In the case of British Airways Plc, it can be seen that investors gain from huge capital gains alone and hardly from dividend. It is notable that the company’s common stock price is in an uptrend.
Though market price is rising, the company’s financial performance does not seem to justify this uptrend. Looking at the players’ gross margin, British Airways Plc shows superior performance in managing its costs of operations. It should be noted that the business organization, aside from surpassing the industry average of 38.91%, also manages to outclass its competitors who perform below the industry’s rate. UAL Corporation’s gross profit accounts for 36.11% of its turnover while Air France records a very low gross margin of 15.24%. Table 6 shows the competitive analysis of other players in the airline industry. Thus, British Airways Plc has a capital structure of 82:18 capital structures in favor of creditors. Generally, this capital structure indicates the business class airline’s preference for riskier financing. Liability is generally considered as a more costly source of financing since it ties up the firm with immediate and regular interest obligations.