Running Head: Brand management
[Name of the student]
[Name of the institute]
Both British Airways (BA) and Ryanair (RA) are unbeaten airlines at the top of their particular markets. BA is a more conventional, extensive haul full service carrier, whereas RA is part of the innovative bucks of short haul, low cost, low frills carriers. The plan of this essay is to give an synopsis of the business, and the three firms, looking in brief at their history and future brand management and then to carry out a brand analysis on the companies from strategic viewpoint (Humphreys, Ison and Francis 2007)
The airline industry, as many industries, is an imperfect oligopoly. After five consecutive years of losses, major providers are losing market share. S&P Airlines stock price underperformed the overall market. (Pizam and Smith 2007) In 2004, the overall airline industry lost $5 billion dollars. To overcome this situation, large airlines are undertaking aggressive cost cuts to survive, but many of them have been unable to offset oil prices cost increase. Oil prices, labour costs, overcapacity, competitive pressures and a high debt to assets ratio are driving major airlines to ally, merge or change dramatically its business strategy in order to survive. British Airlines and Ryanair have been successful during this difficult period. (Nankervis 2008)
Airlines are energy-intensive operators. Fuel costs accounted for 19% of total revenues in 2004, versus 15% in 2003. Incumbent airlines have been forced to acquire new airplanes and to reduce waiting time in airports. (Pizam and Smith 2007)
Airlines are intensive in capital, labour and technology. Labour costs represented 36% of the revenues of the industry in 2004, down from 39% in 2003 and 44% in 2004. This is forcing major carriers to enter into salaries and benefits renegotiations, including pension plans. Low fare and regional...