Value delivery and operations management at British Airways during economic uncertainty

¶ … Value: Improving Operations Management at British Airways plc in the current economic climate

Delivering Value: Improving Operations Management at British Airways Plc. In the Current Economic Climate

The current business climate is extremely dynamic and challenging for the modern entrepreneur in the meaning that it presents him with numerous tests of strength and ability. And it could even be argued that all is due to globalization. The phenomenon allowed organizations to transcend national boundaries and expand their operations within the global climate. Nevertheless, it also translated into a rapid pace of development, and the adjacent necessity of keeping up, intensifying competition and many more challenges.

The modern day managers develop and employ a wide series of strategies in order to answer to these challenges. They focus more on customer satisfaction, on employee empowerment or on product and service quality. They also strive to enhance operations management. The element can be defined as the control exerted over the processes through which a product or service is created. Operations managers decide the type and quantity of "equipment, labor, tools, facilities, materials, energy and information [that] should go into an operating system and how these inputs can best be obtained and used to satisfy the requirements of the market place. Managers are also responsible for critical activities such as quality management and control, capacity planning, materials management, purchasing and scheduling" (the Ohio State University, 2008).

Despite its sustained success, airline leader British Airways must also adjust to the requirements of the current climate. This report strives to assess the company's operations management characteristics and propose some courses of action for improvement. Before achieving this goal however, it is necessary to become familiar with the entity.

2. British Airways Plc.

British Airways is the largest airline operator in the United Kingdom, possessing the largest fleet (approximately 240 aircrafts, mainly Boeing and Airbus) and operating the most flights -- it offers flights to an estimated 150 destinations in 75 countries; through extensions with other international operations, it can serve next to 500 destinations. At a continental level, it is topped by Lufthansa and Air France-KLM. As of middle 2008 however, British Airways has engaged in merger conversations with Spain's number one flight operator Iberia. For 2008, it registered revenues of $17,454.4 million and employed an estimated 45,140 individuals worldwide (Hoovers, 2009).

The company's operations management practices include a wide series of actions, but the ones to be hereby presented refer to the strategies they implement relative to safety and security, the staff members, the impact on the environment or the competitive efforts.

In terms of safety precautions, these have been significantly intensified after the London attacks. On the one hand, the airline operator decided to only offer international flights from the two safest airports in the UK capital -- Heathrow and Gatwick. Overseas flights from other airports were cancelled. British Airways spends an estimated $165 million each year on security, on activities such as: "screening of flying crew and ground staff; participation with government and airport screening of passengers and cabin baggage; extra hand baggage and customer searches at the gate; baggage and passenger reconciliation; security controls for cargo, courier material, mail and catering; searches and guarding of aircraft; 100% x-ray screening of checked baggage worldwide" and so on (Official Website of British Airways, 2009).

Relative to their human resource, the managerial team at British Airways has comprehended the role played by the employees and strives to increase their levels of on the job satisfaction. Former chairman, Sir Colin Marshall, stated: "In an industry like ours, where there are no production lines, people are our most important asset and everything depends on how they work as part of a team. This means, to get the best results, managers have to care about how they (the employees) live and function, not just about how they work and produce" (Boyd, 2003, p.67). The primordial means by which the company is striving to increase employee satisfaction and commitment to the organization refer to the creation of a pleasant working environment that values diversity and promotes equality, and the offering of training programs (Official Website of British Airways, 2009).

However not traditionally perceived as components of an operations management effort, the relationship with the environment and the competitors is also important as it determines the company's ability to organize its actions in a means that offers an adequate response to the changes in the market and industry. In terms of environment, British Airways has a rather opaque policy and they have yet to implement measures which safeguard the well-being of the environment. Relative to the competition, the British operator strives to regain its strength through a merger with Iberia.

3. Recommendations for Improvement

Before presenting the recommendations for improving the operations management at British Airways, it is necessary to reveal some of the challenges presented by the modern day environment. This endeavor is necessary as the recommendations for improvement will be tailored to the need to satisfy the identified challenges. In this order of ideas, the difficulties raised by the current context include the following:

safety and security issues changing role of employees pollution, global warming and the general impact on the environment intensifying competition

Safety and Security

This threat has always been present within the airline industry, but never at levels as high as today. Flying used to be perceived as the safest means of transportation, but now, it is feared by many. This is generally due to the terrorist attacks of the past years. While the first thing that comes to mind is 9/11, Europe has also been a target of the Al-Qaeda terrorist, with attacks in London or Madrid terrorizing the nations. In this context, it is impending for British Airways to develop and implement more measures to ensure both employee as well as customer safety. The issue of employees' safety is also crucial in the meaning that people fear to do their jobs. Actions in the direction of increasing the levels of safety and security include the hiring of more guards, offering of specialized training, the introduction of the most advanced technologies in airport security, such as face recognition and scanning devices and so on.

Employees

It has already been mention that the managerial team at British Airways cherishes the input of their human resource. Nonetheless, they should never consider that they have done everything to satisfy and motivate the staff members. In other words, they should recognize the changing features of employees, on the one hand due to personal characteristics, and on the other hand due to environmental forces. In this context, the leaders at the UK airline company should continually strive to motivate their human resource. This could be achieved through the offering of more incentives, such as flexible working schedules, more training opportunities, promotion opportunities, employee empowerment and so on.

Impact on the environment

In this context of a growing threat of global warming, airline operators are perceived as great pollutants; which in fact they are (Solon, 2004). Given this situation, it would be useful for British Airways to invest more in research and development and as such sustain private and public efforts of developing and integrating fuel efficient engines, as well as discovering alternative sources of fuel. The European Union is already working on legislation to decrease the emissions of airplanes into the atmosphere, meaning that the ability of British Airways and other airline operators to work on high levels of pollution is going to suffer reductions (Airline Information Industry, 2005).