PESTLE Analysis of British Airways and Elements Related to the Airline Industry

This report discusses the business environment of British Airways and how external factors affect the airline industry through PESTLE analysis. It also covers elements related to British Airways such as competitors, new entrants, passenger and freight market, and relationship with suppliers. The report highlights the impact of political, economic, social, technological, environmental, and legal factors on the airline industry. The report concludes with the post-Brexit effects on British Airways and the impact of the pandemic on the industry.

GLOBAL AIRLINE AND
CARGO OPERATIONS
MANAGMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PESTLE Analysis of British Airways..........................................................................................3
Considered elements related to British Airways..........................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................1

INTRODUCTION
Every organization has different and own aims and objectives that is obtained from the proper
planning and have a vision for which planning and strategies are framed within the organization.
Business environment refers to the collection of the internal and external factors such as
employees, customers, competitors, suppliers etc.(Wilson, 2018). These factors are present in the
environment and affects the functioning of the organization directly
The report covers the business environment of the British Airlines and how the external
factors affects the business through the strategic model of PESTLE analysis and elements related
to the British Airways.
MAIN BODY
Business environment helps the company to identify those factors and grab the opportunities to
improve the overall management of the organization. Business environment is classifies into two
categories :Macro and Micro environment.
Macro environment refers to the set of conditions which exist in the economy as a whole and
can affect the GDP, inflation, employment, monetary and fiscal policy of the country. Micro
environment refers to those sectors of the organization which are present in the company and
affects the ability of the firm to operate in the future(Park, 2019). The management and
operations of the company is affected by the micro environment factors and hampers the firm's
ability to meet the objectives of the company.
PESTLE Analysis of British Airways
There are various factors in the airline industry which affects the operations and functions of
airlines. Modified strategic decisions will help the British Airways to maximize the future
forecast of the industry. The business environment involve the various factors which affects the
airline industry and can have impact on the profitability of the company, in order to analyse this
PESTLE analysis is conducted to examine the various external elements that affects the business
environment(Musyoki, 2018.). PESTLE analysis of British Airways is the strategic method
through which the company examine all the external factors that are affecting the business of the
British Airways. It is the combination of the six external factors which affects the growth of the
business and includes:Political, Economic, Social, Technological, Environmental and legal
factors which affects the functioning of the business.

Political factor:Political factors plays a very significant role in the Aviation industry. There are
various reasons for the growth of the political factors such as political stability, function of the
government policies with regard to the market attractiveness and also creating the business
friendly environment and the impact of government regulations in the overall aviation sectors in
all the different regions. The airline industry is highly affected by the government policies and
regulations in the aviation markets of UK. The political environment of UK and the existing
government regulation highly impact the profitability of the different airline companies. Apart
from the full government control and formalized government policies, the uncertainty caused by
the Brexit has also caused a great impact on the various airline brands(Choi, and Hampton,
2020). The Government of UK has taken various measures to make travel convenient for the
travellers. When UK was the part of European Union, there was no barrier related to travelling
across the borders and British Airways considered many steps in order to overcome the negative
impact of Brexit affected the profitability of the airline brand. The British airways have taken
various sensible steps to cope up with the negative impacts of the Brexit and give satisfaction to
the customers.
Economic factors:Change in the economic sectors directly affect the business of the airline
industry in UK. The economic environment of UK has been doubtful after the Brexit and the
economy of United Kingdom has suffered a lot after the Brexit and led to decrease in the
economic growth of the country(Sabar, Anuar, and Abdullah, 2018). The high level made by the
British Airways in the developing its strategies, concern about the customers comfort level and
ability to adopt itself with the help of modified operating models helped the company to sustain
its growth rate and profitability and also to survive in the economic crisis due to the Brexit.
Social factor:Social factors such as demographic changes plays a very significant role in relation
to the airline industry and the social image and reputation of the British Airways that affects the
profits of the company. British airways not only focuses on customers experience but also on
operational efficiency and social image of the company(Solar, 2020.). The company has taken
various steps by investing in the areas and projects in order to reduce the environmental impact.
Due to the situation of coronavirus has hit the industry resulting in shutdown of the airports and
cancelling of the flights which caused huge amount of loss to the airline industry.
Technological factor:The evolution of service technology and sales has resulted in the faster
growth of the airline industry globally. The innovation of the digital technology also helped ion

the growth of its customer base and in the market effectively. British Airways is investing in its
technology area in order to make increase the fuel efficiency and to increase the customer
experience to their passengers. The company is planning to move into full digital transformation
to take full advantage of the new technology emerging in the market and also to provide better
customer to its passengers(Spasojevic, et.al,). Due to the adoption of new technology, British
Airways has helped the company to manage the challenges arising from the Brexit.
Environmental factors:Various forms of pollution such as air, noise and land are the external
environmental factors that the British Airways have to face. The main point is that the airways
has to mange the different climate and weather changes. In order to support and make the
environment pollution free, the government is making efforts and introducing new rules and
regulation regarding the increase in the growth of the radiations and emissions. The British
Airways have taken various steps in order to minimize the environmental impact and focused on
making its business model more adaptable to the environment.
Legal factors:Legal factors is considered as an important factor in the overall aviation industry
in the UK Market. Complying with the rules and laws for the aviation industry is important as
not following these rules can result in strict fines and can hurt the reputation of the brand. There
are several laws which reflects the customer convenience, safety of the passengers and
environmental impact that is mandatory for the aviation industry to comply with the provisions
of the act. The British Airways have to comply with the laws of the domestic market as well as
the global markets.
Considered elements related to British Airways
Competitors:British Airways has number of competitors at different level both at the local level
and international level airlines. The competition scope of the international level is high which
can be because of many reasons such as price structure, convenience policy and services
provided by the different airline companies(Douglas, and Tan, 2017). In order to maintain its
present position in the market, British airways has to maintain its quality, services and maintain
its market share.
New entrants:There is low threat of new entrance for the British Airways as in order to enter
into the airline industry, there are various barriers such as huge investment is required and efforts
are made to gain the desired market share as there are various problems such as existing

competitors, very little product differentiation and cost(Jagtap, et.al, 2021). These barriers create
the problem for the entrance of new company in the market.
Passenger and fright market
The leading airways British airways targeting different customers as per the requirement of the
consumer in order to satisfy them. The organization bifurcated the fright charges according to
preferences of the consumers. Along with the frights' organization delivered various level of
segmentation to the consumer and targets in context to the level. The bifurcated plane are namely
economy class, premium economy, executive club and first class.
 In the economy class the organization considers the people who are kids, adolescent and
middle-aged and elderly aged people who are generally occupied low salaries, or they
are students. The people who preferred economy class are those who travel regularly in
affordable price with low expectation.
 Under the premium economy the organization include as the targeted customers who are
the teenagers and middle-aged people. The income of the people is not so high not so low
can be considered in low income people. They carry low and middle level of social
status. The targeted buyer choose the organization for the holiday at valuable price
offered by the company (Airways, 2017).
 In executive club the targeted consumer are based on the urban geographical areas. This
level of the segmented flights are chosen by middle-aged as well as old aged people who
acquire high income. The individuals are businessmen and professionals by the
occupation who has high standard in the social life. The considered consumers generally
travel for the business meeting, conferences, exhibitions etc. they expected high services
from the organization as they are educated.
 The public which use international flight with high income and willing to pay high frights
are considered in the heading first class. The targeted customers of first class are newly
married who are ambitious and enthusiastic to travel with high expectation. They
preferred these airlines for honeymoon and business trips with luxury convince.
Relationship with suppliers

The organization maintain better relationship with the suppliers like airports, manufactures and
fuel companies in order to generate more profit and deliver customer satisfaction.
AIRPORT- the airport and airline serve some smiler sort of service. They are separated with
each other but serve the same customer. They are interconnected with each other and maintain
good partnership relationship. The organization coordinate with the airport like which flight is
arriving at what time period (Zoge, and Buhalis 2008). The airport serve the customer of airline
and provide platform to the guest of organization for arrival and departure.
MANUFACTURING- the organization build great connection with the manufactures in order to
deliver perfect services to the consumer . The manufacturing supplier deliver the air-plans to the
organization. The aim of the both the organization are same which to earn profit. The
manufacturer produce product for the customer of the organization.
FUEL COMPANIES- the organization have great maintenance of relationship with each other.
They both give assistance to each other in generating and increasing the surplus of the
organization. The organization coordinate with the fuel company to provide fuel on time in
exchange for money.
CONCLUSION
From the above report, it can be summarized that business environment plays a very
crucial role in the functioning and existence of the company as the internal and external factors
existing in the environment can hamper the operations of the business. The business environment
of the airline is also affected by the various factors which can affect the profitability of the
industry. The situation of pandemic has also impacted the growth and profits of the industry. In
the report PESTLE analysis is conducted in order to examine the external elements of the
business environment and post-Brexit effects on the British Airways. Along with this basic
elements of the British Airways is also considered like new entrance, competitors, passenger and
freight market etc.

REFERENCES
Books and journals
Airways, B., 2017. British Airways. Where we fly.[Online] Available at https://www.
britishairways. com/travel/where-we-fly/public/en_gb/map [Accessed 10 October
2019].
Choi, W. and Hampton, S., 2020. Scenario-Based Strategic Planning for Future Civil Vertical
Take-off and Landing (VTOL) Transport. Journal of Aviation/Aerospace Education &
Research 29(1) pp.1-31.
Douglas, I. and Tan, D., 2017. Global airline alliances and profitability: A difference-in-
difference analysis. Transportation Research Part A: Policy and Practice 103 pp.432-
443.
Jagtap, et.al, 2021. Food Logistics 4.0: Opportunities and Challenges. Logistics 5(1) p.2.
Musyoki, S.M., 2018. Organizational resources, strategy, and environmental turbulence in Kenya
Airways Limited (Doctoral dissertation, University of Nairobi).
Park, E., 2019. Corporate social responsibility as a determinant of corporate reputation in the
airline industry. Journal of retailing and consumer services 47 pp.215-221.
Sabar, R., Anuar, N.K. and Abdullah, R., 2018. Preferences of low-cost passengers, low cost
airlines and airport management on Low Cost Terminal (LCT) Facilities Development
Model. International Journal of Supply Chain Management (IJSCM) 7(6) pp.150-157.
Solar, C., 2020. Introducing Change in Public Service Organizations under Austerity: The
Complex Case of the Governance of the Defence in the United Kingdom. Politics &
Policy 48(4) pp.700-726.
Spasojevic, et.al, 2018. Air transport and tourism–a systematic literature review (2000–2014).
Current Issues in Tourism 21(9) pp.975-997.
Wilson, N., 2018. The impact of service quality and brand image toward customer loyalty in the
Indonesian airlines industry. Jurnal Manajemen Indonesia 18(3) pp.222-234.
Zoge, M. and Buhalis, D., 2008. British Airways: customer enabled interactivity. Buhalis, D.;
Egger, R. etourism case studies. Elsevier Ltd, pp.269-281.
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