Passenger Statistics and Hub

Discuss about the Impact of Political Economic Uncertainty on Tourism.

The British Airways (BA) transports greater than 145,000 customers daily and 40 million travellers each year (British Airways, British Airways Factsheet, 2018). Numbers of passengers from the year 2013 to 2017 were (Statista, Number of passengers uplifted by British Airways Plc in the United Kingdom (UK) from 2008 to 2016, 2015) :

Year	Number of Passengers
2013 Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	38,412,127
2014	39,643,245
2015	41,255,582
2016	42,141,258
2017	45,200,000 (approx.)

(Statista, Number of passengers travelling with British Airways from 2010* to 2017, 2018)

BA’s primary hub is Heathrow Airport in London. 80% of BA flight are either initiated or destined here (Ashworth & Forsyth, 2016). It flies to destinations over 200 in 75 countries around the world. BA covers the following destinations across the world from London (British Airways, Where We Fly, 2018):

Places	Number of Destinations
Europe, UK and Ireland	121
North America	29
Latin America and Caribbean	19
Middle East and Africa	21
Central and South Asia	6
Far East and Australia	9

In every 90 seconds, there is one British Airline taking off somewhere around the globe. It has a fleet of over 280 aircrafts (British Airways, British Airways Factsheet, 2018).

BA provides food and beverages facilities on-board (British Airways, Product and Service, 2018). BA provides the facilities of on-board Wi-Fi, duty free on-board High Life Shop, High Life Entertainment plans and High Life magazines for adults. Also, there are various Skyflyers Kid’s Zones available for kids (British Airways, Entertainment, 2018). There is BA app available which makes the handling easy including the bookings, boarding, seating plans, on-board facilities and others. There is disability assistance available for mobility as well as for assistance dogs. Travel assistance includes assistance for children travelling alone, pets, medical conditions and others (British Airways, Information, 2018).

BA has its primary base in London Heathrow airport. It also operates from the Gatwick Airport in London. It provides facilities of ATMs, baby care, bag wrapping, baggage storage, bars, cafes, restaurants, cell phone rentals, Chapel, currency exchange counters, duty free shopping, fast track services, gifts and souvenirs. It also provides hotel reservations and transportation, internet and Wi-Fi, lost property services, charging points, medical care and emergency rooms, lounges, porter services, play area for kids, baby facilities, postal and premium services, showers, smoking areas, VIP services, fitness and wealth.

BA provides high-end facilities and all its customers. There is a wide range of aircrafts and airbuses along with multiple travel classes to attract the different segments of customers. It provides free food in all long distance travels. The flight information, seating and baggage details are easy to access through the BA app. British Airways provides the facility to book hotels and rent cars along with the tickets for all its destinations. It provides the facility to book multi-centre holidays (with provides extensive information about the destinations) and provides various options for the same (British Airways, Multi-Centre Holidays, 2018). Options include City Breaks, Winter Sun, Beach holidays, Luxury holidays, Villa holidays, Fly-drive holidays, Spa Breaks, Romantic getaways, Sea holidays, Golf holidays, Theme Park holidays and many others (British Airways, Holiday types, 2018).

Services and Facilities

Increase in the prices of fuel increases the cost of airline industry. It amounts to 35% of the total cost of the airlines company. It thereafter increases the costs for the travellers as fuel surcharges. Given the level of competition, BA cannot increase the prices much else the market share will fall (Fedorco & Hospodka, 2013). In 2015, the price of airlines fell due to the low costs of fuel and it therefore increased the demand by passengers (MacDonald, 2017).

Current fuel prices have been declining recently. Consumers protested for reduction in the prices of the airline tickets. This has persuaded the airline industry to cut down its fuel surcharges and ticket prices (Sawer, 2017).

A new airline called Level has been introduced by International Airlines Group (IAG). It is based out of Barcelona, Spain and was launched in March 2017. It is expected to be a stylish and modern, long haul and low-cost carrier. It will operate between and Europe and places across Atlantic, with new Airbus A330 jets.

• The market of airlines is not perfect. The capital requirement inn airlines industry is high. Lack of distribution channels and many legal barriers restrict the entry of new firms.
• There is no threat from substitutes since the alternatives like railways and waterways are neither effective nor efficient means of transport for long distances travelling in short time.
• Bargaining power of the consumers is moderate because of no close substitutes and high level of competition from other airlines.
• Bargaining power of suppliers is high because there are no alternatives available for fuel used. Also, the suppliers of aircraft are few and hence, pose a threat to British Airways.
• There is high level of competition from the rivalries both at local and international levels. There is competition in terms of prices, services, convenience and quality. Its competitors include Virgin Atlantic and American Carriers.

BA faced an IT failure in May 2017 which resulted in loss of £100 million approximately. It impacted 75,000 passengers in 170 airports of around 70 countries. The failure happened due to crash down of Amadeus software due to power surge. It prevented the flight take off and passenger check-in. The software involved passenger bookings and transactions along with flight information. This also worried the customers about their flight safety and security (HarperJames, 2017).

BA targets a large segment of the population by providing various service packages including economy class, premium economy, executive club and first class. This helps British Airways to increase its market share. It can be illustrated as follows (Dudovskiy, 2016):

Targeted Segment
Segmentation Basis	Economy Class	Premium Economy	Executive Club	First Class
Gender	Males and Females
Education Level	Bachelors and High School Students	Technical Bachelors	Professionals and Businessmen	Professionals and Businessmen
Income Level	Low Level	Middle Level	High Level	High Level
Status	Lower and Middle Class People	Lower and Middle Class People	Upper Class People	Upper Class People

People can be classified under three categories based on the lifestyles. These include (Dudovskiy, 2016):

Targeted Segment
Segmentation Basis	Economy Class	Premium Economy	Executive Club	First Class
Lifestyle	Moderate oriented lifestyle	Moderate oriented lifestyle	Achievement oriented lifestyle	Achievement oriented lifestyle

People who travel frequently prefer economy class while the business class prefers executive or fist class tickets (Dudovskiy, 2016).

Targeted Segment
Segmentation Basis	Economy Class	Premium Economy	Executive Club	First Class
Purpose of Visit	Regular Trips	Recreational Purpose	Business Trips	Business Trips and Honeymoons

Targeted Segment
Segmentation Basis	Economy Class	Premium Economy	Executive Club	First Class
Season	Regular Trips	Vacations	Business Trips	Business Trips and Honeymoons

Targeted Segment
Segmentation Basis	Economy Class	Premium Economy	Executive Club	First Class
Types of Travellers	Easy going, indifferent, Regular Travellers	Easy going, indifferent positive regular travellers	Determined, positive enthusiasts, luxury convenience oriented (first time/ regular)	Ambitious, enthusiasts, luxury-oriented (first time/ regular)

Sustainable development approach aims to secure present along with the concerns for the future generations. It tries to manage stability among the economic, social and environmental objectives. Aviation in specific aims to provide secure and efficient means of transport in the global economy for the social and economic development (International Civil Aviation Organization, 2012).

BA conducts many CSR activities for its sustainable development to establish responsible and sustainable communities. It tries to promote well-being and inclusion. It operates in the business with responsibility. BA tries to reduce the negative environmental impacts of aviation industry along with waste reduction and improvement in recycling (British Airways, Corporate Responsibility, 2018).

Multi-Centre Holidays

Business stability approach is important in all businesses. It helps to concentrate on one particular line or product to better the performance (Riahia & Moharrampour, 2016). It brings stability in growth of British Airways. Stability helps British Airways to provide efficient and effective services to the society. It brings specialisation and increases the market share.

This approach minimises the risk for British Airways. It helps to bring out satisfactory performance from any interpose. The strategy is often adopted by the firms with functional improvement scope. This can be done through better resource allocation and their utilisation. This is beneficial in case of unstable market conditions.

It is an approach by BA in tie up with Comic Relief UK. It helps to uplift the children facing challenging lives in UK and around the globe. This is achieved through lavish donations made by the clients and fundraising events by colleagues. Flying Start raises funds for kid’s projects in the destinations BA flies to (British Airways, Corporate Responsibility, 2018)

The most important concern for the aviation industry is the climate change. British Airways aims to find alternatives to reduce or eliminate emissions associated with the aviation. Their main focus lies on:

• To discover alternative fuels with lower carbon emissions(Gössling & Upham, 2012)
• Initiatives for emission-saving
• The projects for environment are backed by customer donations
• Positive support for suitable government regulations.

Detailed reports of climate and emissions are provided by the parent company of IAG. It is disclose in the Carbon Disclosure Project (CDP). British Airways lies in Climate ‘A’ (CDP) of the topmost 5 per cent of global enterprises. It is the single commercial airlines group in the Climate ‘A’ (British Airways, Corporate Responsibility, 2018).

British Airways commits to provide environment friendly services to the society. It also aims to conduct business responsibly. It commits to:

• Comply with legal requirements concerning the environment and all other obligations management
• Tries to eliminate the pollution wherever possible or reduce it as low as practical
• Preserve the natural surroundings
• Constantly improvising and improving its environmental managementsystem and the overall performance in the environment

Environment management system is used to set corporate goals and objectives which relate to environment concerns and impacts:

• Improved management in risks relating to the environment
• Reduce per person carbon emissions by new aircrafts, fuel and tugs(Hermes, 2017)
• Noise reduction per flight
• Minimise the waste(British Airways, Corporate Responsibility Report 2010-2011, 2011)
• Reducing landfill disposal
• Promote re-use and recycling(British Airways, Corporate Responsibility, 2018)

British Airways is the first airline which participates in trading of carbon in 2002 and has been constantly campaigning for the same policy ever since. In collaboration with the government and the other associations in the aviation, BA helped develop the first system of global carbon pricing named CORSIA. This requires the airlines to purchase carbon offsets to compensate for the increase in carbon dioxide emissions. This initiate is to collectively ensure carbon neutral growth achievement from the year 2020. Carbon offsets are achieved through the application of carbon reduction projects, often in the case of the developing countries (British Airways, Corporate Responsibility, 2018).

Marketing strategy for British Airways involves a mix of product, price, place and promotion. BA has strategies for product, pricing and promotion.

Sustainable Development Approach

Product strategy is concerned with the air carrier facility in case of BA. There are a wide range of aircrafts available with British Airways. It also provides many other services. There are different ticket classes (executive, business club and economy) for different customers. It provides tickets, aircrafts and complimentary services like meals, beverages and others.

Pricing strategy is based on the type of services availed by the customers. Price increases with the increase in quality of services (Sood, 2013). Pricing strategy can be of three types:

1. Premium price strategy: For high class customers with higher purchasing power (executive class and business class travellers).
2. Medium price strategy: For medium class customers with comparatively lesser purchasing power than premium class customers. This exists with the objective to compete with other firms in the industry.

• Low price strategy: This strategy aims to compete with low cost carriers in the business. BA provides added quality at lower price and brand value.

Pricing policies vary as per the demand conditions, prevailing costs, price of the competitors and the pricing method in use (Rodrigo, 2012).

Promotion strategy of British Airways involves various offers and schemes to increase its sales and reduce down the cost by economies of scale. There are different concessions and upgrades available for customers during different seasons and holidays (British Airways, Our strategy, 2010).

For example, there are various concessions provided at the time of Christmas and other national holidays. The ticket is often named as ‘British Airways Escape ticket’. BA slashes the ticket rates to a great extent. There are upgrades available for Gold and Silver class travellers on one way journeys. Also, there have been recent cuts in the prices of domestic flight tickets.

British Airways provides complimentary food on long journeys. The food and beverage quality is high at all times. There is wide range of options for the same. It also provides the facility to purchase duty free products during the journey. BA app helps to make the booking process easy and provides fringe benefits.

British Airways advertises through TV, social media and other platforms with catchy phrases to attract new customers as well as to maintain the existing ones. BA also sponsors various events as a part of promotional strategy (Bhasin, 2017 ).

British Airways slashes down the ticket prices of certain destinations to promote tourism in that particular place. There are lower rates available for lean season as well as during vacations. There are lower rates offered in case of pre bookings. This helps to promote the destination and increase the customer base. The tourism increases in the area along with the flourishing businesses.

British Airways has various packages and customisation of destinations available on the site. This not only increases the customer accessibility but also the destination attraction by beautiful pictures and activities offered. Hence, the brand is promoted by British Airways.

Business Stability Approach

Tourism increases the concern for preservation and sustainability of the biological diversity and natural resources of the destination. The ecosystem are taken care of and maintained. It has positive impact on both natural and artificially-constructed environments. It also increases the environmental awareness among the people (Rad & Aghajani, 2010).

The direct impact of tourism on environment includes the increased consumption of resources like water energy and fuel. The air and water quality degrades with the increase in tourism alters and fragments the natural habitat and the ecosystem. There are huge impacts on the flora and fauna of the region. Wildlife is often disturbed. There are other cultural impacts which diminish the aesthetic value of the region or destination. The visual and architectural pollution is increased to cater to the tourism needs. Gateway communities of the region are also impacted adversely and often uprooted from their habitats (Rabbany, Afrin, Rahman, Islam, & Hoque, 2013).

Tourism is one of the major sources of income, especially in case of developing countries. They are heavily dependent on tourism for the growth of the economy. Thus, the economic crisis impacts the employment rates and the income opportunities. The livelihoods of the vulnerable class, whose major source of income is tourism industry, are hugely impacted by the economic crisis (UNWTO & ILO, 2013). The unemployment rate of the tourism-oriented countries increases at the time of economic crisis. Unemployment has a negative impact on the mental as well as emotional well-being of the person. Unemployment eventually increases the number of homeless persons in the country. Tourism is also a great influencer in the socio-economic development (Haque, 2015).

The tourism is used by the governments as a mean to achieve political objectives. Political opinion influences the travellers decision positively also. Favourable political situation and policies can increase the tourism in the world.

Countries undergoing political turmoil discourage the tourists from travelling to that particular country (Bilbil, 2015). Radical changes occurring in the politics of a nation make the tourists feel insecure. Political unrest or changes in the policies affect the level of tourism through the various restrictions and tax structure. Political changes in the domestic country of the traveller also influence the level of tourism. Often the government restrict its citizens from travelling to a particular country because political tension between the two. Politics also mould the public opinion about the country (Abahre & Raddad, 2016).

Technology plays an important role in the industry of tourism. It has moved the world from booking agents to ticket and hotel booking apps (Atembe, 2015). It has made travelling a lot easier, both in terms of communication and accessibility. It has helped to discover new places of interest and spread the awareness. Presently, social media influences the people to travel more than earlier times by providing attractive advertisements and numerous options (Tourism Embassy, 2013). It also helps to compare destinations, places, hotels, restaurants and more at a single page. Reservations and booking are just a cell phone away (Jadhav & Mundhe, 2011). It has reduced the risk of travelling with a lot of money by pre-paid transactions. Vertical portal developments have improved the travel business. Changes in the itinerary are easier with the advanced technology. The navigation is a saviour for people who chose to drive or travel on their own.

Flying Start – CSR Activity

On the other hand, technology has increased the hotel and transportation prices as the Wi-Fi, internet and other facility charges with less personalised services. Sometimes, there are other fees associated with the online payments which may not be necessary otherwise. Also, many people are not quite convinced with the level of technology at disposal.

Safety and security is vital in tourism business. A tourism destination’s success and failure depends majorly on the safety and security of the travellers. It is vital to have secure environment for travellers in a nation to increase the tourism (Kôvári & Zimányi, 2011). Safety in tourism is directly proportional to the level of tourism in the country. It is one of the five global forces which determine the tourism level. Destinations which are vulnerable to robbery, theft, physical abuse, assault and rape have lower level of tourism in comparison to other nations (Payam, 2016). Safety and security increases the quality of tourism in the country. It gives a positive impact to the travellers across the world. A country with low level of tourism safety increases its opportunity cost of income generated from tourism.

Tourism being dynamic requires a separate organisation of the government. There should be restrictions on entry in the preserved areas of both natural habitats as well as architectural structures (Aall, 2014). There should be strict laws and guidelines for the waste disposal by the firms involved in tourism (Maxim, Sustainable tourism implementation in urban areas:, 2015). Strict fines must be levied in case of misconduct and defiance of the laws. Habits must be inculcated in the masses regarding the cleanliness in the areas. There should be commission for grievances and issues faced by both the immigrants and the local masses.

Economic policies must be stable and managed with fair means (Ismet & Abuhjeeleh, 2016). Economic crisis must be avoided. Government needs to advertise about the natural landscapes, architectural marvels, rich culture and traditions. It must improve international relations to increase the tourism in the country. Safety measures must be taken by the government to provide safe and sound tourism experience to all its immigrants. On the other hand, local masses must be encouraged to help the tourist and not exploit them in any form.

Also, the government needs to encourage non-profit organisations in the conservation of historical places and natural habitats.

Hospitality industry experts play an important role in influencing the whole tourism business. It is important to improve as well as sustain the level of environment (Maxim, Journal of Sustainable Tourism, 2016). Waste disposal must be taken care of. It is of utmost importance to conserve the environment. Hospitality industry must incorporate and advertise about the culture and traditions along with the natural and architectural wonders of the country. They need to focus on the security of the tourists at all levels. Technology must be incorporated to make the travelling experience easier (Jackson, 2017). Various offers and schemes can be used to attract the tourists at the time of financial crisis.

Carbon Offset and Environmental Management System

Tourism is vital for economy’s growth. This further improves the lifestyle of the local people by increasing their levels of income. There is increase in employment and entrepreneurship opportunities. The growth is sustainable only when steps are taken to preserve the environment. It the measures are not taken, the tourism and travel industry will clash along with other small businesses which were in boost due to the tourism. Technology advancements can further lift the industry by making the bookings, transportation and information accessibility easier. It is important to make the guests comfortable and safe. The ethnicity, traditions and natural environment must be nurtured and groomed to promote the industry. The crime rates must be kept in check and strict actions must be taken in case of adversities.

The staff for the monuments and other tourist places must be increased to keep them clean. There should be restoration programs for the historical sites. Fines for misbehaviour must be levied so that the people follow the rules. There should be research and development by the firms in hospitality, aviation and other tourism services to minimise the pollution level and the environment degradation. There can be research conducted for the tourists. A feedback form can be given to them at the airports or in the flight. Issues faced by them must be addressed and improved. International relations must be improved. Politics and policies must be favourable in terms of tourism.

Conclusion

Aviation industry has increased the tourism by providing travelling at cheap prices which has increased the affordability by the weaker sections. Tourism boosts up the small and local artisans and also employment. The process not only involves the tourists but the transportation industries, hospitality firms, local businesses and the residents.

Aviation industry is the backbone of the tourism business. It promotes and attracts global tourists and help in the economic growth of the country. Tourism as an industry increases the awareness regarding preservation and sustainability. British Airways has made the travelling simpler and easier. It promotes the local businesses and the destinations. Tourism not only enriches a person with the culture and traditions of a particular region but also provides an invaluable experience.

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