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Growing larger often entails increasing an airlines global presence however, a task, which at first glance, may seem cost prohibitive.
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Airline offers severe weather louvers to protect against wind driven rain.
These techniques include mergers and acquisitions, establishing franchisees, de-regulation, code sharing and more.
These tactics and techniques for achieving and maintaining economies of scale and scope are discussed below.
Within industries like the airline industry, the volume needed to achieve economies of scale is often almost too high to meet, thus few companies are able to achieve economies of scale without broad measures and international expansion and cost cutting (Katrishen & Scordis, 1998).
Marketing, image-building, personnel specialization and common governance are all factors that can improve economies of scale for a multinational firm like British Airways (Katrishen & Scordis, 1998).Specific attention is also given to the future of the airline industry with specific attention paid to British Airways and their achievement with respect to economies of scale and scope over time.Economies of Scale And Scope Economies of scale are often considered the lifeline of an organization, particularly large multinational organizations like those involved in the airline industry.Economies of scale can only exist if a firm's operating costs increase at a rate lower than the rate of output (Katrishen & Scordis, 1998).The hope in the airline industry including for British Airways has been to create cost advantages through economies of scale.The franchise form of an organization generally enables an organization including an airline industry to achieve the size necessary to create economies of scale (Bronson & Morgan, 1998).Franchisee outlets are in fact favored over independent businesses as they are often considered a method of decreasing unit costs as a "function of increasing unit volume" (Bronson & Morgan, 1998: 33).Likewise economies of scale tend to focus on changes that occur on the supply side of operations, including changes that occur in production whereas economies of scope focus on changes that occur with the demand side of production including marketing (Wikipedia, 2005).Many marketing strategies arise from economies of scope including family branding and product bundling (Wikipedia, 2005).Continuing scandals and revelations from the Hayne Royal Commission are further eroding Australians’ trust in the ethical behaviour of companies and .Members can download a complimentary presentation of the 2018 Ethics Index.