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Business Environment

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on 11 January 2014

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Transcript of Business Environment

Challenges that will
affect British Airways
in 2020 and 2050

Challenges facing British Airways
British Airways
Environmental
Global Warming and Climate Change

Consumers are becoming more ecologically conscious

Return flight from London to New York release approximately 1.2t of CO2 per passenger..

Aircraft Fuel efficiency improving, CO2 emissions increasing since
2006









Likely to reach 'peak oil' and consequently become more expensive

Increase fuel efficiency

Find alternatives




Health concerns

An outbreak of a health infectious disease

The swine flu pandemic in 2009 caused over 14,000 deaths and affected 171 countries

Pandemic continuity plans




2050
World population is set to reach 9 billion

India takes over China being the world most populous country

Will B.A be able to meet demands for capacity?
Social
Safety & Security challenges

Volcano eruption in Iceland in 2010

Develop resilient airvehicles to protect against major threats

Technology
Order of 12 airbus a380, will become the standard plane.
Replaces Boeing 747.
Move towards business class, as we grow out of the recession.
More efficient plane.
As the Airbus a380 is much quieter, less tax on noise pollution


A few prototypes of flying cars have been made.

In 8-10 years they could become a reality.

Could replace the car we know today.




Est. since 1919
To fly, To serve.
36,748 Employees in

2010
Fly to 145 destinations worldwide
Economical
Environmental

Social
Technological
To fly, To serve
How will the market stand in 2020 and 2050?


Market trends are continually changing

Economical
Economical
Competition
3 billion passengers carried in 2012 by world airlines.

Average fares has risen by 24% in 2 years

EasyJet and Ryanair compete on price, BA competes on quality

BA have offered a £10 discount for
passengers with just hand-luggage
2050
2020
2020
2020
2050

gov.uk
The Economist
ATAG Air Travel Action Group
IBM
Easyjet.com
Ryanair.com
britishairways.com
Renewable Energy Focus
National Position Paper- E.U. Report
IATA
References
2050
The European commission targets having less than 1 Air vehicle accident per 10 million

Europe's vision for safety is to greatly reduce human error within airline operations


By 2026 aviation contribute $1 trillion to world GDP
In 2009 79% global travelers reported greater use of conference
calls. Since 2010 Asia-Pacific video conferencing market grown
by 9.5% a year.

Thank you for listening, we will now take any questions.
Conclusion
Economical: Although BA does not diversify themselves on price, they separate themselves on quality.

Social: BA should prioritise safety, security and health issues and how they will develop up to 2020 and 2050.

Environmental: BA already takes the environment into consideration and will continue to do so.

Technological: BA have many technologies to keep up with in the near future and will need to differentiate themselves.
Profitability revenue up 8.4% to £10,827 million
From 2011 to 2012. But losses of £816 million

References: The economist; ATAG; ba.com, easyjet.com; ryanair.com
References
ATAG
IATA
“What’s Next for Travel Management?” Association of Corporate Travel Executives.
June 23, 2009.
“Frost & Sullivan: Asia-Pacific Video Conferencing Market to Grow Strongly as Enterprise Spending Recovers.”

In 2050 aviation will fly 16billion passengers
2020
References
ETA- Green reliable travel insurance
BA Environmental Overview
The Guardian

What is the Economics of
Climate Change?
Nicholas Stern (2006)
World
Economics
Vol 7, No.2.
References
The Stern Review
Graph (on handouts) - Transport changes will make a difference

Mid-to-late century temperature rises - up to 6 degrees!

Impacts on food production, access to water


Technology

Fusion power, is the fusing of 2 atoms, this creates infinite amounts energy, which can be used for fuel on planes, making fuel bills decrease. Reducing the amount of fossil fuels being used.

May lead to more development in plane technology, as engines may need to be structured differently.
References:
Graeber, D. (2012). Of Flying Cars and the Declining Rate of Profit. The Baffler, 1-22.
www.bbc.co.uk
www.ccfe.ac.uk
References:
Graeber, D. (2012). Of Flying Cars and the Declining Rate of Profit. The Baffler, 1-22.
www.airbus.com
The Flying Car
Fusion Energy
Airbus A380
Graeber, D. (2012). Of Flying Cars and the Declining Rate of Profit. The Baffler, 1-22.
www.airbus.com
ETA
Telegraph
Bbc.co.uk
Dh.gov.uk
www.ccfe.ac.uk
INED world demographics
The Guardian

Social
References: European commissions – Flight path 2050 report
The Guardian, 'BA volcanic ash losing money', 19/04/2010
The economist, 2011, air accidents.

References The economist, "BA and their swine-flu response, July 2009
INED, World population demographics
"British Airways report and accounts for period ending in December 2012",
Rhianna Holt, Phoebe Skinner, Catalina Uribe Farfan, Louise O'Brien
Full transcript