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The Risk Factors Affecting British Airways Groups Marketing

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 Using information from the given Annual report and other relevant sources, briefly discuss the risk factors that could adversely affect British Airways Groups market position and revenue.

Generally, the Airline industry is very highly regulated, competitive and demand for air travel is predicted to grow. The airline industry is exposed to number of risks, through operational complexity, highly competitive and regulated environments. There are also some risks outside the airlines industry controls such as government regulation, adverse weather, political and economic environment, fuel prices and foreign exchange. But airlines will have to contend with these risks, many of which continue to emerge and evolve, in order to keep up and stay profitable.

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The risk factors affecting British Airways Groups marketing position and revenue, with reference to the 2018 annual report and account, are illustrated below: 

the Unpredictability surrounding the cost of oil and oil-based goods can materially affect the Group’s working outcomes. This is an issue that is supported through the acquisition of oil subsidiaries in forward business sectors. The goal of the supporting system is to expand the consistency of incomes and gainfulness.

Competition: BA operates in highly competitive markets. It is important to operate in a cost-effective manner, as this could materially impact revenue.

Consolidation and deregulation: Government deregulation has made acquisitions of weakened competitors easier but strict, which as lead to opportunities to capture market share and expand the Group.

Digital disruption: digital equipment can be used more competently by new businesses in the travel industry or by competitors, which can disturb British Airways business portal. innovation disruptors may utilize instruments to situate themselves between our brands and our clients. BA’s emphasis on the client, together with its misuse of advanced innovation, decreases the effect computerised disrupters can have.

Government intervention: Operational and financial performance will be affected by Government intervention with excessive taxes or increases in regulation.

Infrastructure constraints: BA is dependent on and may be affected by infrastructure decisions or changes in policy by governments, regulators or other entities which impact our operations but are outside of the Group’s control. London Heathrow has no spare runway capacity. In October 2016, the UK government confirmed a third runway expansion proposal at Heathrow and IAG has been actively involved in ensuring that a cost effective, fit for purpose solution is developed.

Joint businesses: BA is in partnership with other airlines, on some specific routes, sharing flights and revenue. Strong governance and financial controls are practiced, to avoid loss in revenue and branding.

Cyberattack and data protection: The Group could face financial loss, disruption or damage to brand reputation arising from an attack on our systems by criminals, terrorists or foreign governments. If we do not adequately protect our customer and employee data, we could breach regulation and face penalties and loss of customer trust.

Event causing significant network disruption: Even like industrial action, war, civil unrest or terrorism, adverse weather conditions or pandemic will affect operations and cost associated with disruption.

Failure of critical suppliers: will cause problems with operations and revenue. Failure of a critical IT system: Failure of a key system will cause significant disruption to operations and result in lost revenue.

Safety and security incidents: the protection and safekeeping of British Airways employees and customers is very important to British airways values. performance of the monetary can be affected if any failures occur that prevents their security or safety policies to be carried out effectively. If there is ever an incident regarding this the Crisis Management Centre would have to respond in a way that is set out to be structural.

Foreign exchange and slow-moving cash: The Group is presented to money chance on income, buys and borrowings in remote monetary forms alongside money degrading of money held in monetary forms other than the aircraft’s nearby cash (sterling). This hazard is limited by holding money in sterling at every possible opportunity however trade controls in certain business sectors will occasionally postpone transformation and repatriation of assets. When there are delays in the repatriation of money combined with the danger of depreciation, chance is moderated by the survey of business arrangement for the course.

Non-compliance with key regulations including competition, bribery, corruption and sanctions laws: The Group is exposed to the risk of individual employees’ or groups of employees’ unethical behaviour resulting in fines or losses to the Group. The Group has clear frameworks in place including comprehensive Group-wide policies designed to ensure compliance. There are mandatory training programmes in place to educate employees in these matters. Compliance professionals specialising in Competition Law and Anti-Bribery legislation support and advise our businesses.

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