British Airways - Climbing above the turbulence. How British Airways countered the budget airline threat
Richard Storey, Rob Day and Andy Edwards, Institute of Practitioners in Advertising, Silver, IPA Effectiveness Awards, 2004
This case study tells the story of how BA faced up to new competition using communications to drive through a fundamentally restructured business model.
This case study tells the story of how BA faced up to new competition using communications to drive through a fundamentally restructured business model. BA was facing huge threats from low-cost airlines that were jeopardising its long-term position in Europe. The airline had dropped out of the FTSE 100, but rather than bail out of Europe, BA believed it had to battle to survive. If it turned its back on its short-haul service, the company figured its premium long-haul operation would be next to suffer. BA took on the budget airlines at their own game by competing on price, but also using its strong service heritage to its advantage. Research showed that consumers wanted ‘services that matter’ such as centrally located airports and allocated seating, as long as the price wasn’t out of their reach. BA launched its communication strategy, exposing the false promise of ‘no frills’ and creating awareness of BA’s lower prices. At the core of BA’s communications strategy was the element of surprise. It bought typically un-BA media such as street projections and ATM machines to supplement its commercials. This campaign re-set the value agenda and began to reframe the competition. In doing so, it has played a crucial role in safeguarding BA’s standing amongst the public, its staff and the City. BA posted increased profits of £230m for year ending March 2004 and has re-established itself as a FTSE 100 company. Its European position looks secure.