To compound BA’s problems, in March 1991 the USA and the UK signed
a bilateral government agreement that allowed increased competition on
the North American routes from United Airlines and American Airlines –
two of the US’s strongest competitors. A number of airlines responded
with fare reductions and BA cut US–London fares by 33 per cent and
American Airlines launched ‘the largest fare promotion in its history’.
BA’s management realized that the situation imposed by the Gulf War
required a more creative solution. The response was ‘The World’s Biggest
Offer’, a promotion modelled on the ‘Go for it, America’ promotion in
- On 21 March 1991 BA announced that on 23 April every seat would
be free – 50 000 seats. Those already holding seats on that day would fly
free of charge. All the other seats would be raffled. Hotels, car
rental, stores, restaurants, theatres were invited to tie in with their own
promotions.
The displaced revenue bookings for 23 April amounted to £10 million
and £6 million was spent communicating the offer, mostly via public rela-
tions methods. All the major US television networks gave it coverage and
in the UK Channel 4 ran an hour-long documentary on the promotion
which was syndicated around the world. Newspaper advertisements pro-
vided entry forms and promotional material was available at travel agents.
To obtain the greatest publicity, ‘Up & Away Days’ were organized at 62
airports, with reporters, photographers and broadcast teams from 60 coun-
tries being carried on flights to create feature coverage of the BA service.
The value of the resulting media coverage was estimated to be worth £60
million. BA believed that the promotion stimulated the whole travel and
tourism industry. In March the air travel market was down 28 per cent on
the previous March but by May the fall was only 5 per cent.
Sustaining success in the 1990s
BA had performed a remarkable turnaround during the 1980s. Its financial
performance and customer image had been transformed. A full analysis is
presented in Table 6.2.4 and Figure 6.2.2, including a breakdown of BA’s
turnover, profitability and other statistics from 1984 to 1995. However,
Mike Batt, Director of Marketing, recognized that there remained a lot to
do:
There is a huge range of marketing issues which need to be tackled. In a
service business like BA’s the sheer size of the organisation makes change dif-
ficult to manage. If you want things to change you cannot succeed without
the wholehearted support of the entire organisation around you. There has
to be an integrator and, in British Airways, the integrating and co-ordination
is managed by the marketing department.^14Creating and implementing relationship marketing strategies 471