From the period 1990 to the current age, the aviation industry has been one of the most booming sectors. Worldwide increase in GDP created a wave in the economy. The demand to travel resulted in the growth of the airline industry. During the year 2000 the airline industry suffered one of its most tragic phases regarding to the growth of the industry. This happen mainly due to the problems faced by the world, for instance the terrorist attacks on the world trade centre and the deadly virus named 'SARS' which claimed a lot of lives in south east Asia. Many travelers reduced their travel and preferred avoiding few critical places of the world. Due to this there was a major impact which led to the downfall of the airline industry. The crisis initially stared a slowdown in the demand for airlines and as the crisis evolved the demand started to decrease in a rapid manner.
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British airways completed 90 years of service on 25th August 2009. The origin of British airways could be traced back from the 19th century. Its first ever flight took off on 25th august 1919. Since then British Airways has seen a lot of changes and developments. The first flight operated from London to Paris and it carried only a single passenger and the cargo included newspapers, Devonshire cream and grouse. During the year 1924 many airlines emerged. Out of these four airlines joint hands and formed Imperial Airways limited. They basically provided services to Paris, Brussels, Basle, Cologne and Zurich. In the year 1930 handful of UK air transport companies joint hands to form British Airways Limited which emerged to become the biggest competitor for Imperial Airways. Due to nationalization by the UK government British Airways and Imperial Airways formed British Overseas Airways Corporation (BOAC) in the year 1939.
Domestic and Continental flights were operated by another airline, British European Airways. In the year 1972 British airways Board which was established in the year 1960 merged BOAC and BEA which led to the formation of British Airways in the year 1974.
Marketing Strategies of British Airways:
Marketing is nothing but a mix of Place, Product, Price and promotion. British Airways have based their marketing strategies based on the marketing mix. They have a product strategy, pricing strategy, Promotion strategy.
Product Strategy of British Airways:
Introduction to product strategy:
Product is the main and the key feature of any sector or a company. Place, price, promotion comes along with product. Without a product the other three marketing mixes, place, price, promotion cannot be considered.
The main product of British Airways is providing air carriers (flights) to the customers who wish to travel. It provides various services which are intangible. These services become a part of the product which is sold by British Airways. British airways have different types of classes for travelling which are executive class, business class, club class and economy class. The product sold by British Airways has been divided into different product levels.
The first being the core product what a customer is purchasing. In the case of British Airways it's the flight tickets which are been purchased by a customer. He buys them basically to satisfy his need to travel from one place to the other.
The second is the basic product. In the case of British Airways it is the flight. The customers here book the flights to their destinations on the basis of the schedule provided by British Airways. British airways has a very big network and it connects UK to all parts of the world.The British airways flies to 95 different cities in Europe and 60 other destinations throughout the world. It is rated as one of the busiest airline in the world.
The third is the expected product by the customer. In the case of British Airways it would be the various products such as complimentary meals, drinks, allocated seats and onboard entertainment and other services.
British Airways also provides extra services such as various executive classes. British airways provide gold class, silver class and the blue class. They have different kinds of services to fulfill different kinds of needs of their customers.
Pricing strategy of British Airways:
Always on Time
Marked to Standard
Pricing is nothing but a method by which the price or the value of the product is been calculated. It's the amount paid by a customer in order to enjoy the product or service. While setting the price the company needs to keep to basic things in mind. They are quality and the price. If the price is higher than the quality, the company would run under losses. And if the price and quality are balanced then the company would reach its profits soon.
British Airways has three different strategies. They are;
Premium price strategy:
In this kind of strategy the people of higher class in the society are targeted as they can afford such kind of cost. The main customers for this strategy are executive and business class users. They have been given high quality services as they pay a high price.
Medium price strategy:
In this kind of pricing strategy the medium class of the society is been targeted. Here the quality of services provided is lower than the premium price .in every kind of strategy the quality keeps deteriorating but at a minimum level. This strategy is basically used in order to give competition to various other airlines which provide the same services.
Low price strategy:
This strategy is basically used to compete with low cost carriers like Raynair. British airways provide low cost fares along with added quality services and its name. People would obviously prefer British airways than the other low coast carriers as they are getting British airways at the same cost along with their name.
Considering other competitors British airways revised its pricing policy. The factors determining them are;
-Determining the pricing objectives
-Acting according to the demand
-comparing competitors prices and costs
-selection of a pricing method
British airways have provided various offers during festivals like Christmas. This ticket is generally known as British airways escape ticket. Rates have been slashed to a large extent and also people who travel in silver and gold class have been given free upgrades but only one way of the journey. Domestic flying rates have also been slashed.
PROBLEMS FACED BY BRITISH AIRWAYS:
The attacks on the World Trade Centre in the year 2001 created fear among the travelers and since then the airline industry at a whole faced a huge downfall. Despite all security measures taken in recent time's people travelers are not able to regain their confidence. Due to this there is a slight decrease in travel. But in recent years terrorism has been controlled due to which airline industry has picked up in a rapid manner
Increase of crude oil prices created an economic downfall due to which the airline industry was badly hit. British airways being a part of it faced the problems dude to which they had to increase their fares. The increase in fares led to people choosing low cost carriers and thus British Airways lost a lot of business.
The volcano which erupted in Iceland created lot of disruption in the airspace of UK due to which 4000 flights were cancelled on 15th April 2010. Thos went on for nearly 3 weeks due to which many airlines faced huge losses. British airways were one of them.
The crew of British airways seems to go on strikes for everything possible. In recent years crew members have resorted to strikes based on salaries and staffing issues. Die to this many flights were cancelled. Low cost carriers took advantage of this and British airways started losing its business and the respect of its brand. People started to prefer other airlines due to the strikes. British airways is losing business due to this. The issue is still not been resolved.
The different types of marketing strategies used by rival airlines are much more effective due to which British airways is losing its valuable customers. Various competitors like emirates, Virgin Atlantic, Lufthansa are providing travelers with better services than British airways.
These problems are general in-flight problems faced by the passengers who are travelling on British airways. These problems are based on the feedback and reviews of the customers
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-Passengers travelling have complained about the food which is been served to them during the journey
-Passengers are complaining about the entertainment provided on the flight
-passengers also have complained about the staff and they say that they don't seem to be caring and are only professional.
Strengths: British airways have purchased a new fleet of aircrafts which are highly equipped with the latest technologies available. Its competitors are still on the way to get changing their inventory. British airways have its main strength in its name. The very name of it marks its respect.
Weakness: The marketing strategies of BA aren't as good as its competitors. The reason behind this is that BA is using simple and outdated strategies. Whereas its competitors are using intense marketing strategies which are developed by highly skilled market analysts. British airways suffer losses due to number of strikes every year.
Opportunities: As British airways provide various services, it has got the potential to score customers in the global market. If they do so then globalization can be their strength instead of their weakness.
Threats: the threats of British airways are internal as their decision making is poor. Due to this there is loss in business. British airways have its prime focus on local issues and national issues due to which it fails to see global. Thus globalization is been ignored.