Stakeholder theory and

its impact on British

Airways.
1

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
BA
has a great
its profile.
number
of
different
stakeholder
groups, only 10
of them are
considered the
2

BA Stakeholders
Governm
ent/Regu
lations

Custome
rs

Environm
ental
Issues

Local
Commun
ities

Employe
es

Sharehol
ders

Competit
ors

Financial
Institutio
ns

Suppliers
Media

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.

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.

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
the company makes.
6

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
BA.

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.

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

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 BAs gearing
ratio and liquidity.
9

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
strategies.

10

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.
11

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
company itself.

Due to bilateral
agreements
between countries,
some carriers
cannot operate on
specific routes.

12

Stakeholder Relationships
cont.

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

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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.
14

BA is in for a two-way
communication
cont.

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.
15

Terminal 5 is working a successful British Airways Campaign

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"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
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the travelling public.

"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.
18

"Terminal 5 is working cont.

Measurement and evaluation:

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 customerorientated company.
o

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"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.
20

References

LEtang, 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/marketintelligence/view/product/2388/airlines?
highlight=airlines+2010&utm_source=kn.reports.search#[Acce
ssed 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.brit
ishairways[Accessed 23 Oct 2010].
Williams , E., 2008.Terminal 5 Is Working. [Online] (Updated 06
Aug) Avaiable at:http://www.creativereview.co.uk/crblog/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-sixmonths/[Accessed 23 Oct 2010].
http://www.britishairways.com/ [Accessed 23 Oct 2010].
http://www.metrotwin.com/ [Accessed 23 Oct 2010].
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