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Corporate Strategy - Assignment Example
This case study revolves around the turnaround stories of two of Europe's flagship airlines that are nothing short of national emblems; British Airways (BA) and Alitalia of late, have faced stiff competition, from low-cost airlines abroad…
While Alitalia, a two-third state-owned enterprise was beset with labour union problems and was almost teetering near bankruptcy with net losses of 519 mn in the close of 2003 (its auditors refusing to certify its results!) (Source:ICFAI), BA was also consistently making loss in the 1980's until an ambitious privatisation programe slowly changed its fortunes by the onset of the Gulf War. BA also suffered extreme negative publicity due to some failed campaigns against competitor Richard Branson's Virgin Atlantic, facing lawsuits worth 3 million (Soure:Wikipedia), not to mention trade union problems, strikes etc. which continue until this day.
The scenario is far more encouraging today. British Airways despite some steady hurdles like high oil prices, and a strong pound, have maintained profits since privatisation and quite consistently, since 2002. Its net profit for March 2006 stands at 529 mn (Source:Hemscott). With the relentless pursuit on upgrade of fleet and service management, the loss-making Giant has transformed into a lean, mean machine. ...