This document discusses stakeholder theory and its impact on British Airways (BA). It identifies BA's key stakeholders as customers, employees, competitors, suppliers, media, financial institutions, shareholders, local communities, government/regulations, and environmental issues. It then analyzes BA's relationships with each stakeholder group and how they influence the company. The document also describes a successful campaign BA launched called "Terminal 5 is Working" to improve its image after issues arose from opening a new terminal.

1. Page 1Classification: Restricted
Business Analysis
Training
Case Study - Stakeholder theory and its
impact on British Airways.

2. Page 2Classification: Restricted
Agenda
• Why is knowing your stakeholders important?
• BA Stakeholders
• Stakeholder Relationships
• BA is for a two-way communication

3. 3
Stakeholder theory and its
impact on British Airways.

4. Why is knowing your
stakeholders important?
 The stakeholder relationship model explains
what the connections between the organisation
and its stakeholders are, and to what extent
they influence each other. Good knowledge of
the groups involved and understanding of the
stakeholders can help the company raise its
profile.
4
BA has a great
number of
different
stakeholder
groups, only 10 of
them are
considered the

5. BAStakeholders
5
Government
/Regulations
Local
Communitie
s
Shareholder
s
Environment
al
Issues
Employee
s
Competitors
Financial
Institution
s
Suppliers
Media
Customer
s

6. Stakeholder Relationships
Customers
Although customers
are the source of
profit for the company
they have little impact
on how the company
is managed.
BA wants to keep
the existing
customers and aims
to attract new and
younger audience.
6

7. Stakeholder Relationships cont.
Employees
Employees in BA have
the power of influencing
the customers.
The cuts the company
has to make, however,
result in employee
dissatisfaction.
The cabin crew staff
have been addressing
their demands through
strikes several times.
This means that
employees and
management do not have
strong relationships.
The “Front face” of BA is
heavily unionised.
7

8. Stakeholder Relationships cont.
Competitors
 BA is the largest UK
airline by turnover
with £8.99bn(yr
ending 31st March
2009), followed by
easyJet(£2.69bn) and
Virgin
Atlantic(£2.24bn)
 Although BA is the
market leader, the
low-cost airlines can
affect the decisions 8

9. Stakeholder Relationships cont.
Suppliers
Boeing and Airbus
are the main BA
suppliers. They have
high interest and big
impact on the
company and vice
versa. BA has only
one fuel supplier
meaning it also has
power over the
decisions made by
9
British Airways also depends on
online travel agents such as
cheapflights.co.uk,
expedia.co.uk, lastminute.co.uk
etc. People often buy from such
websites since they are
convenient and often provide
cheaper deals.

10. Stakeholder Relationships cont.
Media
The media has a
great impact on the
image of the
company, especially
covering the cabin
crew strikes.
BA is trying to keep a
good relationship with
the media in order to
have good relations
with its publics 10

11. Stakeholder Relationships cont.
Financial institutions
Financial institutions
have both high impact
and interest in BA.
They can refuse or
grant funding.
The need of funding
depends on BA’s
gearing ratio and
liquidity.
11

12. Stakeholder Relationships cont.
Shareholders
Strong relationship
with the shareholders
is very important.
They have high
interest in the
financial success of
the company.
Shareholders must
be enquired before
making big decisions
such as changing a
board member and
authorising new 12

13. Stakeholder Relationships cont.
Local communities
BA is trying to be a
good corporate
citizen with lowering
the carbon footprint
and having a
satisfying
relationship with the
local communities.
It presents itself as
a socially
responsible
company. 13

14. Stakeholder Relationships cont.
Government/Regulations
The sector has a
wide range of
legislation:
European,
Domestic and
International
These regulations can
have a high impact on
the whole industry but
they are not tailored
especially to the
Due to bilateral
agreements
between countries,
some carriers
cannot operate on
specific routes.
14

15. Stakeholder Relationships cont.
Environmental Issues
Unfavourable
weather conditions
such as the volcanic
ash cloud can have
a great impact on all
BA’s operations.
BA, like most major
airlines, has
promised to reduce
its CO2 emissions,
waste, noise and air
pollution. 15

16. BA is for a two-way
communication
 Back in the 1996 BA realises the need of
feedback and two-way communication
with its customers.
◦ Mailing lists
 Many campaigns followed with different
objectives of using those mailing lists –
not only for feedback, but for increasing
ROI as well.
◦ e-Dialog campaign aiming at contacting
travellers who have just returned from a trip
and inspiring a new purchase while still in
post-holiday mood.
16

17. BAis in for a two-way communication co
 British Airways realising the power of
social media and interaction with the
brand, has created Metrotwin – an online
community bringing London and New
York together. A place where people
recommend and discuss places of
interest in the two cities.
 The specific aim of this platform is to
reach younger audiences and provide
added value.
 Another platform where BA is getting in
touch with its customers is Twitter – lively
discussions on routes and promotions as
well as problem-solving team on hand. 17

18. 18
Terminal 5 is working – a successful British Airways Campaign

19. "Terminal 5 is working“
Situation Analysis:
In March 2008 Heathrow opens a new terminal which is
considered the new home for British Airways. Its first 48
hours of operation were not successful. There were lost
suitcases, slow processing and angry passengers. In order
to show customers that all of these issues have been
resolved, BA decides to make a communications campaign.
The campaign:
It focuses on issues such as the length of time it takes
customers to get through security, flight punctuality,
baggage arrival times and other services that were reported
as unsatisfactory.
Objectives:
The unsuccessful launch of the new terminal had to be
followed by some image management in order to bring
back the value BA had for its customers. The main
objective being responding to the negative opinions of the
travelling public. 19

20. "Terminal 5 is working“ cont.
Strategy and plan:
◦ Launching a dedicated website where
passengers share their T5 experience
◦ Taking actual pictures of travellers and
making billboards with facts from their
journey such as length of time, punctuality
of arrival, etc.
◦ Gathering information about travellers
every day and creating adverts for the
newspapers to print the next day.
20

21. "Terminal 5 is working“ cont.
Measurement and evaluation:
o A survey conducted by the company in
August 2008 shows that 82% of the
travelers rated the terminal “very highly”.
o The campaign made passengers aware
of 96 check-in kiosks, 140 customer
service desks and 90 “fast bag drops”
where the check-in is completed for
about ten minutes.
o BA cleared their image and proved itself
as a innovative and customer-orientated
company.
21

22. "Terminal 5 is working“ cont.
The Success
The “Terminal 5 is working” campaign was a
success because it was an honest way to show
travellers that despite the rough start, BA is
working towards making the flying experience
more convenient and satisfactory.
The success also relies in the good
communication between BA Marketing department
and the creative agencies which helped
implementing the idea.
 The campaign won several awards, including Best Poster
Campaign, Best Consumer Advertising Campaign and
Advertising Campaign of the Year.
22

23. References
 L‟Etang, J and Pieczka, M (2006) Public Relations, Critical Debates
and Contemporary Practice Lawrence Erlbaum
 Key Note., 2010. Airlines Market Report. , [Online] Available
at: http://0-www.keynote.co.uk.brum.beds.ac.uk/market-
intelligence/view/product/2388/airlines?highlight=airlines+2010&utm
_source=kn.reports.search# [Accessed on 24 Oct 2010].
 Sweney , M., 2008. Terminal 5 ads take off for BA. [Online] (Updated
25 Sept) Avaiable
at:http://www.guardian.co.uk/media/2008/sep/25/advertising.britishai
rways [Accessed 23 Oct 2010].
 Williams , E., 2008. Terminal 5 Is Working. [Online] (Updated 06
Aug) Avaiable at:http://www.creativereview.co.uk/cr-
blog/2008/august/terminal-5-is-working [Accessed 23 Oct 2010].
 Blyth, A., 2008. Terminal 5Six Months On. [Online] (Updated 25
Sept) Avaiable
at:http://prweek.com/uk/news/search/848962/Terminal-5-six-
months/ [Accessed 23 Oct 2010].
 http://www.britishairways.com/ [Accessed 23 Oct 2010].
 http://www.metrotwin.com/ [Accessed 23 Oct 2010].
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24. Thank You!