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British Airways Background to the Current Strategy Over the last two-and-a-half years, British Airways has made significant changes in its business strategy. The changes are a response to developments in the market environment which overturned some of the assumptions under which the company was developing its business in the mid-1990s. Opening up of the European market has seen increased competition as established airlines have expanded their networks and new low-cost competitors have arrived on the scene. The UK has experienced a more rapid growth of low-cost operators than any other major European market. At the same time, competitor hubs to Heathrow have been developing, supported by Open Skies agreements between a number of EU countries and the US. This has exposed the limitations of Heathrow infrastructure and the business's lack of competitiveness in the market for transferring passengers. The attempt to circumvent these Heathrow constraints by developing Gatwick as a complementary hub has not...

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