British Airways Strategic Report: Challenges, Stakeholders & Solutions

This report provides an in-depth analysis of the challenges faced by British Airways, primarily due to factors such as COVID-19 and inflation. It identifies key issues like decreased customer demand, financial losses, employee retention problems due to salary reductions, and fluctuating fuel prices. The report includes a stakeholder analysis, evaluating the impact on shareholders, customers, employees, and suppliers. Secondary data is used to analyze these challenges, and recommendations are provided to overcome them, such as competitive pricing and technology upgrades. The report emphasizes the importance of strategic innovation and employee satisfaction for maintaining a competitive position in the aviation industry, ultimately aiming to provide solutions that enhance the company's operational efficiency and market stability.

Declaration page

BUSINESS PROJECT

TABLE OF CONTENTS
Executive summary.........................................................................................................................4
INTRODUCTION...........................................................................................................................6
MAIN BODY..................................................................................................................................6
Challenges/ Problems faced by company....................................................................................6
Purpose of report..........................................................................................................................8
Stakeholder analysis....................................................................................................................8
Evaluation and analysis with secondary data..............................................................................9
Recommendations and conclusion............................................................................................16
REFERENCES..............................................................................................................................20

Executive summary
Aviation industry is a crucial part of all the sectors of businesses. COVID-19 have impacted
various sectors and aviation sector is no expectation. British Airways is one of the companies for
aviation industry. Due to the current affairs such as COVID-19 and inflation etc., British
Airways have faced various issues. The recent changes coming in British airways company has
been found to be authentic based on significant working goals for gaining working vision
oriented pace informatively. Recent report has shed light on issues faced by company within
aviation industry, authentic research based on prior goals for optimum specific efficacy based on
fundamental vision for intricate working enhancement. Also, technology advacement for
extensive growth is correlated on technical extended development based on prior long term goals
for higher priorities among customers.
The issues involved the challenge of employee retention as the company reduced the
salaries of its employees due to rising costs of its operations. It resulted in creating other
challenge for the company which is the challenge of high employee turnover. Fuel prices are
always hiked and fluctuate from time to time. It puts further pressure on the company and
reduces its overall profitability as well. Another issue is the issue of strict rules and protocols of
companies and availability of substitutes in low prices. Other challenges involve the challenge of
financial risks, reduced customer base, competition intensity and continuous needs of
maintenance and technology up-gradation. The purpose of report involves the analysis of various
challenges which British Airways face due to the current affairs such as COVID-19. The report
will aim to provide distinct solutions to overcome these challenges.
The various stakeholders of British Airways involves employees, owners, managers,
range of customers, government and shareholders of the company. Due to the challenges faced
by the company, there is negative impact on the various stakeholders of the company. The

challenge of low employee satisfaction an higher employee turnover have damaged the
reputation of company. The allegations of employee discrimination and reduction in employee
salaries have enhanced further employee turnovers. The damaged goodwill of the company have
resulted into loss of faith in the company by the shareholders. The challenge of rising prices of
fuel, operating costs and competition have reduced the number of customers.
The critical evaluation will focus on analysis of secondary data which will be collected
from secondary resources such as e-textbooks, journals, newspapers and internet. The challenges
identified will be analysed in depth and the data will also be analysed and compared as well. It
will allow the reader to know the impact each challenge makes on the company and its business.
For example as the challenge of high charges of services from customers results in reduced
customer base, the reasons behind it will be analysed in it. The reasons might involve the easy
and cheaper availability of other services or substitutes such as public transport. Another
challenge faced by company is high employee turnover. The reasons behind high employee
turnover involves deduction in employee salaries due to increased operating costs and allegations
of employee discrimination in the workplace. Various recommendations to overcome these
challenges will also be provided. For example for the challenge of high charges of services from
customers, the use of competitive pricing and use of digitization and technology up-gradation is
recommended. Technology up-gradation ill allow the company to reduce costs of operations and
competitive providing will allow the company to retain its existing customers within it.

INTRODUCTION
Business project refers to the activities that are intent to attain the defined business goals
and are usually aligned with the company’s business strategy. In simple words they are the
collection of tasks or activities (Eckroth, 2018). The consultancy reports are prepared for non-
specific audience in written form. The purpose of the present consultancy report is to research on
British Airways and determine the importance of strategy in business. In this regard, this
consultancy report explores the issues faced by the chosen airline company and the ways in
which they may impact stakeholders of the business. In this manner, the present consultancy
report has been made with the purpose of providing solutions to the problems being faced by
British Airways through analysis of secondary data.
British Airways is the airline of United Kingdom which is considered as second largest
carrier that is UK based. While operating globally, the organization is facing various issues. The
major challenge that has been face by firm is related to inflation and government restriction that
has lead in more financial loss, high debt, decrease in demand of customers. In addition to this,
because of financial crises there are various commercial challenges that are faced by British
Airways involve rising fuel costs and employee strikes.
The structure of report will comprise of analysis of the challenges that are faced by
British Airways, purpose for which the report has been made and stakeholder analysis.
Following it, evaluation and analysis of secondary data will be conducted to provide answer to
the purpose of the report. Lastly, justified recommendations and conclusion will be provided
related to strategies that could be used by the firm to stay ahead in the competition for longer
time frame.
MAIN BODY
Challenges/ Problems faced by company
British Airways have been operating its business since 1947. The company have
introduced various changes on its management levels and employees as well from time to time.
As the company works on a global level it faces various internal and external issues (Suau-
Sanchez, Voltes-Dorta and Cugueró-Escofet, 2020).
Likewise, the one of the major issue faces by the company is pertaining to decrease in
demand of customers related to travel and tourism because of impact of covid-19 and rise in

inflation across worldwide. Government has also put lot of restriction on airlines industry in
order to protect people from spread of coronovirus from one person to another in any of the
circumstances. Restriction, decrease in demand and situation of inflation are various reason that
has cause huge financial loss to British airways. Along with it, there has been tremendous
decreased in overall demand of airline services by people living in the society because of spread
of coronavirus that have negative impact on health and well-being of individual. The world is
suffering from global crisis of COVID-19, it has influenced the airline industry as well profits of
British Airways are plummeting because the travellers are avoiding travelling to stay health and
fit for longer time frame. At the same time, from the perspective of consultant, the problems
identified impact largely on the company and its business. Such as continuous declining of
customers, sales and reducing profits. Therefore, in short, the company is also struggling to cope
up with the financial impacts caused due to COVID-19 pandemic
Covid-19 and decrease in overall financial position of the company, has lead in reduction
of the salaries of staff that results in loss of employees and hinderance the growth of
organisation. This reduced employee morale has resulted in mass industrial actions taken by
employees such as employee strikes that caused disastrous consequences to the company. So, the
British Airway to find out alternative strategies to retained employees and have positive impact
on brand image of company. As most of the employees have lost trust that they are being secure
while working in the organisation as they have been dismissed or overall salary has been reduced
to maximum extend.
At the same time, with impact of coronavirus, has cause the Fuel rates unstable. The company
imports the fuel from middle-east region where the fuel prices are always fluctuating (Grewe and
et.al., 2021). The profits of the company are based on the fuel prices that has further decrease
and resulted in huge financial losses to the organisation. Therefore, as fuel prices have hiked the
transportation costs, overall profitability of the organisation has been decreased.
The company can tackle various actions to reduce this issue. It already has taken some
steps to tackle the challenges such as the chairman of British Airways believe it have made
significant progress in overcoming these challenges (Mhalla, 2020). The key solution taken by
company involves well implemented practical innovations which have maintained the position of
company. The company has also worked to maintain its employee satisfaction so that they
remain motivated and employee productivity is not reduced.

Purpose of report
The report aims to find the key issues which British Airways is facing currently. British
Airways is facing various issues which are mainly caused by current affairs such as COVID-19
and inflation. The report aims to provide solutions to the challenges which were identified in the
challenges part.
As a consultancy company evaluation of specific issues is important as it will allow to
diagnose those issues. Evaluation of issues will also allow the consultancy company to identify
the most appropriate solution. The evaluation of problems will benefit the client company which
is British Airways it will allow the company to tackle and eliminate all the challenges more
effectively.
Stakeholder analysis
The Birtish airways has high range of stakeholders where external and internal
stakeholders have huge interrelationship with each other based on specific working professional
priorities. By analysing specific stakeholder matrix, further there will be specific functional
progressive focus done on their working practical importance. Below are the criteria as per
stakeholder analysis which has to be done specifically correlated for further strengthening vital
engagement goals in professional competencies. Matrix factors are as follows:
1. High power and high interest: Shareholders are major external shareholders which hold
high power along with significant interest for company specific engagement. British
airways aims to enhance shareholders power, by setting high priority goals and taking
best steps for productive working goodwill. Such as top management and investors of
company have more power and interest in the organisation so they need to be provided all
crucial information about the firm.
2. High power, low interest: Customers are the stakeholders having high power and low
interest, as they are the one that are make purchase of services of the organisation.
So, they need to be hold power and must be kept engaged with effective working
strategies based on optimum goals.
3. Low power and high interest: Employees are the internal stakeholders which have
low power and high specific interest in strengthening working engagement based on

working strategies. They low power to take decision but have high interested in the
growth and expansion of enterprise.
4. Low power and low interest- Suppliers are shareholders with low power and low
interest, as British Airways is one of the best company having huge extensive own
supply aspects where innovation is huge. Company has focused on maintaining
strong relationship with suppliers that has helped in getting the things in minimum
cost and time frame.
British Airways, further extensively have to develop untapped business goals and invest
on further improvised functional scenarios where stakeholders satisfaction holds huge
importance. The new range of efficacy, wider business goals worked on need to be further
primitively formed on for wider strengthened formation of competitive business goals. It can be
also analysed that companies within recent expertise goals have been taking strategic formation
of targets and tackle issues for higher customers expansion non-functionally (Kulshreshtha,
2021). The rapid changes coming up in aviation industry, heads on high focus on specific
business enhanced growth rise for gaining wider extended market stability. It further has been
found to be also integrated as one of the best vision operative rise, where stakeholders impact has
been also significantly rising on extended business grounds diversely. Also, retaining best
expertise and further extending on higher investments plays crucial role for retaining higher
commercialisation benchmarks and uplifting best working domains goals reached on. The
challenge have also critically developed business decline in business regulations, technically
decline in consumer bookings.
Evaluation and analysis with secondary data
Secondary data refers to the data and information that have been already collected by
other researchers. The data which is used is not fresh and is used by various people. This data is
collected through primary resources by other researchers and is made available to other
researchers to use it for their research. The reports aims to present the data collected on the
various issues and challenges faced by the British Airways caused by current affairs. In the
current repost, the secondary data has been collected through various secondary resources such
as internet journals, e-books, textbooks and newspapers as well (Dube, Nhamo and Chikodzi,
2021).

Recently, it was found that British Airways is facing many challenges due to the current
affairs such as COVID-19 and inflation. COVID have caused a significant loss in the airline
industry. Due to the restrictions many airlines were restricted to travel or to travel with less
passengers have cause various financial crisis to airline companies such as British Airways.
COVID-19 had impacted the world and have resulted in global crisis. This crisis has raised many
other crisis such as inflation and higher costs of products and services more than ever. The
company is still struggling to cover up with the financial impacts caused due to COVID-19
pandemic. As the company operations are very costly and due to present economic turbulent
times such as COVID-19 era, the company had to raise its prices even more to cover up its
operations. It have reduced the profitability of the company. COVID have also resulted in
inflation which have made the costs and operations costly, overall reducing profit ratio of the
company.
Global Airline industry 2019 2020 2021
City pairs 22104 15473 18788
Transportation cost 77.6 (Billion) 70.5 72.8
Trade carried value 6,489 5964 7467
Value of tourism spend 580 310 354

The aviation industry has been affected a lot by the COVID-19 issues. British Airways is
not an exception here. The company had faced major financial crisis in the years 2029-2020.
Due to COVID-19 protocols, the operating costs of the companies increased. Fuel prices also
hiked at time contributing more in operating costs (Liu, Kim, and O'Connell, 2021). As a result
the overall profitability of the company reduced and the company faced major financial crisis.
The impact of COVID-19 has impacted adversely on aviation industry as seen from there above
diagrams. However, it is assumed the aviation industry will rise back in the year 2022. This all
lead in increase overall cost but actually there is limited sources of finance because of limited
sales that has resulted in more financial losses to the organisation.
Furthermore, it has been identified that the Airline companies had to borrow huge
finances in order to cope up with challenges and daily burn rates. The debts of these companies
are still rising. Repayment of these debts have damaged the credit ratings of the companies and
increased financing costs of the companies such as British Airways (Sun and et.al., 2021).
Airline industry debts Amount in billion
(USD)
Amount in
billion (USD)
Net debt 632
Debt raised 182
Equity raised -50
Net cash flow -165 to -140
Interest payment 110-160
Planned capex 130-240
Debt by 2024 865-1100

Analysis: As the companies have huge debts on them. To reduce the debts the companies will
raise the ticket prices up-to 3 percent. As the pandemic is over, the demand of air travel is likely
to return. It will aid companies in restoring their capacities.
Due to COVID-19 the company laid off many employees and reduced their salaries to
control its costs. These actions have demoralised the employees and resulted into negative
impact on employee retention. As a result, the employees took mass industrial actions such as
employee strikes and high employee turnover. They are less willing to firm that does not offer
them security as with impact of covid-19, the company have reduced their respective salaries that
result mental stress on their health. Employee turnover refers to the measurement of amount of
employees which have left the organization in a certain period (Zhao and et.al., 2018). Higher
employee turnover impacts on the goodwill of the company in markets. So higher employee
turnover in British Airways have caused disastrous consequences to the company and reduced
productivity as well. The high employee turnover also results into damaging the image of the
company and appearing less attractive to potential employees of the company.