Media input is vital for PLC’s because they often play an important role in the number of shareholders and also the share price. If media was to create a bad image for British Airways, share price would fall and possibly take the number of shareholders down with it. This can also affect the influence on whether customers use British Airways or not. Fewer customers will decrease sales, profits and eventually dividends paid out to shareholders. This will not please any one who has paid a lot of money to be part of a company and they are likely to withdraw their shares. A few years ago British Airways’ staff went on strike. This was often portrayed in the media and had a great affect on catering issues. This also affected the number of customers flying with British Airways.
A major issue which decreases share price is natural disasters. Nobody can decide when these disasters will occur. British Airways has to ground a lot of flights when these disasters occur. As flights are grounded, the company makes a loss. A delay in flights also makes customers angry and this also decreases the number of customers who fly with British Airways. This decreases profits and sometimes even running costs have to be decreased. It also lowers profits and dividends paid to shareholders.
If the price of petrol was to increase, which it is currently doing on a regular basis, ticket prices will also have to increase in order to break even. British Airways can then lose customers to cheaper competitors. This will affect British Airways because their sales and profits will decrease. It will also affect shareholders because the amount of dividends paid out to them will also decrease. Shareholders will start to take their money out of the firm in order to prevent greater loss. This will mean a decrease in British Airways’ funds.
Decisions made by a multi-national firm have to be totally accurate or it can lead them to great failure. Market Directors, in charge of all pricing, have to make sure they are charging customers the right amount. They have to ensure that all costs are being covered and healthy profits are being made on top. If prices were too high, the number of sales, profit, customers and shareholders would decrease, causing the business severe financial damage.
Airlines have a lot of competition. This is why British Airways tries their best to choose routes which are not used by any other airlines. They recently closed down all flights from Southampton to the Isle of Wight due to the fact that rivals BMI had a similar route. This was a good decision because competition affects shareholders, which are the main source of funding.
How is British Airways affected by Shareholders?
British Airways holds a meeting for all shareholders. This meeting is known as the Annual General Meeting. The next meeting will be held in July 2008 at the QEII Conference Centre in Westminster. At this meeting, shareholders will be voting on issues which will most likely affect the way British Airways operates. If shareholders are unhappy with the way their money is being handled by British Airways, they are likely to withdraw their investments, causing the airline severe damage. Shareholders can then take their money to rival airlines. This and the fact that the airline would not be able to function without shareholders is why these stakeholders are crucial to British Airways. The millions of pounds in investment allow British Airways to invest in new routes, services, aircrafts, advertising and market research. All these investments will help British Airways to function better.