British Airways Business Challenges Report: Analysis and Solutions

This report delves into the multifaceted challenges confronting British Airways, a major player in the aviation industry, highlighting the impact of factors such as COVID-19, inflation, fluctuating fuel prices, and evolving environmental policies. It identifies key issues including employee retention problems stemming from salary reductions, high employee turnover exacerbated by allegations of discrimination, reduced customer base due to competitive pricing and substitute availability, and the continuous need for technological upgrades. The report provides a stakeholder analysis, examining the effects of these challenges on employees, owners, customers, government entities, and shareholders. Through secondary data analysis, it evaluates the impact of each challenge, such as the reasons behind high customer service charges leading to a decline in customer numbers. Finally, the report offers recommendations, including competitive pricing strategies and technological advancements, to address these challenges and improve British Airways' overall business performance; Desklib provides access to similar solved assignments.

Declaration page

Business project

Table of Contents
Table of Contents
Executive summary..........................................................................................................................4
INTRODUCTION...........................................................................................................................6
MAIN BODY...................................................................................................................................7
Challenges/ Problems faced by company....................................................................................7
Purpose of report..........................................................................................................................8
Stakeholder analysis.....................................................................................................................8
Evaluation and analysis with secondary data.............................................................................10
Recommendations and conclusion.............................................................................................17
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 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 ton 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). They are processes or systems in organizations.
It have a definite beginning and ending time and they are usually for long term. Organizations
design various business project in order to attain particular objectives but at the same time being
consistent with the existing business strategies of the organization. The consultancy reports are
prepared for non-specific audience in written form. The purpose of consultancy reports is to
specify problems and outline the finding related to problems. The overall consultancy reports
aims to provide the client sensible answers.
The chosen company is British Airways. British Airways is the airline of United
Kingdom which is considered as second largest carrier that is UK based. The company operates
globally. It faces various issues/problems too. The commercial challenges which are faced by
British Airways involve rising fuel costs and environmental issues. The company is also facing
turbulent economic times and employees strikes. The employee strikes have caused the company
to experience the employee dissatisfaction, plummeting profits and reduced customer base as
well. The competition in Airlines have also increased tremendously. So, it also proposes the
challenge of substitutes to British Airways as well. The other challenges faced by company
involves strict landing rules in some countries it operates in, operations and market position of
the company on a global level.
The report will analyse the challenges which are faced by British Airways, purpose and
stakeholder analysis as well. Then it will analyse and evaluate secondary data and propose some
recommendations to the problems discussed.
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. All the
challenges result into reduced market share and decreased overall profitability of the company
(Suau-Sanchez, Voltes-Dorta and Cugueró-Escofet, 2020).

The external challenges which are faced by the company involve the availability if
substitutes and other transportation mediums which are way cheaper than British Airways. The
company also faced the challenge of employee retention as it reduced the salaries of its staff. It
showed adverse impact on employee retention. This reduced employee morale which resulted in
mass industrial actions taken by employees such as employee strikes that caused disastrous
consequences to the company. The company is based on capital intensive and its operations are
very costly in present economic turbulent times such as COVID-19 era. Fuel rates are also
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. As
fuel prices have hiked the transportation costs increase as well.
Another challenge faced by the company is strict landing rules of some countries. This
have presented issue to the company to change its regular operations. The world is suffering
from global crisis of COVID-19, it have influenced the airline industry as well. Profits of British
Airways are plummeting because the travellers prefer alternative mediums which offer low cost
travels. Various environmental policies have also influenced the business. Environmental
policies have caused the company to introduce various changes in its operations, management
and strategies as well. The major challenge faced by company is the entry of new companies and
intensity of competition (Dray and Schäfer, 2021).
From the perspective of consultant, the problems identified impact largely on the
company and its business. As it was analysed that the company faces major problems such as
continuous declining of customers and reducing profits. The company should focus more on
tackling with its challenge of competitive intensity rather than the other challenges. The rising
competition makes it very hard for the company to retain its customers or attract any other
potential customers. The company is also struggling to cope up with the financial impacts caused
due to COVID-19 pandemic. The company is also facing the issue over its wage costs that is
assumed to increase further more. One of the another challenge faced by British Airways was
that its employees alleged the company to have employee discrimination and does not provide
equal opportunities. It have demoralised the employees.
The company can tackle various actions to reduce this issue. It already have 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 impact of research on stakeholders can be understood to be highly specific for
strengthening business standards on extended working goals, with changing competitive
working scenarios diversely on operative horizons. British airways has internal stakeholders such
as employees, owners and managers who feel impact of challenges such as extensive commercial
profits decline within recent time period to be diverse. It can be also analysed that internal
stakeholders feel commercial loss has been severe to be further extended on wider determinants
(TAŞDEMİR, 2021). The decline in commercial working expertise, change in business laws in
international laws and COVID-19 pandemic impact has been severe which has also lowered
business goals diversely. External employees are the range of customers, government and
shareholders which are some of the most essential bodies which further plays crucial role for
operative functional growth diversely.
The challenges within extended parameters, have been critically found to be also typical
where decline in competitive standards, high range of competent standards have been found to
be widely crucial for technical decline in goodwill. British Airways with changing business laws
in international aviation industry, has been facing decline in consumer bookings and further
extended decline among working operational parameters with extensive focus on working
horizons. It can be also analysed that stakeholders feel that business have been further facing

reduction in customer bookings severely, where this has also hampered company goodwill. The
COVID-19 restrictions has also further led to determined reduction loss in customers safety
standards, based on new aviation industry demands for wider business decline. It can be also
found that company customers have been feeling less lucrative to travel wit British Airways,
which has been further found to be also technically specific (Makarova, and Ermolina, 2021).
Evaluation of major factors also head on specific parameters, where this further
determines wider business goals to be hurt within competitive industry horizons. British Airways
with changing rapid business standards, have been facing reduced expertise on untapped
paradigms where the new range of operatives plays specific role for higher level integration. The
brand has been also facing decline in losses, with uncertainty of extensive changes in
international travel laws among countries within international functional domains. British
Airways, need to further invest on high hygienic and sanitation facilities for larger range of
competitive business goals which need to determine wider expertise goals (Wu and Yang, 2021).
It can be also analysed that company aims to further exceed on gaining larger range of
competitive business avenues, for strengthened vision goals and to leverage best working goals.
There has to be new investments done in practical business goals and technical growth rise, to
invest on formation of wider expertise variedly.
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 have 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 have been affected a lot by the COVID-19 issues. British Airways
is not an exception here. The company had faced 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 have 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.
COVID-19 have limited the disposable incomes of people so the population continuously
researches for the products and services that have low costs recently. Disposable incomes refers
to the money which is left by a person to spend as they wish after all the expenses have been paid
(McLaughlin, 2017). Recently, there is intense competition in Airlines industry even tough the
entry of new entrants is difficult in it. The availability if substitutes and other transportation
mediums have also enhanced. Consumers have shifted to other transportation mediums such as
public transport and bikes due to COVID-19 protocols and also because it cost way less than the
services provided by British Airways (Bureau, 2020). The other companies dealing in aviation
Global Airline industry
City pairs
Transportation cost
Trade carried value
Value of tourism spend
0
5000
10000
15000
20000
25000
2020
15473
70.5
5964
310 Column H
Column I
Column J

business that provide services in less prices than the British Airways. 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
Debt raised Equity
raised
Net cash
flow
Interest
payment
Planned
capex
Net debt Debt by
2024
-170
-70
30
130
230
330
430
530
630
632
182
-50