Case study provided by Superbrands.
Air travel generates over £200 billion in revenues and provides at least 28 million jobs around the world. It is an extremely competitive market, with over 260 airlines fighting to win a slice of 1.6 billion passenger journeys per year.
Historically, airline passenger numbers have grown rapidly, with traffic on scheduled airlines rising at an average annual rate of just under 5%, while cargo volumes have increased even faster.
British Airways is the largest international airline in the world, carrying more international passengers than any of its competitors. Last year over 44 million passengers flew on 499,000 British Airways' international scheduled services. That is the equivalent of 80 passengers checking in every minute, 24 hours a day, and a British Airways flight taking off and landing every 60 seconds.
One of the main stimuli to air travel has been the privatisation and deregulation of the industry. One feature of this changed landscape has been the emergence of the 'no-frills' airlines, which have achieved rapid growth in market share in the US domestic and short haul European markets.
A second feature of this has been the formation of global alliances between carriers ‹ allowing them to co-operate on such activities as marketing, ticket booking and frequent-flyer programmes.
The airline industry suffered a major shock in 2001, with the combined forces of a global slowdown and the use of commercial aircraft in the September 11th terrorist attacks. The effect on the industry was a sharp drop in passenger demand, and 2001/02 was forecast to see airlines sustaining large losses as the industry dealt with the biggest challenge it has faced for a decade. A year on from September 11th, the airline market was still a long way from making a full recovery, although the current opinion is that these events will not dent the industry's longer-term growth trend or its economic importance.
One of British Airways key achievements of 2002 is a new short haul pricing structure for the UK and European markets. The airlines new commercial proposition promotes competitive low cost fares with a full service offering.
Introducing lower starting fares and the removal of restrictions such as the Saturday night stay rule; provides the customer with a choice of greater flexibility and value for money, enabling British Airways to offer more competitive options for both its business and leisure customers. This heralds a fundamental shift in British Airways price advertising strategy. British Airways now offers fares starting from £59 return on domestic flights and £69 return to Europe.
British Airways received numerous awards in 2002, including Best Airline in Western Europe, Best Transatlantic Airline and Best International First Class by the OAG. Also Best Airline, Best First Class, Best Business Class, Best Shorthaul Flights, Best Frequent Flyer Programme, Best Cabin Staff and Most Innovative Airline by the Business Traveller Magazine. Also in 2002, British Airways received the NOP World Business Superbrands Award for being Best Community Member.
British Airways origins date back to the pioneering days of civil aviation, following the end of World War I. Its forerunner, Aircraft Transportation and Travel Limited (AT&T), launched the world's first daily international scheduled air service between London and Paris in 1919. The single-engined de Havilland biplane carried just one passenger and took two and a half hours to reach Le Bourget. In 1924, AT&T merged with three other fledgling British airlines to form Imperial Airways Limited. During the 1920s and 1930s services were offered to Egypt, India, South Africa, Singapore and West Africa. Meanwhile, a number of other UK air transport companies merged to form the original privately owned British Airways Ltd in 1935. Imperial Airways and British Airways were nationalised in 1939 to form British Overseas Airways Corporation (BOAC).
The 1950s saw the dawn of the passenger jet age and BOAC led the way flying a Comet to Johannesburg in 1952, halving the previous journey time. BOAC also operated the first transatlantic jet services in 1958, with two Comets flying simultaneously between New York and London.
In the 1960s, other British airlines began to offer competing services. In 1967, the government unified these independents into a third carrier, British Caledonian. In 1972, the boards of BOAC and BEA were combined and, in 1974, the two formally merged to become British Airways. Continuing its pioneering spirit, British Airways launched the worlds first supersonic passenger service, simultaneously with Air France in January 1976.
In February 1987, British Airways was privatised. Over one million applications were received for shares, making the floatation eleven times over subscribed. The oneworld alliance came into operation in February 1999 and combines the services of British Airways, Aer Lingus, American Airlines, Cathay Pacific, Finnair, Iberia, and Lan Chile, serving more countries than any other airline alliance.
British Airways has developed a strong relationship with Qantas, operating a joint service agreement, which allows sharing of revenues on Europe - Australia services. It also has simple code-sharing arrangements with several other airlines outside the oneworld alliance. Taken together with its extensive network, these partnerships increase the scale of British Airways presence in the major world airline markets
British Airways has a fleet of over 220 aircraft including 56 Boeing 747s, 45 Boeing 777s, seven Concordes and 38 Airbus A319/320s.
The airline's offering is organised around a portfolio of products and services developed in order to meet customers' needs.
Concorde is the flagship of British Airways fleet and its passengers receive priority treatment wherever possible, with exclusive lounges at London Heathrow and JFK, and specially trained crew to ensure the premium level of service is delivered superbly.
FIRST, described as the "ultimate in privacy and control" has been refreshed and enhanced since its original launch. The tailored service and personal space offered by FIRST allows travellers to work, rest and dine at any time during their journey. The cabin layout provides a private environment and seats which converts to a six foot six inch flat bed.
New Club World provides the first fully flat bed in business class. Each seat benefits from in-seat phone and laptop power, a movable privacy screen, improved in-flight entertainment and flexible dining options ‹ including pre-flight dining on selected routes. Club World also gives travellers access to over 200 airport lounges worldwide. 75% of the British Airways long haul fleet is now fitted with FIRST, New Club World and World Traveller Plus cabins. British Airways intends to fit all 747 aircraft from London Heathrow with these cabins and also to introduce them to the Gatwick fleet.
World Traveller Plus is a premier economy cabin with a maximum of five rows of seats and increased legroom. It offers more space and a quieter, separate cabin, ergonomically designed seats and redesigned cabin interiors.
World Traveller has a comprehensive range of services and benefits for customers flying long haul in economy. It has a family focus (including 'Feed kids first' and children's activity packs) aiming to make long haul travelling easy.
Club Europe services are available on European flights and enables travellers to choose from a variety of check-in options and ground services. British Airways offers the best network, schedule, and frequency available.
Euro Traveller has the same choice of check-in options, network, schedule and frequency as Club Europe, but offers a premium yet value-for-money service.
Within the UK, the brand offers more flights to more destinations with the best punctuality.
The British Airways Executive Club is an established loyalty programme with over three million members worldwide. Benefits include dedicated phone and web facilities, priority boarding and the ability to earn BA Miles when using British Airways or any airline, hotel or car hire partner.
On Business is a loyalty programme for small to medium sized companies. Companies can earn points for flying with British Airways which they can then exchange for free British Airways flights and other cost saving rewards.
A range of check-in options are available when flying with British Airways, including telephone, online, self-service and London Paddington and airport departure gate check-ins. Online check-in gives travellers the opportunity to save time at the airport by checking in via the internet before they leave the office or home.
British Airways e-ticket can be amended up to 30 minutes before check-in and gives passengers the opportunity to avoid airport queues by using a British Airways Self-Service Check-In machine.
As well as a full range of customer services, British Airways supports a dedicated extranet site for the travel trade that provides information on all British Airways products and services, including any promotional offers. The extranet site also supports the highly successful functionality Ask BA, which allows users to ask a question that is answered instantly online.
British Airways recently re-designed its website home page to make www.ba.com easier to use and more appealing in the very competitive online selling arena. The new look home page is aimed at helping new and existing customers have a better online experience. Links to British Airways special offers and the Executive Club, plus advice on how to access British Airways new cheaper fares are in place.
The website is now the most popular way for passengers in the UK to book their tickets directly with over one million visitors a week and a weekly average of £6.4 million revenue generated.
British Airways marketing campaigns have won numerous awards including, in 2002, CIMTIG Gold awards for Best Creative Media Plan, Best Television Advertisement ‹ Business, Best Outdoor Advertisement, Best Business Press Campaign.
Recent promotions include the highly successful Be There campaign (January 2002), which concentrated on the fact that it is better to do business face to face. This promotion won the Best Television Advertisement ‹ Business in the CIMTIG 2002 awards.
British Airways has a dedicated B2B sales force and marketing team, building stronger links between the airline and its corporate customers. The marketing team have recently developed newly designed corporate communications to ensure consistency of the brand is delivered.
From September 2002, British Airways mounted its largest and most sustained advertising and marketing campaigns, in which price was made the hero of all communications. The campaign line Have you seen how small our prices are launched on September 16th 2002. It also represented one of the broadest campaigns ever, designed to reach consumers across a wide mix of media and channels with TV, press, radio, outdoor, online and innovative ambient advertising such as laser projections across London and advertising on cash point machines. The adoption of TV for this campaign marked the first return to price led advertising on TV for over four years. The campaign aimed to force a reappraisal of British Airways; to get British Airways back on the consideration list of customers who had been attracted to the no-frills carriers. The second advertisement with the strapline -- There's other ways and there's British Airways -- was the second phase of the short haul brand re-assertion. The advertisement demonstrates that British Airways offers value added services that some no-frills airlines fail to provide.
British Airways also launched its first ever broadcast sponsorship -- The British Airways Destinations Report on Sky News -- airing five times a day, 365 days a year.
Customers look for airlines that inspire confidence and that they can trust. British Airways responds to this with the twofold promise of reliability and reassurance.
Its reliability is reflected in the scale of operations and presence in the market place that the British Airways infrastructure allows. The choice of destinations and size of the fleet mean customers value British Airways schedules as well as trusting the airline to have enough planes to keep a service running.
Reassurance is underpinned by safety and security ‹ from baggage handling to punctuality, cleanliness and schedules, through to products and services. The airlines heritage, quality standards and attention to detail also supports this.
These traditionally British values are a fundamental part of the British Airways brand identity. As national flag carrier, British Airways UK customers voice the statement travel the world and feel at home. International customers, who place similar emphasis on such values, echo this sentiment just as strongly. What they are looking for essentially is a British experience in the air.
Things you didn't know
© 2003 Superbrands Ltd
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum here.
British Airways is the largest airways in the United Kingdom in terms of its fleet size and international destination flights. If it is about carrying passengers, it comes at number second. The airway has its headquarters near the Heathrow Airport in London.
In order to maintain its position as one of the leading Airways it has set and maintained its high standards in terms of services. The company provides twenty-four hour security services to its customers and handles all the situations in a calm and controlled manner. The quality of services rendered has helped British Airways to define themselves as one who provides “Quality flights for all people”.
Product in the Marketing mix of British Airways
The products offered by British Airways are excellent in terms of satisfying the needs and wants of the buyers. It has a fleet size of more than two hundred and ninety five that provide first-rate services to all its patrons. The British Airways tries to satisfy all the requirements of its customers.
Firstly, it provides the flight tickets at a reasonable price to satisfy their want of flying from one destination to another. Secondly, the Airway is connected to some of the busiest airports of the world and it provides excellent scheduled flights to all its destinations. Thirdly, the Airways tends to provide all its customers the best possible in-flight services in terms of comfortable seats that have previously been allocated to them, hot and fresh meals, drinks and even entertainment on board.
The customers can go through the magazines provided by the staff or can choose other form of entertainment like the movie collection, radio channels and even television programs. The British Airways has gone out of its way to deliver some superb support facilities. In order to cater to the needs of different sections of customers it has divided its services in three diverse executive classes. The customers belonging to the gold executive class and the silver class can avail themselves to the executive lounges that are found in almost all the important airports of the world. Here they can spend some quality time relaxing and even eat, shower and visit the airport gym.
Place in the Marketing mix of British airways
Place plays a very important and distinctive role in any marketing strategy. The British Airways recognizes this truth and has always been dedicated towards mergers and liaisons with most of the important destinations of the world. As the base of the company is United Kingdom, it carries on most of the day-to-day activities in and around its operational base.
The company has successfully developed and upgraded infrastructure to conduct safe and proper activities. The British Airways has joined hands with various other airport authorities for carrying out their business activities successfully. They have their own warehouses and sometimes warehouses in coalition with other companies for carrier purposes and for servicing their aircrafts.
Their main channel of distribution of the products is through the call centres, the online websites and the travel agents. The Airways also emphasizes on easy accessibility of all their locations for smooth and fast transactions. British Airways is one of the most popular airlines to fly through six continents of the globe serving nearly one hundred and sixty destinations. This also comprises the six domestic destinations.
Price in the Marketing mix of British Airways
The British Airways has shrewdly kept its pricing policy such that every class of people can avail themselves of its services. They have tried to maintain a policy of pricing that equals to the value provided by the company. The strategy of the company is such that the customers are the decision makers and it is they who decide about the total amount to be spent. A customer can buy a ticket at its base price without any extra value added benefits or can even choose the different services that he requires.
The Economy pricing strategy is for people who want low priced tickets. The medium-value pricingstrategy is for people who require some of the fringe benefits and the Premium pricing strategy is for people who like to travel with all the high-class benefits provided by the airlines. This method of splitting their pricing policies has helped the British Airways in maintaining their high standards and creating profits at such competitive times. The Airways keeps on revising its pricing policies against all its competitors so that they can maintain their loyal customers. Their method of pricing the tickets at the perceived value has proved to be a success story.
Promotions in the Marketing mix of British airways
Considerable innovation has been put towards creating and maintaining promotional strategies. In order to keep the communicative lines open with all its customers, different strategies have been formed. A mobile application is created for the special airline customers allowing them to make reservations easily and to get fringe benefits. In order to promote the services of the airlines, the help of the internet has been taken as the techno-savvy customers can save their time while booking tickets through net.
As a part of their promotional strategy, British Airways has been providing special flight tickets at reasonable prices for special occasions. Tickets by the name of “Christmas gift vouchers” are one such scheme where the customers can travel to certain places at very reasonable and discounted prices.
In order to cash the off-season market the company tends to offer discounted prices to its customers. For the promotion of the company and its products and various services, British Airways has taken the help of electronic and print media. Television channels, internet, magazines, billboards are different promotional routes of the company where active and catchy advertisements have helped in maintain as well as creating a customer base.
Sponsoring events has also been a part of their promotional strategy as a healthy awareness about the company and its services can be generated here. Some of the celebrities like Aditya Zutshi and golfer Justin Rose have been part of the company as their brand ambassadors. British Airways has become a synonym for luxurious and reliable airlines that is dedicated to provide safe and prompt travels.