Deliveries to BBA of aeroplane food and other good for subcontractors of BAA will be more expensive due to the increase in charges to the delivery companies they will be forced to increases their charges to BAA. The increase in charges to subcontractors may result in their inability to pay rent to BAA.
Overall Assessment of Affect:
I believe overall the introduction of road charging for driving in congested areas would have marginally negative affect on BAA, as due to their airports positioning their vehicles (delivery and employee) as well as customer vehicles the prices to travel to and around the airport is likely to be highly expensive, this is inevitably going to increase the costs to BAA and this is likely to result in an increase in prices in order balance BAA’s revenue.
The average age of the population increases so there are fewer young people and more elderly people
Positives:
BAA has the possibility to implement older generation suitable facilities such as more cafés. BAA may also want to ensure that its airports have a quite and comfortable environment, which may require the removal of some service i.e. an arcade, which may result in complaints from the younger generations whom make use of this service. Services such as electronic buggie taxing, to aid elderly people to access all areas of the airport and technology to ensure the partial sighted and hard of hearing are able to communicate, would be required.
Subcontracted businesses to BAA’s airport may have an increase in sales of certain products such as anti-DVT socks etc. This could result in a higher profit for BAA if it receives a percentage of the subcontracted businesses profits.
Negatives:
The new equipment for OAP’s is an additional expense to BAA. Statistically the majority of flyers of members of the younger generations, however this could be seen as another reason to implement a train service if the UK population are more likely to holiday within the UK rather than abroad. Higher levels of security methods and convenience services (electronic buggies) can be costly.
Overall Assessment of Affect:
I believe overall the increase in population would be positive for BAA due to a high number of the elderly UK population choosing to spend their disposable income travelling. BAA’s airports also currently contain facilities such as cafés and comfort lounges that appeal to the lifestyles of the older generation.
BAA being forced to sell Gatwick Airport
Positives:
Due to the media coverage of the governments attempts to prevent BAA becoming a monopoly, more possibly buyers are aware of the sale of the airport. As a result of this; the higher level of competition could result in a ‘bidding war’ consequently resulting in a higher buying price and also due to the high selling price it is likely to be bought in partnership which is likely to result in a high standard team operating the airport.
Due to whoever buys Gatwick becoming direct competition to BAA, both are going to require offering a high standard service, to ensure customers use their facilities and not the others.
Due to the most potential buyers being Virgin Atlantic and Easy jet, BA who use 30% of the slots at Gatwick currently are likely to be overpowered by the increase of Virgin Atlantic and Easy jet flights into Gatwick.
Negatives:
BAA are not optionally selling Gatwick, but being forced to by the government and in doing so BAA are loosing all revenue generated by Gatwick in the future.
An increase in competition to BAA, from Virgin Atlantic and Easy jet could result in more customers making use of Virgin Atlantic and Easy jet service rather than BAA’s. BAA is likely to lose custom from Virgin Atlantic and Easy jet at its other airport as they now have the option to use its own airports.
Overall Assessment of Affect:
I believe overall BAA being forced to sell Gatwick airport would have negative short term affect due to the loss of revenue and higher level of competition from purchaser of Gatwick. However I believe the long term affect to BAA will be positive due to the allowance to keep other BAA airports by the UK government.
L3 Business Studies Arran Laundon
