Export Pricing Behavior and Research Suggestions in the Field


Added on  2019-09-26

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CONTESTI.IntroductionII.Assessment of the companyIII.Critical evaluationIV.Relate from journal articleV.ConclusionVI.References1 | Page
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IntroductionIn this essay we are required to analyse main issues about a company of our choice,by researching information useful that mention the company problems. Consequentlywe are required to apply relevant theories and modules to evaluate the problem andto conclude by using articles from an academic journal were we will be able toidentify the issue and improve the performance of the chosen company. Researching on companies who are having difficulties it was found very interestingwhat British Airways (BA) is going through; and even though is having dramatic lossBA it is still able to save some money.British Airways is the flag mover airline of the United Kingdom. It is the largest airlinein the UK, international flights and international destinations. British Airways wasconsidered the largest UK airline by passenger, from its creation in 1974 until 2008,when it was displaced by low-cost competitor EasyJet. Since its beginning, BritishAirways has been centred at its main nucleus at London Heathrow Airport, with asecond major centre at London Gatwick Airport. It has also assumed exclusiveoperation of international flights to North America and Southeast Asia fromcontending British Caledonian. The creation of Virgin Atlantic Airways in 1984 begana tense challenge, which led to "one of the most bitter and protracted libel actions inaviation history". BA faced with increased competition and higher costs in the mid-1990s. In the early 2000s, CEO Rod Eddington implemented added cost cuts. BritishAirways faced a price-fixing scandal that moved its primary centre to HeathrowTerminal 5, and experienced threats of industrial action, leading to a strike in March2010. On 8 April 2010, it was confirmed that British Airways and Iberia Airlines hadagreed to unification, forming the International Airlines Group, although BA wouldcontinue to operate under its current brand. The combined airline will become theworld's third-largest carrier (after Delta Air Lines and American Airlines) in terms ofannual revenue.Assessment of British AirwaysIn the beginning of August 2008, American Airlines announced an alliance with BAand Iberia, allowing the two carriers to fix fares, routes, and schedules together. Inaddition to blend talks with Iberia, it was announced on 2 December 2008 that BritishAirways was discussing unification with Qantas. If British Airways, Iberia and Qantaswere to combine as one company it would be the largest airline in the world.However, on 18 December 2008, the talks with Qantas ended due to issues overownership. The union between them is believed to be worth approximately £5 billion;the new group has over 400 aircraft and flies to over 200 destinations across theworld. As part of the deal, British Airways shareholders took a 55% stake in thecompany, headquartered in London, with the remainder owned by Iberia.Willie Walsh, CEO of British Airways and Iberia announced their unification in April2010, creating the International Airlines Group, in June 2009, British Airways2 | Page
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contacted some 30,000 employees in the United Kingdom, including Walsh, askingthem to work without pay over a period of between one week and one month to savemoney. On 6 November 2009 the worst ever half-year loss in British Airways' historywas reported to the public, where a High Court decision sided with BA torestructuring plans, including a reduction in cabin crew, and the 14 December 2009cabin crew at British Airways voted in favour of strike action over the Christmasperiod over job cuts and contract changes. On 17 December the ballot was ruledinvalid by the High Court due to voting irregularities; the strike did not take place.Consequently Unite announced further strike action, and over there more than 80planes were grounded at Heathrow Airport on the first day.Across April and May 2010, much of Western and Northern Europe had their territoryclosed due to huge density residue clouds from the erupting volcano in Iceland. Itwas feared that aircraft could be damaged or could even crash due to engineingestion of volcanic residue. This affected all airlines operating within Britishairspace, leading to strong objections from companies such as Ryanair. Flightsprogressively restarted as the ash levels declined.British Airways has reported its biggest annual loss due to lower passengernumbers, higher costs and the impact of strike action. They lost £531m in the 12months to March, and it is BA's biggest loss since it was privatised in 1987; that addsto the £401m it lost in the 2008-9 financial year, but as it was less than expected, BAshares rose.Revenues at the airline were down £1bn on last year, BA said, though it managed tocut costs by nearly £990m - a £600m saving coming from lower fuel costs over theyear. BA's chief executive Willie Walsh said that despite the huge losses, thecompany's efforts to cut costs were a cause for optimism. It is estimated that strikesby cabin crew in March cost BA £43m. Further strikes are likely to hit the airline'sfinances even further. The disruption caused by volcanic residue from Iceland is alsolikely to have added to BA's losses. Douglas McNeill, transport expert at CharlesStanley, said the ash-related disruption could cost BA an extra £100m. But despite the problems caused by ash and strikes, the underlying problems ofhigh costs and a fall in passenger numbers were still the major concern. As wellas fewer passengers, those business passengers who were flying were downgradingto cheaper seats. However, a cause for optimism was that there had been"something of an uptick in demand" from business travel in recent months.British Airways has topped the latest Super brands survey for the first time as Appleplummeted to 14th place below Kellogg's and Andrex. Mr Cheliotis said: "BritishAirways has always performed well in the survey but over the last two years itsreputation has climbed to new heights, partly through the cementing of its successful'To Fly, To Serve' positioning and the residual goodwill from its effective 2012Olympic and Paralympic Games association.There is a survey that said that overall 29% of UK air passengers had experienced abaggage problem during the last five years. "There is absolutely no evidence tosuggest that a quarter of BA passengers have experienced lost or delayed baggage3 | Page
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