Business operations of American airlines and British airways Essay

Business operations of American airlines and British airways - Essay Example Airlines today operate in a competitive global environment, where every minute there are thousands of take-offs and landings across the world. International airlines like British Airways and American Airlines, which have dominated the skies for many decades now, operate with minimum possible margins, use innovative measures to keep their competitive edge over others, manage operations with hectic minute to minute schedules, somehow retain their trained manpower in this expanding aviation sector and still stay afloat to perform better in the next year. All these aspects require herculean efforts from the HR, operations and executive management where one adverse report or an accident/incident can permanently damage to the reputation of an airline and throw it off the markets in matter of months. American Airlines, the world’s largest airline is a fully owned subsidiary of AMR Corporation founded in 1934, based in Texas and operates a passenger airline within North America, the Caribbean, Latin America, Europe and Asia. With about 86,600 employees on its payroll, the airline covers 250 destinations and also operates air freight service. The AMR Company also connects America’s eight important cities to smaller destinations throughout the US, Canada, Mexico and the Caribbean through two subsidiaries with other names of American Eagle and American Connection. As on Dec 06, AMR’s fleet included 697 American Airlines aircraft and 306 American Eagle aircraft. AMR Company with over 4000 daily flights contributes $ 150 billion to US economy and holds 17.8% market share. In 2006, the airline carried over 98 million passengers. On an average day, American Airlines alone will:1 Fly about 270,000 passengers Receive more than 220,000 reservations calls. Handle more than 344,000 pieces of luggage. American's award winning website provides customers with all possible facilities at the click of a button including online reservations, news, destination information and assistance, connections with other airlines and various other offers. Financial Position: Year Revenue Profit/Loss 2006 $22.56 billion $231 million 2005 $20.71 billion - $861 million 2004 $18.65 billion - $761 million 2003 $17.44 billion - $1.23 billion 2002 $17.30 billion - $3.51 billion 2 AIRLINE PROFILE - BRITISH AIRWAYS British Airways is the leading international airline from the United Kingdom, and one of the largest airlines with a great reputation in the market. The airlines has its bases at Heathrow and Gatwick, London, and the airline is the flag carrier of the UK. With about 48070 employees on the payroll, the Company also operates a worldwide air cargo business along with its scheduled passenger services. As in Mar 07, the company operates to about 147 destinations in 75 countries and carried over 33 million passengers during previous year. BA has holdings in many international airlines and business partnerships with many other airlines from various countries creating 'Oneworld' alliance. It aims to be a transnational airline. Financial Performance:3 Year 2006 2005 2004 2001 2000 Net Operating revenues* 7,813 7,560 7,688 8,340 9,278 Net Profit* 251 130 72 -142 114 * in million(s) of Pound Sales per Geographical Area United Kingdom 49 Europe: 63% Americas: 20% Rest of the World: 17% Areas data as of 31/03/2007 Considering importance of new technologies available for consumers at the click of a button, BA also has a well developed internet site offering various attractive services to its customers besides online reservations. IMPACT OF LIBERALIZED ECONOMY AND AVIATION SECTOR Recently, a study was conducted to study impact of liberalization of economy and aviation sectors on the airlines performance which came out with astounding results.