Comprehensive Report on Revenue Management and HR at British Airways

This report provides a detailed analysis of revenue management principles and HR strategies within the context of the travel and tourism industry, focusing on British Airways as a case study. The report explores various aspects of revenue management, including market segmentation, booking patterns, demand forecasting, pricing, and inventory management, highlighting tools like capacity utilization, discount allocation, and late booking strategies to maximize profits. It also examines the HR life cycle, including recruitment, education, motivation, and evaluation, alongside a performance management plan designed to address performance deficiencies and minimize staff retention issues. Furthermore, the report outlines relevant legislation, such as the Carriage by Air and Road Act, Athens Convention, Health and Safety at Work Act, Equality Act, Sex Discrimination Act, Gender Discrimination Act, and Unfair Dismissal, emphasizing their impact on HR decisions and compliance within the industry.

Understanding Business Tools
For Travel and Tourism

INTRODUCTION
Human resource plays an important function in every company. It deals with all the
respective needs related to human resource in an organisation and helps in fulfilling the basic
requirements of the human resource of the company. This study is based on the British airways
which is a UK based travelling company providing its services in airline industry. It was
established on the 31 march,1974 under international airlines group. It has its headquarters in
Harmondsworth and waterside United Kingdom. This report will include revenue management
principle with respect to travelling industry and also different tools that generate maximum
revenue. The study also contains different stages that are involved in HR life cycle and also plan
for performance management with respect to revenue manger in order to resolve the negative
behaviour and to minimize staff retention issues coming towards the organisation. This report
will also highlight the different types of financial statements.(Hnátek, 2015).
LO1
P1 Rationale and principles of revenue management for travel and tourism industry
Revenue management deals with optimisation of financial results and has importance in
hospitality industry. Though there are business challenges in airline industry but yet they need to
raise productivity, profits and positively responding to market challenges for enhancing the
customer experience. For overcoming all these present and future challenges, effective revenue
management is required. Solutions are required that have cutting edge technology to support
airlines to realize the objective of revenue optimization.
Revenue management Principles
Market Segmentation
Market segmentation is the division of market customers in groups or different segments
on the basis of their characteristics. It helps the airlines to determine which group or areas it has
to focus on for maximising its revenues depending on the group on which is helping to generate
maximum revenues.
Booking Patterns and historical demand
British airways is having high demands because of its reliability and trust among
customers. Booking patterns are basis for taking decisions on revenue management. Booking
patterns should be different for different customer base which will help it in increasing revenues
of company (Palmer and Bejou, 2016).

Demand Forecast and demand analysis
British airlines should take measures for forecasting its demands at different times. It will
help the company to make necessary arrangements for fulfilling demands of customers. By
analysing demand properly the company can decide where and how it can increase its revenues.
Pricing & Inventory management
Pricing policy of airlines should be reasonable and properly designed, customer should
not feel that they are being overcharged for the services. It can decide its prices according to
destinations and as per different events and demands for the flight over particular routes. Along
with pricing inventory, management is also important for airline company. Company should lay
emphasis on maintaining proper stock so that problems pertaining to stock-outs and higher cost
can be avoided.
Overbooking
Another revenue management principle is overbooking and it is important for every
company to take out maximum benefit out of these principles. Overbooking occurs because of
high demand occurs pertaining to the services offered by firm.
P2 Precise sector of travel and tourism that applies revenue management tools in order to
maximise profits.
There are different revenue techniques for increasing sales of company. It generally
includes targeting customers in more efficient and meaningful way for increasing its revenue.
Capacity utilisation
Capacity utilisation in airline refers to full utilisation of available seats in flights.
Utilising all seats will increase its revenue. Companies have to take promotional tools for
increasing sales of British Airways so that it has full seat occupancy. Full occupancy will
increase its revenues and profits (Kozielski, 2017).
Discount allocation
Discount allocation can be used as a tool for maximising profits of any company. British
airways can plan discount policies which will attract new customers, It can give discounts on
booking for more than two person. It can also provide free food services over long distances or
light snacks for short journeys.

Duration control
Company can take appropriate measures for duration control. Duration control can be
done by making proper schedules for different times. It can reduce undue holding of flights so
that the revenues will not be sacrificed because of it.
Late booking strategies
Company can frame late booking strategies for increasing its revenues. British airways
can have options for immediate booking with high prices. Company will receive more revenues
for on the spot bookings. Late bookings options should be available for the company as it will
help to generate high revenues by charging additional funds.
Influence of different pricing strategies
Pricing policies play a vital role in increasing the revenues of company. The organization
shall choose specific pricing policy. Revenues will be generated only when pricing strategies are
effective. Differentiated pricing policy can be used by company as it is a travel and tourism
industry which has to charge prices according to their demand over different occasions.
Ineffective pricing policy can lead to loss for the company if they charge low during season, it
may not have enough revenue to run its flight at low rates on off season times(Kimes and Wirtz,
2015).
Variable pricing strategy differentiating airline service products for charging different customers
differently.
It is important for company to adopt variable pricing strategy for its different customers.
Company can charge high prices for its products services to premium customers and high
business class clients whereas charging high to executive class clients can affect its sales as
people would not prefer to buy at high rates. So therefore, it is essential that it lays variable
pricing strategies for its customers to generate revenue and increase profits.
LO 2
Slide 1

The Travel and Tourism
Business Toolkit
Slide 2

Slide 3
Slide 4
different stages in life cycle of the HR in relation with the
retention of employees.
 Recruitment
 Education
 motivation
 Evaluation

Human resource plays a vital role in the success and growth of any organization. Mainly
HR has 5 stages in its life cycle. Each stage has its own set of challenges and roadblocks but all
these stages are very important for the overall growth and development of its employees.
Successful completion of these stages can be beneficial for the organisation in the long run.
HR life cycle stages-
Recruitment:- It is imperative for the human resource department to recruit and select
right kind of people at right job at right time and at right place if they wish to achieve goals and
objectives efficiently and effectively. The hiring decision basically plays an important role to
boost turnover, growth and productivity. For British airways HR should hire dedicated and hard-
working employees that can contribute towards the growth of the company by using their
specialised skills and talent.
Education:- The newly selected employee must be educated by the HR department about
the rules and regulations of the company, work culture, duties, authority and their accountability
in order to avoid confusion and chaos in the near future. In this stage of life cycle, the HR
department of British airways works in order to communicate the organisation's culture to
employee, provide training to employees and assign co-worker to the new employees. So that it
increase the retention of employees in organisation
Motivation:- in means that the providing the motivation to employees by providing the
morale development and boost the efficiency. In first 90 days of joining leaders have to focus on
the performance of the employees and retention for new hirings. Also keeping them engaged in
the works. British Airways offering the benefits of the growth. So that employees retain in
organisation.
Evaluation:- In this stage a supervisor supervise activities of employees and record the
performance of employees. British airways HR managers closely supervise the performance of
the revenue managers and record their performance and evaluate the challenges faced by them
and support them with feedbacks and helps them in developing the carrier.
Slide 5

Performance management plan:- It is a potential tool for employees with performance
deficiencies and it gives them an opportunity to improve their performance. It may be used to
address fails to meet specific job goal. It is to recognition of the skills and gap of training. To
create the performance management plan following steps should be considered.
Set objectives and goal:- to create the performance management plan first step in to set
the objectives and the goal for what plan is making. For the revenue manager objectives should
be related to the performance and work of managing the revenues of British airline. Objective
must be achievable which remove the negative attitude towards the job and create positive
attitude for the working.
Consult to the key player:- to the successful implementation of performance
management involves a collaboration of employees which boost morale of the employees which
positive the working environment in organisation.
Create the action plan:- It create the action plan for implementation and define the
team goals and break them into small parts so that it can be achievable easily. If the work is

divided among them adequately then it increases their overall performance which ultimately
boost the efficiency of the British airways.
Share the new performance strategies:- after creating the action plan it is to share the
details of the new performance strategies to employees of the organisation. For the revenue
managers have to to do the works according to plan. So that the working environment increase
which helps to retain employees.
Keep track of the progress:- after the implementation of of plan keep track progress of
the plan so that it can give the best results and also it increase the performance of the employees
by the regular monitoring of the work also it creates the positive environment of the working.

Slide 6
Slide 7

LO 3
P 5 legislation act that should be followed by the travel and tourism industry
Legislation act:- There are several acts that are created by the legislature called legislation act.
Acts to be followed by the travel and tourism industry are as follows-
Carriage by air and road act, 1979:- This act states that if any damage has occurred to
the passenger while travelling through Air ways or roadways due to fault of traveller than tour
operators are responsible and have to bear the cause.
Athens convention 1974:- the act says that the any injury and damage happen to the passenger
due the carelessness of the traveller than it have to bear the causes of that.
The health and safety at work, 1974:- The act explains that it is the duty of the
employer to provide the health and safety to its employees while working and also provide
proper training to employees and improve the chances of development of the employees. This act
affect the decisions of the HR by providing the health and safety to all the employees working in
the organisation by providing the safe and secure working(Craddock, 2018).

The equality act, 2010:- Equality act means that all the candidates must be given equal
chance to apply for the job irrespective of their cast, creed, colour and gender. It also aims to
treat all the employees equally in the organisation to perform the task and also employees have
the rights to get equal paid on the same level of the work and same level of the post. The equality
act influence HR decision by changing in the decision forb the employees working in the
organisation have to treat same.
The sex discrimination act, 1975:- this act means that the employer can not discriminate
the employees on the basis of the sex and sexual preference, every employees have right to speak
against the discrimination at the workplace. So that employer have make decisions according to
that which follow the act.
Gender discrimination act, 1975:- no employees can discriminate on the basis of the
gender every employees have the same right in the organisation at the same post no matter what
is his/her gender.
Unfair dismissal:- employer have to inform the employees before terminate and also have
to give he proper reason to the employees about the termination also if the employees found that
the any unfair decision is taken employee can file case for that (Schlesinger and Rahman, 2016).
P 6 Impact of company law, employment law and contract law on the decision making of travel
and tourism industry.
Company Law:- UK regulates the companies act 2006 and company law created under
this law. The law protects the laws regarding the to the companies acts. The UK governance
mediates the rights and duties of the shareholders, employees, directors and creditors. It
influences the decisions of the employer by the inter fair of the government.
Employment Law:- This law protects the rights of the employees. It protects the
relationship between the employee and employer. Employment law is collection of law which
solve the conflicts or issues between the employee and employer. Major law of the UK covers
under the employment law is rights against the discrimination where employee get the justice
against the every discrimination happen at workplace by the employer or any other factors also
gets the justice over the abolition of the rights of the employees.
Contract Law:- contract law is to prevent the rights of the contract employees where it
gives the clear relationship between the contract worker and the contractors. Also it differentiate
the employees and contract workers (Pramitha, Wasito and Ozali, 2018).

Example
Pimlico vs smith:- Mr. smith was working in the Pimlico from 2007 to 2011 where they gave
their best service and as a result the company provided them with a van for the work, company
uniform and identity card. In may 2011 smith suffered from the heart attack and was unable to go
to work thus Pimlico terminated him. Smith file a case against the company and claimed that
Pimlico terminated him unfairly. After the hearing, tribunal found that Mr. smith was contract
worker of the company and the employer has the right to terminate him because of three month
absenteeism according to the law of contract.
LO 4
P7 Exploring the different types of financial statements and reporting mechanisms for
organisations within the travel and tourism industry
Financial statements are used to measure the financial position of the company. There are
several financial statements which British airways need to prepare but most importantly they are
of three types, First one is Balance sheet that shows the assets and liabilities of the company.
Second one is profit or loss statement which shows the profitability of company to know the
effectiveness of its operational function. And last one is cash flow statement for knowing
liquidity position of company, it helps to know cash inflows and outflows of company (Caveney,
R., 2017).
Different financial statements types:-
There are different types of financial statements which are to be prepared by the company.
Financial statements are important for companies for maintaining proper records of transactions.
Income statement
It is used to know whether a company is making profit or not. It helps to know the
incomes and expenses of company. It helps to know how efficiently company is operating its
business operations with available revenues. It helps investors to make judgements about
whether to make investments or not.
Balance Sheet
It is also a part of financial statements. Basically balance sheet is prepared for giving
investors an idea about the financial position of company. Including what is owned and owed by
a company (Philipson, S., 2016).
Cash Flow Statement

Cash flow statements are prepared for knowing the cash position of company. A business
must have sufficient liquidity at all time for running its business operations all times without any
break (Cash Flow Statements, 2019).
Profitability ratios
Net profit ratio = NP / Sales
British Airways =1744/12226
=0.14:1
Return on Equity = Profit after tax / Net worth
British Airways = 1447/5774
= 0.25:1
Liquidity ratios
Current Ratio = Current Assets / Current Liabilities
= 4518 / 5468
=0.83 times
Quick Ratio = Current asset -Inventory / Current Liability
=4518 – 131 / 5468
= 4387 / 5468
= 0.81 times
Efficiency Ratio
Asset Turnover Ratio = Revenue / Net Assets
=12226 / 16678
= 0.733 times
Financing Ratio
Debt Ratio = Total Liabilities / Total Assets
= 8,892 / 16,678
= 0.53
Investor Ratio
Return on Equity = Net Incomes / Average Equity

= 1447 / 5107
= 0.2833
P8 Importance of controlling business performance budgets
Budgeting is important for every business. It helps business enterprise to focus on
reducing cost, maintaining cash flows enhancing profits and improving returns. Budgeting is a
basic step required by all businesses to control their financial operations. It is prepared for
controlling business finance, for ensuring that business can meet its funding requirements. It
helps company to estimate its revenues for planning expenditure so that it can restrict excessive
spending that are not part of budget plan(Gupta, Goul and Dinter, 2015).
CONCLUSION
From the above study it can be concluded that for travel and tourism indsutry different
business tools are important and the Company is required to adopt various revenue management
principles for enhancing and managing their overall performance. Revenue management tools
like capacity utilisation, overbooking and such other are to be planned properly for increasing its
profits and revenues. Tourism companies are also required to comply with various legislative
laws. Contract law, company law and employment law has significant impact over business
operations as non compliance can lead to penalties and fines. It also helps to maintain a
disciplines work environment. Financial statements are to be prepared by every business for
having complete records of its business operation. It also gives the investors information to make
their investment decisions.

REFERENCES
Books and Journals