Analysis of Revenue Management and HR Strategies at British Airways

Desklib provides past papers and solved assignments for students. This report analyzes British Airways' business strategies.

THE TRAVEL AND TOURISM BUSINESS
TOOLKIT
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TABLE OF CONTENTS
INTRODUCTION............................................................................................................................. 3
PART 1............................................................................................................................................4
REVENUE MANAGEMENT AND YIELD MANAGEMENT...............................................................4
RESPONSIBILITIES AND RATIONALE OF REVENUE MANAGEMENT............................................4
REVENUE MANAGEMENT TOOLS AND DIFFERENTIATED PRICING STRATEGIES........................5
PART 2............................................................................................................................................6
PRESENTATION.......................................................................................................................... 6
PART 3..........................................................................................................................................21
THE IMPACTS OF LEGAL AND ETHICAL CONSIDERATION ON BUSINESS OF BRITISH AIRWAYS 21
PART 4..........................................................................................................................................23
DIFFERENT TYPES OF FINANCIAL STATEMENTS AND REPORTING MECHANISMS FOR
ORGANISATIONS WITHIN THE TRAVEL AND TOURISM INDUSTRY...........................................23
IMPORTANCE OF BUDGETS......................................................................................................28
INTERPRETATION OF FINANCIAL REPORTS AND STATEMENTS................................................29
CONCLUSION............................................................................................................................... 30
REFERENCES.................................................................................................................................31
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INTRODUCTION
Airline business comprises of many different interdependent and intertwined functions which
are necessary to be performed in respective sequence and collaboration. The operation of the
whole industry can be observed depending on these collaborative functions. Since the
complexities in the system cannot be addressed with conventional methods and tools and
distinct and specific to the company, the approach is required to form in order to achieve
expected efficiency. This report is an individual’s efforts to make an understanding, in a specific
role of Revenue Manager at British Airways, covering different roles of it along with assessing
on how can performances of each of the functions of a revenue manager can be improved, so
that the revenue strategy and outcomes of the organisation can be maintained and developed
as a whole. The report will discuss different possible strategies and techniques which can be
utilised by a revenue manager in order to improve its performance and generate more revenue
for the organisation.
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PART 1
REVENUE MANAGEMENT AND YIELD MANAGEMENT
These two terms are evidently interlined to each other and as a matter of fact they are same in
terms of the underlying concept and nature of their responsibilities, the difference between
them, however, can only be seen in their focus and purpose. The yield management majorly
concerns with enhancing profits of the organisation and that’s how it gets connected to
revenue management. Revenue management is a broader and comprehensive term and yield
management can be seen as a subset of it under certain circumstances. In simple words, yield
management is focused on generating more and more profit and revenue from the available
and allotted resources and capital by using optimization techniques and models, whereas
revenue management sees that how can it allot and facilitate resources and capital so that the
overall revenue generated by the organisation could be improved (Reilly and Williams, 2017).
So, as it can be noticed, that both of these management techniques work toward the same goal
just the difference of approach and focus is there. Revenue manager suggests the board
members or the owners of the organisation that how much more it needs to be invested so
that the revenue of the company could be increased in a proportionate way, higher than
earlier. In the case of British Airlines, their operations are very wide and there can't be a single
revenue manager, can handle all optimization and concerned problems. So in the segment, they
have different revenue managers who work in cooperation with each other providing the best
optimization solution to their concerned functions and then amplifying the effect with other
functions working in parallel.
RESPONSIBILITIES AND RATIONALE OF REVENUE MANAGEMENT
A revenue manager, as discussed has some of the most important responsibilities in the
organisation. The major responsibilities of the revenue manager include preparing the pricing
strategies for different departments as well as products and services offered by the company.
The pricing strategies in airline industry like British Airways involves fixing prices of airfare,
discount, promotional offers, late and early booking charges, luggage charges, maintenance and
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aircraft repair costs, costs to the employee, marketing costs, costs of training and development
programs for new employees etc. (Holloway, 2017). Out of the available budget, the revenue
manager has responsibilities to use minimum possible to gain maximum possible and hence the
strategies for optimization. Since the efficiency of a revenue manager directly reflects on the
company's bank balance, the role becomes more important and significant to every level of
airline operations. The other important responsibilities of revenue manager include conducting
a competitive analysis regarding the pricing strategy of the competitors of the company. This
analysis is quite influential since it gives the idea and an edge over the competitors in offering a
more lucrative deal and prices to the customers.
REVENUE MANAGEMENT TOOLS AND DIFFERENTIATED PRICING STRATEGIES
Revenue management tools are the methods of developing an effective revenue generation
strategy which coincides with organisational revenue generation goals. These tools are
developed according to the need, the type of organisation and the complexities of different
functions involved in the operation. The different tools available in the market for travel and
tourism sector are “Rate Shopping Tool”, “Review Score Tracking” and Hotelligence etc. They
work based on different systems and technologies like 2 way seamless PMS interface, PMS with
enhanced rate management etc. There are also different software tools available for the same
as Workday Financial Management, Casamba Revenue, ResNexus etc. These tools are used
according to the requirement segment and are pretty accurate and proven in the sense
(Landman, 2019).
The pricing strategy as discussed is referred to managing the prices of services and products
offered by the company so that the revenue goals of the company could be achieved. The
pricing strategies which are common in hospitality sector as well as travel and tourism sector
are "Pricing for market penetration" where prices are fixed at and above the market threshold,
"Economy pricing" decided with the consideration of middle-class customers and to increase
the number of customers, “Pricing at a premium” as name suggests and “Phycology pricing”
which is based on market trend and customer expectation analysis.
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PART 2
PRESENTATION
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Talent acquisition and retention are two different things but both are concerned with the same
objective, getting experienced and talented people for the company. Some basic issues which
are common to every airline in the world are:
 Overwhelming workload: Airline industries are known for their long hour jobs and
extensive workload that the employee suffers.
 Underdeveloped company culture: Company culture has a significant role in employee
development and retention, there should be an environment of growth and
development and everyone should get a chance to learn something new every day.
 Lack of growth opportunities: Growth opportunities are a major factor for staying an
employee for a long time.
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 Tight budget for HR activities and programs: People are the most valuable asset in
airline industries so there should be ample amount of money invested in the growth and
development of its employees.
 The absence of effective recognition and appraisal schemes
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The key factors which may influence the job roles of revenue managers are:
• Setting budgetary requirements for HR activities and requirement conflicts, to ensure
their needs are addressed properly in terms f their money-related requirement.
• Fixing competitive pay for employees, as a part of an employee retention strategy.
Analysing what other companies are offering for similar job role and creating a strategy
based on that data to provide a better package than them.
• Tracking revenue of HR departments of BA, capital allotted for development programs
and recruitment activities. Creating a strategy so that no extra and unethical use of
money and resources of the company could take place.
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HR life cycle shown above has six elements starting from attracting the talented professional for
the job role, conducting an intense selection process and assessment phases for employee
hiring, onboarding selected candidates and introduction of them to the people and processes
within the organisation. Development programs through conducting different training and
development activities. Then comes the employee retention part where a better benefit and
compensation plan in needed along with better growth opportunities. These six, steps have
been Brocken down and combined into 4 simpler and more concise parts,
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