC 4.1 Impact of global changes in trade regime caused by organisations on BA.........................8
AC 4.2 Impact of other global factors, including policies/regulations of government on BA.......9
AC 4.3 Impact of policies on travel, competition or aviation on British Airways.........................9
CONCLUSION..................................................................................................................................10
References...........................................................................................................................................11

INTRODUCTION
Business Environment affects the working and operation's of business in many way. There
are various factors that affects the environment of enterprise such as business policies, customers,
suppliers, changes in market, laws, policies, rules and regulations, etc. Some of these factors are
controllable like internal factors but some are not such as external factors.
British Airways (BA) is taken in this research for explaining various purpose of organisations,
nature of country's environment where enterprise runs, behaviour of organisations towards market
environment. With these topics, it also contain information related to the impacts of global factors
on business environment and how they help companies in shaping their activities. In the final satge,
the whole research is concluded in the form of summary.
TASK 1
AC 1.1 Purposes of different types of organisations and BA's mission and vision
Every organisation has their own purpose for starting any kind of business. Various types of
organisations are explained below with their purposes.
 Sole Trader: It is also called as sole proprietorship or only proprietorship. The owner of this
type of companies are single. Example are Kurt Geiger, Marks and Spencer, etc
 Partnerships: The organisation in which partners (two or more than two persons) operates
and manage it is called as partnership. Example are: Twitter, Apple Inc, etc (Siewiorek,
Saarinen, Lainema and Lehtinen, 2012).
 Franchising: It is a method in which many different owners shares common business brand
or model name through a licensing relationship. Example are: Kare Plus, tutor doctor, bata
shoes, etc (Franchise Direct. 2015).
British Airways (BA) is a flag carrier airline along with largest airline as per the fleet size in
UK. BA has its mission, vision and objectives which are as follow.
 Mission: The mission statment of BA is to become exclusive and first choice airline for
passengers. Along with this, to make travellers to feel confident while flying.
 Vision: The vision of BA is to provide innovative and prime services to the travellers which
make them to select BA as their first choice (Identify heralds a new vision at British
Airways. 1997).
 Objectives: Short term objectives are to maintain trust and loyalty with its regular
passengers and maintaining good relations with them by offering services of their choice.

Long term objective is to set new market standard in services and delivering best economic
performance (Haigh and Brubaker, 2010).
AC 1.2 Key stakeholders of BA and their objectives
The key stakeholders of BA are explained below.
 Customer: Customer prefer those companies which provide them quality services in low or
fare prices. BA provide its services in more than 70 countries, so to satisfy passenger of each
country is a difficult task. BA face challenges in fulfilling demands of travellers as per their
social and cultural background (Alcidi and Gros, 2011).
 Government: Government plays important role in industries. As they monitor market
position of them along with their growth or decline. With the continuous changes in the
policies and laws, BA has to changes its strategies to follow them which impacts its
working, time and money (Galbreath, 2009).
 Supplier: Supplier supplies quality products and goods to the industries. It is necessary to
build strong relations with them. To provide quality services to the passengers and to
maintaining flights properly BA tries to maintain good and loyal relations with its suppliers
which results to optimization of purchase process (Fernando, 2011).
 Employees: Employees are the part of any organisation due to whom it runs effectively.
Sometimes, it becomes hard for BA to fulfil each and every demand of workers which
results to conflicts and disputes (Gottheil, 2013).
AC 1.3 Responsibilities of an organisation and response of BA towards these responsibilities
It is prime responsibility of organisations to fulfil responsibilities of their stakeholders. To
satisfy customers, BA is providing them high class facilities. It is offering facility of sleeper seats
which makes journey comfortable. It offers a service Sky-flyer Solo for the children travelling
alone. Responsibilities towards employees are to offer them high packages, job satisfaction, friendly
environment, etc. BA provides training programmes to its workers in four fields which are
employee services, resourcing, payroll and reporting. These activities helps in enhancing skills and
abilities of workers (British Airways Career. 2012). It offer bonus schemes, income protection
schemes and life insurance to employees. Along with it, BA provides flexible working, cargo
concession, hotline tickets for travelling, etc. Government forms or modify various policies and
laws time to time which are essential to follow otherwise it results to punishment or fines. BA
works according to the aviation laws ans policies (Ghannadian, 2006). It is working towards clean
environment, less noise and air pollution. BA is the first airline who is participating in carbon
trading. The climate action plans of BA consists of formation of less carbon fuels, saving in

emissions, etc. It has new aircrafts like the Airbus A380 and Boeing 787 emits 16% less CO2 per
seat as compare to the old ones (Climate Change. 2013).
AC 2.1Eonomic systems that attempt to allocate resources effectively
Economic system helps in meeting the needs and wants of individuals by producing goods
and services. The production of goods and services is affected by various factors such as labour,
resources, capital, etc. There are various types of economic systems such as free market, command
(planned), mixed, etc. These economies helps in taking decisions related to the type of products,
methods used for their production, etc which leads to proper and effective allocation of resources.
Government generally adopts mixed economy for taking decisions related to the production and
consumption of resources (Manning, 2013) . For taking decisions regarding the quality services for
travellers, BA use mixed economic system by adding market features with socialist characteristics.
Mixed economy reduces social cost of BA by cost benefit analysis. This results to optimum
utilization of resources which reduces the chances of redundancy. This also helps in reducing
operational cost of BA (Taylor‐Gooby, 2012) . It studies the market along with the perception and
demands of people and offer services accordingly. The enterprise allocate resources appropriately
which results to better financial condition. Environmental regulations, labour regulations and
property laws effects the allocation process of resources of BA. By combining benefits and
restrictions, BA provides quality services to clients (Papatheodorou, 2012).
AC 2.2 Challenges due to fiscal and monetary policies on business environment faced by BA
The fiscal and monetary policies decided by government impacts the business enviornment
of BA. These policies are explained below with challenges faced by BA.
Fiscal Policy:
Through this policy, Government monitor and influence country's economy by adjusting
expenditure and revenue collection. The main elements of fiscal policy are government taxation and
spending. It leads to reduction in unemployment, increase in economic growth, etc but creates
inflexibility. Increase and decrease in spendings and taxes creates challenges for BA. It faces
challenges in area of fuel prices, health and safety, financial, etc. Decrease in taxes results to
increase in number of travellers which leads to increase financial status of BA. Decrease in
spendings impacts badly on BA as it decrease demand of it (Jarvis, 2014).
Monetary Policy:
To maintain the price stability with high economic growth monetary authority of nation I.e.
central bank controls money supply and interest rates. Interest rates are inversely proportionally to
money supply. Monetary policy results to low inflation which helps BA in taking effective and best

financial decisions. Increase in interest rates leads to decrease in money supply for BA and vice
versa. Increase in interest rate affects the working of BA negatively. This policy increase
unemployment which impacts on the hiring process of BA (Katie, 2013) .
AC 2.3 Impact of regulatory, competition policies and legal changes by BA
As a Public limited company(plc), BA affects by regulatory, competition policies and legal
changes bin airline industry. As per the competition policy of UK, Liberalisation and deregulations
in airline industry invites new firms which increase competition for BA. Before deregulation in
airline industry, there was control over the routes and ticket prices of airlines (The European
Aviation Safety Policy. 2015). As per the deregulation, service quality of BA is measured by various
factors such as seating comfort, appearance of cabin crew, departure time of flights, etc By the helps
of deregulation, BA is now able to fly any domestic route which enhance its business.
BA follows aviation policies which includes policies related to the noise pollution, less
energy consumption, air navigation, clean environment, etc. These policies leads to increase in
operational cost of BA which impacts on financial condition of it. It also follow all aviation laws
such as external aviation relations, competition rules, etc for working legally. It follow laws related
to the health and safety of passengers by providing healthy food and safety measures to them. Air
Navigation and Transport Act is based on aviation regulation, BA follow this act by flying flights to
those routes only where UK government permits it. This restricts BA to serve its services in those
countries which are not permitted by government (Jones and Vagliasindi2013) .
TASK 2
AC 3.1 Impact on pricing and demand for airline seats due to market structure
Oligopoly is the market structure which followed in airline industry. As per this market
structure, there are less number of companies and competition takes place among these companies
only. BA is one of the leading airline in UK (Lange and et. al., 2015). It has strong competition with
Virgin Atlantic, Easy Jet, Deutsch Lufthansa, United Airlines,etc. Due to oligopoly, if one airline
tries something new to attract more passengers then its competitors will also follow the same
strategy to keep themselves in competition and market as well. The demands and price of seats
depends upon various factors such as types of passengers, competition, seasonality, peak period and
fuel costs. The type of market is divided between two types of passengers time oriented and price
oriented. Time oriented travels on the exact day and time when they have to travel which does not
effects on the demand of seats but price oriented ignores to travel in the time of high price which
leads to decrease in demands of flights. In seasonality, BA charges high prices due to the high
demands. Along with these factors, fuel prices also impacts on the demand and price of seats. With

increase in fuel price, fare of tickets also increases which results to decrease in demand of flights
(Lin, 2012).
AC 3.2 Interplay of different players and market forces shape organisational responses
The interplay of different players and market forces effects the working and operations of
BA. These forces helps in deciding strategies better than competitors. The various market forces are
as follows.
 Demand and Supply: Demand and Supply are directly proportional to each other. With
increase in demand supply will also increase and vice versa. At the time of seasonality,
demand of flights increases which results to more supply of services. Any kind of dispute or
conflict results to decrease in supply of services which decrease the number of passengers.
BA is running more flights to short haul routes due to its more demand in UK (Haigh and
Brubaker, 2010).
 Elasticity of Demand (PED): According to this, with the change in prices demand of goods
or services also changes. With the increase in ticket price of BA flights, its demand will
decrease. With increase in ticket price of BA passengers will like to choose other flights
which increase competition for BA (Halbert and Ingulli, 2014).
 Elasticity of Supply (PES): According to this, with the change in prices, supply of goods or
services will also change. With the increase in number of passengers BA has to supply more
services to the passengers. Low price of flights results to more travellers which increase the
supply of services (Lange and et. al., 2015).
LO 3.3 Impact of working practices and cultures of the countries on BA
BA is providing its services to more than 70 countries. Each country has its own culture and
social life which impacts on the working structure of BA. It needs to design strategies according to
the working practices and culture of the particular countries (Heinz and Pitfield, 2011). Country's
food type, taste, working time, dressing style, languages, social life, cultures, etc are different from
other countries. To achieve growth and enhance business BA needs to manage all these factors
effectively. Before starting airline to any country, it firstly conduct proper research to understand
working practices and culture of that country. For example, some countries does not allow western
dresses at that place BA follows the dressing style of that particular country. For providing services
in the countries such as France, Germany, Span, etc. BA needs to hire more staff members who
knows the languages of these countries. The timing of some countries are differ from timing of UK
which makes the management complex. The timing of China is different for enhancing its business
in China, BA have to work according to china's timing. Due to various terrorism attacks BA have to

take government interventions before flying there (Hamilton and Webster, 2015).
AC 4.1 Impact of global changes in trade regime caused by organisations on BA
Changes in the global trade regime caused by organisations such as World Trade
Organisation(WTO), other international civil aviations and tourism bodies impacts in both positive
and negative manner on BA. The international trade helps a lot in enhancing and growing business
of BA. By exporting and importing, it provide all facilitates to the passengers. Changes in policies
and laws results to change in working procedures of BA (Gottheil, 2013).
As per the sustainable aviation policy, airlines have to contribute government in preventing
environment from air pollution. For this, company needs to replace their flights, modify their
engines and machines which emits less CO2. Along with this, it has to focus on less energy
consumption, less noise pollution, etc. As per the traffic distribution rule, BA cannot operate its
plane cargo services at Heathrow or Gatwick at the time over-crowding. All safety and security
measures are followed by BA for the safety of passengers (Galbreath, 2009). It takes care of health
of passengers by providing them high quality of food. Passengers along with the airlines are
checked properly to prevent from any kind of incident such as hacking or bombing. The open sky
policy between US and UK have provided BA new opportunities. As per this policy, BA can fly to
any point of US (Haigh and Brubaker, 2010).
AC 4.2 Impact of other global factors, including policies/regulations of government on BA
Global factors including policies and regulations of government affects BA in political,
economic, social, technological, legal, etc manner. By using effective technologies BA can manage
and maintain its work properly. These techniques helps in scanning of luggage, checking of
passengers, storing information securely, online booking of tickets, etc. These technologies makes
operations easy and simple with fast execution which improves efficiency of BA (Halbert and
Ingulli, 2014). As it is providing services in various countries which leads to social diversity.
To satisfy of passengers BA offer services according to the social life and environment of
that country. With these, it is also participating in making environment clean and pollution free. It is
investing on the flights for less emission of CO2. Various demands of labours impacts on the
working of BA which on unfulfillment leads to disputes and conflicts. Changing laws and policies
also affects BA functioning. It is important to work according to various laws of aviation related to
the safety of flights, passengers, delay of flights, etc otherwise it leads to punishment. Sustainable
Policy, aviation policy, air navigation policy, noise pollution policy, etc are necessary to be followed
by BA (Heinz and Pitfield, 2011).

AC 4.3 Impact of policies on travel, competition or aviation on British Airways
European Union (EU) policies on travel, competition or aviation are for the welfare of
airline industry, passengers, surroundings and nation. European aviation safety policy is for
securing airlines from any type of accident. The rules related to this policy are cost effective and
facilitates the free movement of products and persons (Airline Competition. 2015). A s per the
policy of EU, passengers can refund their tickets on the delay or cancellation of flights. They can
also use alternative transport for travelling to their destination.
Passengers required to carry liquid products such as toothpaste, gels, cream, drinks, etc in
transparent plastic bags. The sharp things are not allowed in the airlines because traveller can use
them as weapon. Proper checking of baggage and its weight should be according to the rules. These
all processes are for the safety and security of flights and passengers travelling in them. Under the
open sky policy, BA allows passengers to travel with their pets and offer non stop services. As per
this policy, BA is free to fly its flights to any destination of US which enhance its business and
opportunities (Compensation for overbooked, cancelled and delayed flights in the EU. 2015).
CONCLUSION
As per the above research it is concluded that, Business environment plays very crucial role
in the growth and success of any business. British Airways is top leader of airline industry in UK
which is providing high class facilities to the passengers by using eco- friendly and limited natural
resources. Changes in laws, policies, economic system, market structures, rules and regulations
impacts on the working of BA. Conflicts and disputes results to the ineffective performance but BA
manages it effectively. Each time it thinks something new and innovative which makes it different
from its competitors like Virgin Atlantic.

REFERENCES
Books and Journals
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Galbreath, J., 2009. Building corporate social responsibility into strategy. European Business
Review. 21(2). pp.109–127.
Ghannadian, F. F., 2006. Fiscal policy and political limitations in the European Union. International
Journal of Commerce and Management. 16(1). pp.41–50.
Gottheil, F., 2013. Principles of economics. Cenage learning publication.
Haigh, M. M. and Brubaker, P., 2010. Examining how image restoration strategy impacts
perceptions of corporate social responsibility, organization-public relationships, and source
credibility. Corporate Communications: An International Journal. 15(4). pp.453–468.
Halbert, T. and Ingulli, E., 2014. Law and Ethics in the Business Environment. 8th Ed. Cengage
Learning.
Hamilton, L. and Webster, P., 2015. The International Business Environment. Oxford University
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Heinz, S. F. and Pitfield, D. E., 2011. British airways’ move to Terminal 5 at London Heathrow
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Jarvis, P., 2014. British Airways. Amberley Publishing Limited.
Jones, B. J. and Vagliasindi, M., 2013. Power Market Structure: Revisiting Policy Options. World
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Katie, J., 2013. Strategic Management: British Airways. GRIN Verlag.
Lange, K. and et. al., 2015. Changing Business Models and Employee Representation in the Airline
Industry: A Comparison of British Airways and Deutsche Lufthansa. British Journal of
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Lin, W. C., 2012. Financial performance and customer service: An examination using activity-based
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Manning, L., 2013. Corporate and consumer social responsibility in the food supply chain. British
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Papatheodorou, A., 2012. Aviation and Tourism: Implications for Leisure Travel. Ashgate
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Siewiorek, A., Saarinen, E., Lainema, T. and Lehtinen, E., 2012. Learning leadership skills in a
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