1. What evidence you can find in the Annual Report of the company's financial objectives. Outline how the company might attempt to achieve its stated financial objectives when undertaking a large-scale business decision.
Objectives of most businesses in theory include maximasation of profit, maximasation of the return on capital employed, survival, long-term stability, growth, satisficing and maximasation of shareholders' wealth.
In practice in Annual Report of British Airways (BA), according to Willie Wlash (Chief Executive), the main long-term target of BA is to create a world leading global premium airline with a reputation for being the very best at meeting its customers' needs.
Willie Walsh stated objectives of the company in five key points;
"1- Be the airline choice for longhaul premium customers,
2- Deliver an outstanding service for customers at every touch point,
3- Grow BA's presence in key global cities,
4- Build on company's leading position in London,
5- Meet their customers' needs and improve margings through new revenue streams."
BA will take the following steps to achieve its stated financial objectives;
* In order to achieve target number 1, BA will;
Establish new business class seat on longhaul and redign first cabin.
Build premium facilities in New York JFK and keep investing on lounges in other cities to improve Terminal 5.
* In order to achieve target number 2, BA will;
Train their staff both on ground and on the air to provide world-class hospitality and customer service.
Continue to improve ba.com.
Launch new in-flight entertaintment system.
* In order to achieve target number 3, BA will;
Increase network by launching flight to more destinations such as to Dubai, Johannesburg and Saudi Arabia to provide highest galobal connectivity standards.
* In order to achieve target number 4, BA will;
Ensure that Heathrow remains center of world-class focus in aviation market to provide BA strong London base.
Acquire new position, support plans for a third runway at Heathrow and work with BAA to enhance baggage and terminal facilities at Heathrow.
* In order to achive target number 5, BA will;
Create profitable secondary services to customers and increase brand reputation. The aim is to grow BA's mileage business and push revenue to highest level by third-party engineering, in-flight sales and new online retail website. ba.com also provides different options of packages including hotel and car hire as well as flight at great vaule.
BA set 3 year business plan (B11) on 2008/2009 called Compete 2012 to help them to achieve their long-term goal. According to Willie Walsh, main aim of the Compete 2012 programme is to build on Terminal 5's strengths to upgrade the customer experience, continue to make the business more cost effective, grow their operations and make corporate responsibility a promient part of their business. Record fuel prices and the global economic downturn meant needed to revise plans and the priorities.
According to Martin Broughton (Chairman), the long term goal of the BA is to create high performing, market focused, global premium airline. This is because they believe in the next 10 or 20 years, the industry will be dominated by a small number of global airline groups and they want to be leader in that consolidation process. Long-term aim is to provide their shareholders with a consistent and growing dividend stream and to pay meaningful executive and employee bonuses.
The actions BA took so far to achieve goals;
* They have merged Iberia and become merger with Quantas.
* They have applied to anti-trust immunity to run a joint business across the Atlantic with fellow oneworld members, American Airlines and Iberia.
* They have started to operate premium services from Paris and Amsterdam to New York.
* They have continue to innovate; launched new routes from London to Hyderabad and St Kitts.
* They have launched OpenSkies, susbsidiary lying from continential Europe to North America in June 2008.
* They have launched first London City to New York JFK service to start in 2009.
* They have opended Terminal 5 at Heathrow.
* They become the customer service champion of the London 2012 Olympic and Paralympic games.
* They have rosen satisfaction ratings across network by 8% point to 76%.
* They have achieved 99.5% regularity and 82.5% of flights departed on scheduled time.
* They have reduced misdirected bags by 72% better than previous year.
* They have launched premium check-in.
* They have acheved satisfaction with the new club world cabin.
* They have reduced manpower equivalents by 1750 including 478 managers.
* They have continue to invest in efficient and flexible new aircrafts contracted six Boeing 777-300ER aircraft (two acquired, four leased) with a further four .
* They have continue to invest on lounges, new in-flight ertertainment system, cabin upgrades across their longhaul fleet and premium service training.
* They have rearrange capacity in a way to meet weaker demand and to take the advantage of most fuel efficient aircraft.
* They have record fuel prices to maintain the prices to control costs. Terminal 5 allowed to cut the cost of Heathrow operations.
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