Level 4 Dynamic Aviation Environment: British Airways Case Study

This report analyzes the impact of the dynamic aviation environment on British Airways, focusing on trends, geopolitical influences, and media coverage of the airline during times of crisis. It uses data sets to determine current trends in the aviation sector, performs a definitional analysis of 'geopolitics', and conducts a media analysis to assess how the crisis has affected British Airways. The report highlights the challenges faced by British Airways due to events such as the Qatar crisis and the COVID-19 pandemic, including job cuts, financial losses, and operational disruptions. The analysis incorporates various sources to provide a comprehensive understanding of the airline's responsiveness to these dynamic events.

Dynamic Aviation Environment
Toolkit
A Chosen organisation
Choose one airline/airport affected by the crisis and provide a brief justification for your
choice.
The aim of this report is to highlight the effect which is occurring due to the crisis on British
Airways. British Airways is considered to be the UK's second largest carrier based on the fleet
size and passengers carried. This organisation is taken as base company for this report as
British Airways are serving across the globe which includes Qatar as their location. Due to the
Qatar crisis, British Airways also faces sever issues. The Qatar crisis is the closing of all the
borders, ships and airlines services and due to this, British Airlines would not be able operate
in Qatar which creates impact on their profitability.
B Current trends in aviation
Based on the given data sets, determine the nature of current trends in the aviation sector.
You have three sets of data to consider, each represented by a table. These are given below: le 1:
Passenger numbers (by year) in key airports across the Middle East
2016 2017 2018
Dubai (DXB) 83,654,250 88,242,099 89,149,387
Hamad (DOH) 37,322,843 35,867,752 35,400,000
King Abdulaziz (JED) 31,322,843 33,917,282 41,200,000
Abu Dhabi (AUH) 24,482,119 23,760,561 22,010,866
Riyadh (RUH) 23,400,000 25,038,000 26,772,525
(Source: ACI)e 2: Traffic results for key airlines in Middle East, 2018
RPKs (m) % change ASKs (m) % change LF (%) Pax (m) % change
Emirates 299,967 2.7 390,582 3.6 76.8 58.6 0.2
Qatar 154,080 5.5 231,094 13.5 67.0 29.5 1.0
Etihad 84,269 -6.7 110,300 -4.1 76.4 17.8 -4.3
Saudia 68,500 8.4 102,000 8.0 67.2 34.0 8.3
Oman 25,033 14.0 31,656 7.7 79.1 9.5 10.6
(Source: Airline Business)able 3: Airline industry profitability and traffic, by region, 2018-20
2018 2019 2020 (Forecast)
Africa
Net post-tax profit ($
bn)
-0.1 -0.3 -2.0
- Per passenger ($) -1.09 -2.67 -42.02
RPK growth (%) 8.0% 4.5% -58.5%

ASK growth (%) 7.5% 4.2% -50.4%
Asia-Pacific
Net post-tax profit ($
bn)
6.1 4.9 -29.0
- Per passenger ($) 3.74 2.92 -30.09
RPK growth (%) 7.0% 4.8% -53.8%
ASK growth (%) 6.8% 4.5% -39.2%
Middle East
Net post-tax profit ($
bn)
-1.5 -1.5 -4.8
- Per passenger ($) -6.69 -6.75 -37.03
RPK growth (%) 7.0% 2.3% -56.1%
ASK growth (%) 4.9% 0.1% -46.1%
Latin America
Net post-tax profit ($
bn)
-0.8 -0.7 -4.0
- Per passenger ($) -2.78 -2.24 -27.83
RPK growth (%) 8.0% 4.1% -57.4%
ASK growth (%) 7.5% 3.0% -43.3%
N America
Net post-tax profit ($
bn)
14.5 17.4 -23.1
- Per passenger ($) 14.66 16.95 -38.95
RPK growth (%) 3.5% 3.9% -52.6%
ASK growth (%) 3.4% 2.9% -35.2%
Europe
Net post-tax profit ($
bn)
9.1 6.5 -21.5
- Per passenger ($) 7.94 5.42 -34.39
RPK growth (%) 6.0% 4.3% -56.4%
ASK growth (%) 5.5% 3.6% -42.9%
(Source: IATA)
Note: % change represents the change between the figures for the year shown and the
ones for the year previously, expressed as a percentage of the previous year’s figure.
Higher values represent stronger growth; negative values show a decline.
From Table 1, the number of passenger at Dubai airport was the highest in years 2016,
2017 and 2018 with 83,654,250, 88,242,099 and 89,149,387 respectively as compared to
other airlines such as Hamad, King Abdulaziz, AbuDhabi and Riyadh. In Table 2, Emirates
has the highest RPKs and ASKs with $299,967 and $390,582 whereas, Oman has the lowest
with RPKs and ASKs as $25,033 and $31,656 in year 2018 respectively. From Table 3, the
net post tax profit for North America was the highest in year 2018 and 2019 and it is well

forecast that it will be very low in 2020. The profit made by Asia-Pacific airline industry per
passenger decreases from $3.74 to $2.92 in year 2018-19. The forecasted profit per
passenger of African airline is $-42.02 which one of the lowest cost. The forecasted RPKs
growth for Africa is the lowest by 58.5% with ASK growth of -50.4%. From Table 1, it can be
said that the number of passenger is declined in year 2016, 2017 AND 2018 for both Hamad
and Abu Dhabi and in contrast, King Abdulaziz and Riyadh airport have a constant
increment in terms of passengers. From Table 2, the traffic generated for Ethihad has got
changed in declination manner with -6.7. For Latin American, there is sudden change in the
RKSs growth and ASKs growth with 2.3% in 2918 to 7.0% in 2019 and 4.9% and 0.1% for
years 2018 and 2019. North American is the only country which was having inclined cost
per passenger in2018 and 2019 with $14.5 and $17.4.
C Definitional analysis
Carry out a definitional analysis of the term ‘geopolitical’ using 3 appropriate sources.
Geopolitics is the study of the geographical impacts on power dynamics in international
relationships. The term geopolitics was created around the beginning of the 20th century by
the Swedish political scientist Rudolf Kjellén and it expanded across Europe in the era
between World Wars I and II (1918–39) before becoming widely used during the period.
According to (Anthony Jordan, (2016)), when players such as political leaders, nations,
organisations and companies consider how their actions may influence other political
leaders, countries, organisations and corporations, geopolitics is at work. Geopolitics is by
no means a new phenomenon in politics. Seeking to predict the reactions of people in other
areas of the world has been a component of politics for centuries, but it has grown in
importance before the commencement of the 20th century. As per (Song & Lin, (2017)),
geopolitics has a significant impact on the global economic and political growth. Geopolitics
has becoming an essential topic for worldwide patterning analysis and policy formulation in
the age of globalisation and information technology. It is necessary to conduct a scientific
and methodical study of international geopolitics in order to support its growth. According to
(Aggiesgo, (2021)), geopolitics is a structure for comprehending the complicated world
around us. Global politics, sometimes known as getting what you want in the world
includes thinking and acting globally. Geopolitics is the study of how governments,
companies, terrorist organisations and other entities attempt to achieve their political
objectives through influencing geographical characteristics of the world. Geographical units
are the world's cities, regions, territories, sizes and interconnections.
Secondly, complete the table below to show 3 definitions of ‘geopolitical’ (one from each
source) and some key points relating to the term.

Author (year) Definition Key points
Anthony Jordan, (2016) Geopolitics is not a new
political phenomenon.
Geopolitics is at activity as
participants such as national
elites, countries, companies
and businesses evaluate
how its decisions could
affect other government
parties, countries,
institutions and enterprises.
 Geopolitics is just
not a new
phenomenon in
politics.
 Before the turn of
the 20th century,
geopolitics had risen
in prominence.
Song & Lin, (2017) In the age of globalisation
and digital technology,
geopolitics has become a
key matter for international
trend analysis and policy
development.
 Geopolitics has a
large influence on
worldwide
economic and
political growth.
 This is important to
perform a thorough
and rigorous
research of global
geopolitics in effort
to enhance its
progress.
Aggiesgo, (2021) Geopolitics is defined as
obtaining whatever one
need in the globe, which
entails understanding and
behaving on a global scale.
 Geopolitics is a
framework for
understanding the
complex world
surrounding
ourselves.
And finally, construct your own definition of ‘geopolitical’. Present this below:
Geopolitics is the analysis about how politicians, corporations, terrorist groups, as well as
other groups seek to accomplish its political goals by changing the globe's geographical
qualities.
D Media Analysis
Carry out a media analysis of the organisation using a range of suitable sources to
determine how it has been affected by the crisis.

The purpose of this analysis is to determine how your chosen organisation has been
affected by the crisis according to the media selected. Find two sources to use as the basis
of the analysis. Find a range of source types as coverage will vary across different media.
Important questions to ask yourself here include:
 Coverage – what does this tell you about the crisis and the organisation concerned?
 Bias – is the coverage subjective (opinion based) or objective (factual)?
 How has the organisation been affected by the crisis?
The overall word limit for this task is 600 words max.
Firstly, complete the table below to determine the nature of the coverage of the
organisation:
Source & year Type of media Headline Coverage Evidence of
bias?
Economic
Times, 2020
E-paper Coronavirus
Crisis: British
Airways faces
strike threat
over job cuts
British Airways
is facing a
strike over its
intentions to
reduce
employment,
wages and
working
circumstances.
BBC reported
Bloomberg,202
0
E-paper British Airways
says Covid-19
pandemic likely
to cost 10,000
jobs
British Airways
expects to lose
up to 10,000
jobs as a result
of the Covid-19
epidemic,
despite
reaching
accords or
arrangements in
concept with its
different
unions.
Chief Executive
Officer Alex
Cruz
Secondly, explain how the organisation has been affected by the crisis?
The trade union Unite, that comprises BA cabin staff, stated that the airline intends to
dismiss and appoint thousands of its new employees and that it aims to protect its
employees by instantly going on strike, according to the BBC. British Airways that is owned
by IAG and Unite did not reply to demands for comment right away. Unite has claimed BA
of attempting to dismiss and rehire certain employees on less generous conditions. For
several weeks, the Union refused to hold discussions with BA. BA, like other airlines, is

trying to emerge from the pandemic as a result of consumer concerns about the virus and
additional limitations are making recovery much more difficult. A 14-day quarantine for
passengers coming to the UK from Spain, a key market for BA, went into effect 2 days later.
As of last week, the main British airline has lost 7,200 employees, according to Chief
Executive Officer Alex Cruz, who spoke to Members of parliament in London. According to
him, the firm is still in talks with some labour organisations and has backed down from a
proposal to dismiss and rehire employees on new contracts. British Airways, which is
owned by IAG SA, was previously chastised by unions and politicians for its first intention to
lay off up to 12,000 employees. Earlier this summer, the Transport Select Committee
criticized the airline of exploiting the coronavirus as a pretext to reduce its workforce. The
epidemic has halted years of progress in the aviation sector, causing aircraft to be
grounded and creating a downturn that might last for years. British Airways has joined
other carriers across the world in laying off employees as the virus essentially wipes off
worldwide traffic flow. According to IATA, European carriers would be the most impacted
by the crisis, with only enough cash to last only two months on aggregate. Having followed
labour discussions, all shuttered employees would get 80% of their regular salary, according
to a statement issued by the Unite union on Thursday. Under a nationwide scheme, the UK
government would finance up to 2,500 pounds ($3,095) each month, with the airline
picking up the cost for salaries beyond that amount. Among competitors in the United
Kingdom, EasyJet Plc lay off cabin workers for two months on Monday after halting its
entire fleet, while Virgin Atlantic Airways Ltd. employees have signed up for eight-week
vacations, longer annual leave, or voluntary termination. International Consolidated
Airlines Group, previously said that it would withdraw a scheduled cash distribution of 337
million euros ($366 million) and set aside all of last year's profits to help weather the travel
slump. Permanent redundancies requested by BA will be suspended as part of the lay-offs
agreement, according to Unite. Employees will also be permitted to transfer pension
payments into their compensation for a limited time in order to supplement their income.
The airline stated that it is preparing a statement regarding the measures. According to the
International Air Transport Association, European airlines would be the most impacted by
the crisis, with enough cash to last barely two months on average. IAG is in a stronger
position, with more than 7 billion euros in cash, according to CEO Willie Walsh, who has
stated that the firm has no intentions to seek public financing.

E Performance of the organisation
Analyse the performance of the organisation chosen over the last 3 years using figures
relating to categories such as: passenger numbers; flight movements; customer
satisfaction; revenue, costs and profitability.
You will need to find figures relating to the organisation’s performance in the above
categories. Financial information such as revenue, costs and profitability is easily obtained
for airlines. Annual reports are the best place to look. Several airports, particularly those
that are government owned will not necessarily publish financial results. If your chosen
organisation is an airport, your focus is more likely to be on figures related to passenger
numbers, flight movements and customer satisfaction.
Your analysis in this task will be enhanced by the use of charts, tables and graphs. Better to
create these yourself using Excel (or similar).
This task should be completed within 750 words max.
British Airways is the United Kingdom's biggest worldwide commercial airline and one of
the nation's finest global carriers. The Group's headquarters are in London, with substantial
operations at Heathrow, Gatwick and London City airports. British Airways, as part of IAG,
runs one of the most comprehensive worldwide scheduled airline networks, in
collaboration with joint business, codeshare and franchise partners. British Airways is a
founder partner of the oneworld alliance, which partner airlines fly to over 1,000 locations
in 170 countries. As a result of the COVID-19 epidemic, 2020 was an unusually terrible year.
British Airways has never encountered a crisis of this size in its 100-year existence, forcing
us to drastically curtail our flight schedule, personnel, fleet and operations as they
navigated constant, rapidly changing worldwide restrictions on travel and three UK
Government lockdowns. BA's timetable was reduced by 66 % compared to 2019.British
Airways has halt production in China at the end of January 2020 (Wang & Xing, (2021)). By
March, the virus was spread throughout Europe and the UK implemented its first
nationwide lockdown that month. The UK Government placed a restriction on all but
necessary travel and they only ran 5% of their intended schedule between April and June
2020, compared to the same time in 2019. During this time, they flew 134 return flights
from 21 nations, maintaining critical aviation linkages and returning 40,000 People to the
UK. Despite achieving agreements, about 23% of the employees left the airline as part of
the reorganisation and layoff programme in 2020. To minimise management overhead,
duplication and expense, management established a single cabin crew fleet located at
Heathrow, contracted the airline's Gatwick operating business and combined the airline's
three engineering locations in Wales into a single facility. Due to lower interest for travel,
the airline centralised its services into London Heathrow Terminal 5, temporally stopping
service from London Heathrow and London City and completely decommissioned its entire
B747 aircraft throughout the year. The government's Coronavirus Job Retention Scheme

has assisted the airline in retaining numerous employees during the crisis (Kim & Huang,
(2020)). In 2020, they got £258 million from the programme, for that they are quite
thankful. British Airways received a £298 million loan from the Bank of England Coronavirus
Corporate Financing Facility. The guaranteed US dollar Revolving Credit Facility was
expanded for one year from 23 June 2020 to 23 June 2021 on March 30, 2020. The
available facility was $768 million as of December 31, 2020. British Airways signed up a five-
year term loan of £2 billion on February 22, 2021, covered by a network of banks and
partially assured by UK Export Finance. Despite the obstacles that this time has brought,
they are dedicated to the airline's long-term success. In the short term, the above ensures
increasing business performance and implementing carbon adjustment and elimination
projects, while being in the medium to long term. It indicates putting money in the
development of sustainable aviation fuels and assisting in the rapid adoption of new
technologies such as zero-emission hydrogen-powered aircraft.
Maximum volume, as indicated by ASKs, fell by 65.8 % for the year, while passenger traffic
fell by 74.3 % to 12.3 million. Travel restrictions imposed by governments throughout the
world as a result of the virus's global spread, notably from late February 2020 onward,
resulted in a major drop in demand across all areas. Capability decreases were first
observed in the Asia Pacific area in January and February, with widespread cutbacks
beginning in late February as the epidemic expanded to Italy, the rest of Europe and
eventually to many nations across the world (Xie & He, (2020)). This equated to total
revenue before extraordinary items of £4,001 million for the fiscal year. As to the
considerable drop in passenger timetables, freight hauled declined by 35.4 %. The Cargo
business has been modified to guarantee that cargo-only flights provide a positive financial
input, with yields improved to meet all aircraft operational costs. Revenue from cargo grew
by 25.2% to £890 million. Fuel, oil and emission costs, except the unusual penalty for
overhedging, fell by £2077 million, or 64.2 %, to £1160 million from £3237 million the
previous year, indicating lower capacity. The 12-month mean commodities fuel price was
lower than in the same time previous year, falling from $628 per metric tonne in 2019 to
$376 per metric tonne in 2020. Employee expenses before exceptional items fell by £834
million, or 33.0%, to £1,695 million from £2,529 million the previous year. Employee
expenses were reduced by a credit of £258 million related to payments received from the
UK Government under. From the beginning of April until the end of December 2020, the
COVID Job Retention Scheme was in effect (Parsa & Atan, (2019)). The reorganisation and
redundancy programme resulting in further pre-exceptional staff cost reductions, as well as
volume-driven benefits as a result of the reduced flight schedule.

F Response of the organisation to the crisis
F. Determine the effectiveness of the organisation in response to the Qatar diplomatic
crisis.
It really didn't take time for passengers to feel the impact of Saudi Arabia, the United Arab
Emirates, Egypt, Bahrain, Yemen and the Maldives' attempt to abandon diplomatic ties with
Qatar. After accusing Qatar of harbouring a plethora of terrorist and sectarian organisations
that strive to cause instability in the region, those nations completely isolated the small oil-
rich state by closing their ports and airspace to Qatari ships and flights. On Monday, Qatar
Airways stated on its website that it will stop all flights to the 9 Saudi Arabian destinations it
serves. Following the disruptions, it announced that it has also stopped flights to the United
Arab Emirates, Bahrain and Egypt till further information. Emirates and Etihad, as well as
smaller airlines flyDubai and Air Arabia, stated that all flights to and from Doha, Qatar's
capital, will be suspended beginning Tuesday. Emirates, Etihad and Qatar Airways are all
providing full reimbursements to passengers whose flights have been disrupted as a result
of the adjustments (Chen & Huang, (2020)). Furthermore, Qatar Airways organised three
charter flights on Oman Air from Jeddah, Saudi Arabia to Muscat, Oman with
interconnecting flights to Doha provided by Qatar Airways, in order to transfer delayed
customers out of Saudi Arabia. The diplomatic crisis caused havoc at Gulf airports, forcing
major international airlines such as Qatar Airways, Dubai-based Emirates and Abu Dhabi-
based Etihad to react to the new regulations. Egypt and Bahrain both withdrew their
diplomats deployed in Qatar and forced their Qatari equivalents to leave Cairo and
Manama within 48 hours; while both Saudi Arabia and the United Arab Emirates gave
Qatari residents in their regional nations two weeks to depart. Doha's shop shelves were
empty of essential goods as people hurried to stock up, but the stockpiling was short-lived
as Turkey and Iran began shipping food by air and sea. Over the first four weeks of the
crisis, Qatar's stock market lost roughly 10% of its value, or about £12 billion. The stock
market, on the other hand, has subsequently regained 6% of its pre-crisis value. Liquefied
natural gas exports have also been unaffected thus far and the emirate's minister of finance
claims that Qatar has the capacity to protect its economy and money. Due to this crisis,
several nations wants to prohibit any support for persons or groups classified as terrorists
by Saudi Arabia, the United Arab Emirates, Egypt, Bahrain, the United States and other
nations (Randhawa, Wilden & Gudergan, (2021)). The selected organisation was not able to
provide their services to Qatar which causes a direct impact on their profitability. Along
with this, the country also stop importing and exporting the products through ship services
as well. The company could provide their services to Qatar by offering them an indirect
route to travel so that people would be able to arrive and departure easily without causing
any issue to them.

References
Provide a list of references of the sources used throughout this toolkit
according to UCB standards.
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Geopolitics: Definition, Foundations & Example. (2016, April 25). Retrieved from
https://study.com/academy/lesson/geopolitics-definition-foundations-example.html.
Kim & Huang, (2020). Control of multi-agent collaborative fixed-wing UASs in
unstructured environment. Journal of Intelligent & Robotic Systems, 97(1), 205-
225.
Parsa & Atan, (2019). Green hub-and-spoke network design for aviation industry. Journal of
cleaner production, 229, 1377-1396.
Randhawa, K., Wilden, R., & Gudergan, S. (2021). How to innovate toward an
ambidextrous business model? The role of dynamic capabilities and market
orientation. Journal of Business Research, 130, 618-634.
Song & Lin (2017). Progress in international geopolitical research from 1996 to
2015. Journal of Geographical Sciences, 27(4), 497-512.
Wang & Xing, (2021). A Dynamic Marine Oil Spill Prediction Model Based on Deep
Learning. Journal of Coastal Research, 37(4), 716-725.
Xie & He, (2020). Influence of cycling aging and ambient pressure on the thermal safety
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Online
(British Airways Plc Annual Report and Accounts Year ended 31 December 2020, 2020)
Available through; https://www.iairgroup.com/~/media/Files/I/IAG/annual-reports/ba/en/
british-airways-plc-annual-report-and-accounts-2020.pdf
(British Airways says Covid-19 pandemic likely to cost 10,000 jobs, 2020) Available
through; https://www.business-standard.com/article/international/british-airways-says-
covid-19-pandemic-likely-to-cost-10-000-jobs-120091602082_1.html
(Coronavirus Crisis: British Airways faces strike threat over job cuts, 2020) Available
through; https://economictimes.indiatimes.com/news/international/business/coronavirus-
crisis-british-airways-faces-strike-threat-over-job-cuts/articleshow/77216600.cms
(Geopolitics defined, 2020) Available through; https://chass.usu.edu/aggiesgo/geopolitics-
defined