PESTLE Analysis of British Airways for Global Airline & Cargo Operations Management TAL051-2 2021-2022 Assessment 2

This report covers the PESTLE analysis of British Airways for Global Airline & Cargo Operations Management TAL051-2 2021-2022 Assessment 2. It explains the business environment where airline operates with support of one at least strategic analysis framework. The report covers political, economic, social, technological, legal and environmental parameters. It also discusses the impact of pandemic situation on the airline industry.

Global Airline & Cargo
Operations Management

Table of Contents
INTRODUCTION ..........................................................................................................................4
MAIN BODY...................................................................................................................................4
Explain about the business environment where airline operates with support of one at least
strategic analysis framework ......................................................................................................4
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment refers to the sum of factors of all external to the firm business
through which greatly influence the functioning. It covers certain factors which includes
customers, competitors, government, suppliers, technological, political, cultural and legal
conditions. Business environment is necessary for an organisation because it is important to
make aware about the strategies and actions of the competitors(Bazargan., 2016). In the present
report, British Airways is taken into consideration. British Airways is an airline of global level
which brings culture, people and places that are together for over hundred years. It has
headquarter in London, England at Heathrow Airport near its main hub. The present report will
cover discussion about business environment where airline operates with support of one
strategic analysis framework which is named as PESTLE analysis. In addition to this, the report
will cover analysis about PESTLE analysis of British airways.
MAIN BODY
Explain about the business environment where airline operates with support of one at least
strategic analysis framework
Business environment refers to institutions, eternal forces and factors that are affected the
enterprise business functioning and which are beyond control of business. PESTLE
analysis of British airways as strategic framework is defined into following manner:
 Political Factors: Aviation industry of United Kingdom was mainly driven by EU
legislation and areas are mostly affected by regulations which include operator
licensing, personal licensing and traffic rights. There are some uncertainty caused by
BREXIT which are apart from government control of aviation industry and other
challenges of political nature(Becken and Mackey., 2017). There are some problems
raised due to BREXIT that will impact the travel of air which includes border,
immigration laws and customs. Government of UK also has taken certain steps to make
travel more convenient for their leading markets like countries of western area and US
travellers. For overcoming the challenges created by BREXIT there are various aspects
of business that airline brand must focus on. It includes financial and economic

regulation, strategy and corporate governance, customer and strategy at operational
level, customer relationships.
With context to British Airways, for managing the effects of BREIT they have taken
sensible approach and they have also announced that their flights will be run on their normal
schedule.
 Economic Factors: In UK country, these are the changes that have a direct effect on the
business of airline industry. There are certain factors which affect operators of flight and
air travel which include economic stability, level of unemployment(Hansen and et.al.,
2021). The negative impact on revenue and profitability of airline operators is majorly
due to economic slowdown. Due to announcement of BREXIT in the year of 2016, in the
UK country the economic environment has been highly uncertain. When UK economy
gets slowdown then major businesses have shifted their headquarters from UK to EU.
Due to this situation, the unemployment rate also not reaches to a higher level due to
slow economic growth rate and economic confidence level. In terms of sustainable
growth rate and profitability there are certain main factors that have helped British
Airways
It includes investment of higher level in strategic areas, higher focus on customer experiences
and changing economic situation of operating model. Due to economic uncertainty which was
caused by BREXIT and in that case also company has experienced nice growth in terms of
revenue. British Airways has also earned total revenue which has been grown by 6.1% as
compared to their previous year which reaches £ 13021 million from £ 12271 million in the year
of 2017. Their operating profit also rose by 10.3% which reaches £1952 million from £ 1769
million.
 Social Factors: Social factors which include demographic changes that plays an
important role in the context of aviation industry(Heshmati and Kim., 2016). British
Airways are the millennials whose travelling habits are different from their previous
generations. The central focus of flight operators and regulatory bodies are the
consumers, their safety and convenience. Business profitability has been majorly affected
by the social image and reputation of airline companies. British Airways also maintain
major focus towards operational efficiency, social image and reliability apart from

customer experiences. The company has also grown its focus towards sustainability and
invest in those areas where environmental impact can be increases. Due to pandemic
situation there were many airlines who have cancelled their services and Flybe was also
one of them(Lawton, T. C., 2017). With respect to BBC source, British Airways have
cancelled their flights due to outbreak of corona virus situation. British airways have
cancelled their flights to certain key destinations which include New York, France, Italy,
France, Austria, Belgium, Germany and Ireland. The fear of this disease has spread in
society which leads people towards cutting back on travel to foreign destinations. Due to
this reason it hits the operations in a very hard manner as well as about the revenue of
flight operators as well.
 Technological Factors: Technology is the main factor which drives the business into
positive manner where digital technology has helped the airline businesses to grow in
terms of their customer base. For offering superior services to its customers and to make
its fleet more fuel-efficient, British Airways has invested into technologies. In order to
ensure about higher efficiency, better services and higher profitability, British Airways
has decided to invest more in technology. To undertake a digital transformation, for the
advantage of merging technology in its daily operations on worldwide basis and the
company has taken initiative towards it. The company has also made technological
improvements in various areas which include website to streamline the booking process
and to make improvements in the BA app.
Due to this improvement, it lead towards more customer bookings of tickets which is
directly from company's website. There are also some other areas where company have
introduced new technologies which include process automation, on boarding and cargo handling.
Their major focus is towards making improvements in terms of how the company handles
analytics and data so that higher efficiency can be bring out and also to grow customer base as
well (Li and Cui., 2018).They are exploring themselves in the field of reducing carbon footprint
that has become crucial to operational efficiency as well as the company's reputation. British
airways has also added four new Airbus A 350 aircraft in the year of 2019. British airways get
support in terms of handling key challenges with support of technologies specially in the case of
pandemic situation.

 Legal Factors: This is the most concern factor in the entire aviation industry which
includes the UK market as well. Compliance is the major critical factor for all aviation
players which include British airways since non compliance can result into major fines
and also hurt reputation of brand. There are certain laws related to labour and more
operational areas that British airways is required to remain compliant with its domestic
market and overseas as well. CAA is the main regulating authority in the country of UK
and also there are additional international regulatory authorities. It oversees the
operations of international airline brands. Company has to face major challenge in the
year of 2019 in the form of pilot's strike. TO avoid disruption, company has to agree
upon the pay settlement when they have lost their legal attempt to block the planned
strike (Nam., 2015). The company's image also get affected when staff strike, operational
disruption and losses as well.
 Environmental Factors: This factor is the major concern of airline industry as well as
the aviation authorities. British airways has taken certain steps in the direction of
minimising its environmental impact on making its business model more sustainable.
Sustainability is the major parameter of strategic importance for the brand which is
continuously investing in the growing fuel efficiency of its fleet and reduces the carbon
footprint as well. The company has committed towards bringing its carbon footprint to
net zero. The company has also planned to achieve net zero CO2 emissions by the year of
2050. The company also plan to achieve twenty percent reduction in the net CO2
emissions by the year of 2030(Tomová., 2017). They have also planned to offset its
carbon emissions for their domestic flights in the UK country and make them net zero
carbon by the year of 2020. British airways has also continuously exploring new methods
and technology to control carbon emissions. There are several reasons behind the growth
of its focus on sustainability. There are certain main reasons which include better
reputation and social image, incentives from UK government as well as customer
satisfaction.
PESTLE analysis of British airways plays a very important role in terms of decision making and
growth and development of an organisation. These decisions are very necessary from the
context of future growth and further planning and strategy of British airways. These factors

analyses each and every aspect of an organisation and also covers country as well where their
performance majorly affects the further growth of a country.
CONCLUSION
The above stated report concludes that global airline and operation management has their
own role and importance on their own place. The airlines which travel and covers almost every
area of world then those airlines have their own unique features as well as their own quality. It
has been concluded that PESTLE analysis of particular airline plays a very important role in
terms of analysing the organisation into deeper manner. This analysis covers certain factors
which include political, economic, social, technological, legal and environmental parameters as
well. The growth of an organisation depends on their its political stability, economic power and
social situation as well. In addition to this, technology is a major factor which is very important
in the context of overall improvement of an organisation. Moreover, there are also other two
factors which include legal and environmental parameter as well. So for proper operation
management of an organisation it is necessary to consider each an every aspect of this analysis.
That's why operation management is very important at organisational level.

REFERENCES
Books and Journals
Bazargan, M., 2016. Airline operations and scheduling. Routledge.
Becken, S. and Mackey, B., 2017. What role for offsetting aviation greenhouse gas emissions in
a deep-cut carbon world?. Journal of Air Transport Management, 63, pp.71-83.
Hansen and et.al., 2021. Cost management. Cengage Learning.
Heshmati, A. and Kim, J., 2016. Efficiency and competitiveness of international airlines.
Springer.
Lawton, T. C., 2017. Managing proactively in turbulent times: Insights from the low-fare airline
business. In Strategic Management in Aviation (pp. 161-181). Routledge.
Li, Y. and Cui, Q., 2018. Airline efficiency with optimal employee allocation: an input-shared
network range adjusted measure. Journal of Air Transport Management, 73, pp.150-
162.
Nam, S. J., 2015. Cross-cultural service variation: Airline service quality. The Journal of
Distribution Science, 13(9), pp.19-27.
Tomová, A., 2017. Two businesses of air navigation service providers: The case study of NATS.
Transportation Research Procedia, 28, pp.99-105.