Positive and Negative Impacts of PESTEL Environment on British Airways

Business in
Context

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Description of Positive and Negative impacts of PESTEL environment on British airways 3
Identification of key challenges faced by British Airways ...................................................5
Examination of how British Airways responds to various challenges in context of business
strategy ..................................................................................................................................6
Recommendation ...................................................................................................................8
CONCLUSION ...............................................................................................................................9
REFERENCE.................................................................................................................................10

INTRODUCTION
The implementation of Brexit deal has changed external business environment for
various industries Collinson and et. al., (2020). British Airways is the selected firm for the
completion of this report. The company is flag carrier airline based in UK and was founded in
the year 1919. The total fleet operated by the company equals to 249 and the firm offers airline
services to 183 destinations. The present reports includes description of negative and positive
impact of PESTEL environment on British Airways. The primary obstacles faced by British
airways are also provided in this report. In addition to this, the response of British Airways to
various obstacles affecting the company is examined and recommendations for the company are
mentioned.
MAIN BODY
Description of Positive and Negative impacts of PESTEL environment on British airways
PESTEL analysis is tool used to understand external environment of business firms and it
covers political, economical, social, technological, environmental and legal factors affecting a
business firm. PESTEL analysis of British Airways is provided below including the positive and
negative impact of each factor on the company.
 Political Factor: The main political factor affecting growth of airline firms in UK and EU
is Brexit Folsom (2017). This is because Brexit has imposed new ownership and control
restrictions for airline firms operating in UK airspace. In addition to this Brexit limits
availability of EU workers in UK which has created labour shortage in the country. This
also impacts airline firms in UK as EU workers act as skilled and low cost workers for
business firms.
Positive Impact; The positive impact of this factor is that the new ownership and control
restrictions are relaxed for UK airlines which had operating license at the end of transition
period. This is beneficial for British Airways as the company was operating with licences during
the transition period.
Negative Impact; Lack of EU workers in UK negatively affects British Airways as it increases
labour costs amid the COVID-19 pandemic. It is important for airline firms to reduce costs until
global travelling conditions return to normalcy in order to quickly recover from, the pandemic.