Understanding the Business and Economic Environment: The Tourism Industry

FE4355 Understanding the
Business and Economic
Environment The Tourism
Industry

CONTENTS
INTRODUCTION......................................................................................................................1
MAIN BODY.............................................................................................................................1
The structure of the airline industry.......................................................................................1
Case study company’s profile................................................................................................2
PESTLE analysis....................................................................................................................2
Business challenges and its implications................................................................................4
CONCLUSION..........................................................................................................................4
REFERENCES...........................................................................................................................5

INTRODUCTION
Speaking about the business environment, it is being referred as the business
surroundings and encompasses the factors which impacts the operation of the company.
There are many internal and external environmental and economic factors that influence the
business. considering this, the main aim of the present work is to focus on understanding the
environmental and economic context of the case study company that is British Airways. It is
one of the leading intercontinental airline companies of UK. The report will throw some light
on the industry in which the company operates along with the overall company profile.
External environmental analysis will also be done through adopting PESTLE tool. The final
section of the report will highlight some business challenges and its implications on the
company.
MAIN BODY
The structure of the airline industry
According to Cole (2018), the travel & tourism industry is one of the most significant
sectors in the economy of nation. This industry is forming around 5 percent of the gross
domestic product of UK. This industry has different sectors, however the sector in which the
case study company that is “British Airways” operates is transportation or airline sector. In
the present time, UK has the third largest airline network across the world and has acquired
the second largest position in aerospace manufacturing sector. The airline sector has a
turnover of over £60 billion and is making a contribution of around £22 billion to the national
Gross Domestic Product. Additionally, this sector is also making an important contribution
towards generation of one million jobs directly as well as indirectly being assisted by it.
Furthermore, the airline industry of UK is offering different advantages to the country and its
society in both economic as well as social context.
This sector has boosted the other sector of the travel and tourism industry such as
hospitality, hotel and leisure industry. Currently, the residents of UK make almost 60 million
visits overseas each year. Out of which eighty percent are being made by air because there
are very few substitutes available to air travel for long haul and short haul destinations
(Alkhafaji, 2019). Moving further, the airline industry of UK is very competitive and
dynamic because of the presence of different players and driving trends in the market.
Companies such as Emirates, Lufthansa, EasyJet, Air France and Ryanair are tough rivalries
of the company in the UK market. However, British Airways have maintained a leading
position in the market by offering high quality with high prices.
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