Detailed PEST-C Analysis for Air Canada's Global Market Expansion

This report presents a PEST-C analysis, a strategic tool used to evaluate the external environment for business operations, focusing on potential markets for Air Canada. The analysis examines political, economic, social-cultural, technological, and competitive factors in several countries, including Ca...Read More

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Air Canada PEST-C Analysis
Name
(Affiliation institution)

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PEST-C Analysis of potential markets for Air Canada to penetrate
PEST-C Analysis is used to examine the external environment in which a business
operates or intended to launch new products and service to assess the level of competitiveness,
opportunities as well as threats (Yüksel, 2012).PEST involves political and legal factors,
macroeconomic factors, social-cultural factors as well as Technology factors. The selected
countries with potential markets for Air Canada to venture to include Canada, China, United
Kingdom, United Arab of Emirates, Tunisia, Ireland as well as Brazil.
PEST-C analysis OF Canada
Political factors Economic factors
 Political stability- Canada is governed by Federal
parliamentary democracy which has maintained a
politically stable climate for Air Canada to do
business.
 Regulations- Canada is a highly regulated political
environment with government favouring passengers
over the airlines. Passenger safety is paramount in
Canada hence resorting to strict regulation of the
industry which in turn has resulted in low prices.
 Taxation- Canada has low corporate taxation of
15% which has resulted in the market being
profitable although the number of competitors is
increasing (Ward 2020).
Economic growth- The growth of the economy in
Canada before the emergency of COVID 19 has created
an attractive market for AIR Canada company to expand
its operations.
GDP- The GDP of the company has increased
significantly with consumers having a disposable income
to spend on luxury products. The increase in GDP rates
creates an opportunity for AIR Canada to do business.
-Unemployment rates- The declining employment rates
of Canada has created a massive competition on the
available skilled workers. According to (Central
Intelligence Agency, 2020), Canada has 6.3%
unemployment rates.
Social-cultural factors Technological factors
 Education levels- Canada has a higher education  Access to technologies-Canada has a high level of

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level. Currently, the literacy level of Canada is 99%
indicating Air Canada has assessed to skilled labour
(Macrotrends, 2020).
 Changing patterns of consumers- The increase in
spending behaviour among the customers on
Airline products has created a huge demand for Air
Canada products in the industry.
 Population- Canada has a high population of
37,694,085 with a growth rate of 0.81%.
Furthermore, 81.6% of the population stays in
urban (Central Intelligence Agency, 2020). The
high population increased the number of potential
customers.
access to technology which has increased
efficiencies and effectiveness in operations.
 Rates of innovations- The rate of technology and
automation is very high which have resulted in the
Aviation industry spends much of its revenue to
respond to the emergency of new technologies
leading to marginalized profits.
 Research and development- The country has a
high investment in Research and Development
which ensures there are high rates of automation in
the market.
PEST-C Analysis of China
Political factors Economic factors
 Political stability- China has a stable political
climate for Air Canada to invest.
 Taxations- China has a high rate of corporate
currently standing at 25%. With high competition
in china, high taxation could threaten Air Canada
profits.
 Economic growth- the country has experienced
high economic growth over the last few decades
surpassing the USA in 2014 to emerge as the
largest economy in the world (Central Intelligence
Agency, 2020). Increase in economic growth is an
opportunity for Air Canada Company to do

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 Market regulations- China has a low level of
corruption and therefore the market is strictly
regulated. The strictly regulated markets can lead to
the government to experience sustainability issues.
business as tariffs are low.
 Interest and inflation rates- Inflation and interest
rates in China are very low at 1.6% hence
increasing disposable income among citizens
(Central Intelligence Agency, 2020).
 Unemployment rates- the levels of
unemployment rates in china are very high.
Social-cultural factors Technological factors
 Education levels- The education levels of china is
very high with the country recording literacy level
of 96.8% (Central Intelligence Agency, 2020).
 Changing patterns of consumers- The purchasing
behaviours of customers has shifted in China over
the past decades with disposable income leading to
high expenditure ina= aviation products.
 Population. China is the most populated country in
the world with a population of 1,394,015,977
people (Central Intelligence Agency, 2020). The
high population has provided a base for the growth
of GDP.
 Access to technologies- The level of access to
technology in china is high.
 Rates of innovations- the country has a high level
of innovation creating a very competitive
environment.
 Research and development- China has invested
significantly in Research and Development
(R&D).
PEST-C Analysis of United Kingdom

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Political factors Economic factors
 Political stability- The political climate of the UK is
very stable for Air Canada to do business.
 Taxations- Corporate and income taxation is very
low in the UK with the government lowering the
taxation rates from 20% to 17% in 2020 (Central
Intelligence Agency, 2020). Low taxation will lead
to high profits for Air Canada.
 Market regulations- the strictness of the UK market
is average.
 Economic growth- UK has experienced high
economic growth over the past decades. Currently,
the UK has the largest economy in Europe
(Central Intelligence Agency, 2020).
 Interest and inflation rates-The interest rates are
low in the UK with the country recording 2.7%
inflation rates in 2017 (Central Intelligence
Agency, 2020). Low inflation and interest rates of
the UK creates disposable incomes for Ai Canada
 Unemployment rates- unemployment is very low
with the country having unemployment rates of
4.4% (Central Intelligence Agency, 2020).
Social-cultural factors Technological factors
 Education levels- The education levels are very
high in the UK with literacy rates of 99% (Central
Intelligence Agency, 2020)
 Changing patterns of consumers- The consumer
behaviours of customers has shifted due to change
in lifestyles creating both opportunities and threats
to the company.
 Population- UK has a high population of 65.1
million with urban forming 83.7% of the total
 Access to technologies- Access to new technology
is high in the UK.
 Rates of innovations- The rates of innovation in
the UK is also very high.
 Research and Development- Research and
development invested in the UK is very high.

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population (Central Intelligence Agency, 2020).
PEST-C Analysis of Ireland
Political factors Economic factors
 Political stability- The political climate of Ireland is
very stable for Air Canada to venture.
 Taxation- corporate and income taxation in Ireland
is very low. The country has a taxation rate of
12.5% (Central Intelligence Agency, 2020).
 Market regulations- the country has high press and
trade freedom hence market regulation is low.
 Economic growth- The economy of Ireland has
grown. In 2015, the GDP of Ireland exceeded 26%
(Central Intelligence Agency, 2020).
 Interest and inflation rates – The inflation rates are
low as well as interest rates encouraging Air
Canada to have access to credit facilities.
 Unemployment rates- The unemployment rates are
low of 6.7% as per 2017 (Central Intelligence
Agency, 2020).
Social-cultural factors Technological factors
 Education levels- the levels of education are high in
Ireland.
 Changing patterns of consumers- low taxations has led
to an increase in public spending.
 Population- Ireland has a population of 5,176,569. The
population growth rate in Ireland is 1.04% (Central
Intelligence Agency, 2020). The urban population
accounts for 63.7% of the total population (Central
 Access to technologies- There is high access to new
technologies in Ireland.
 Rates of innovations- The innovation rates are also
high with companies like Amazon and Google
succeeding in the market.
 Research and development- Ireland has a moderate
rate of Investment in Research and Development

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Intelligence Agency, 2020). Increase in population is an
opportunity for Air Canada.
PEST-C Analysis of Brazil
Political factors Economic factors
 Political stability- Brazil have had some political
tensions in the last decade. However, the country
has restored its stableness.
 Taxations- taxation rates are high impacts the
profitability of companies operating in the country.
 Market regulations- The market is not much
regulated.
 Economic growth- The economy of Brazil has
grown since 2015 and 2016 recession period
(Central Intelligence Agency, 2020). Currently, the
economy of Brazil is ranked as the eighth largest in
the world (Central Intelligence Agency, 2020). The
GDP is growing with Brazil experiencing 1% GDP
growth in 2017 (Central Intelligence Agency,
2020).
 Interest and inflation rates- The interest and
inflation rates in Brazil have declined. In 2017, the
interest rates were lowered from 13.75% to 7%
with inflation rates falling to 2.9% (Central
Intelligence Agency, 2020).
 Unemployment rates- The unemployment rates are
very high. Brazil has unemployment rates of 12.5%
(Central Intelligence Agency, 2020).
Social-cultural factors Technological factors

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 Education levels- Education levels are high with
the country having a literacy level of 93% (Central
Intelligence Agency, 2020).
 Changing patterns of consumers- The country has
experienced a change in purchasing behaviour due
to growth rates of disposable income caused by a
decline in interest rates and inflations.
 Population. Brazil has a very high population of
211,715,973 (Central Intelligence Agency, 2020).
Youths form a large of portions of the population
with ages between 25-54 being 43% (Central
Intelligence Agency, 2020).
 Access to technologies- The country has an average
level of access to new technologies
 Rates of innovations- The rate of innovation is
average in Brazil.
 Research and development of the country have an
average invested in research and development.
References
BIBLIOGRAPHY
BIBLIOGRAPHY Central Intelligence Agency, (2020). The Worldfact book. Retrieved from:

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https://www.cia.gov/library/publications/resources/the-world-factbook/geos/ei.html[Accessed 4
April 2020].
Macrotrends, (2020). Canada Literacy Rate 1990-2020. Retrieved from:
https://www.macrotrends.net/countries/CAN/canada/literacy-rate
Ward (2019). Corporate Tax Canada Guide. Retrieved from:
https://www.thebalancesmb.com/corporate-tax-canada-guide-2948056
Yüksel, I. (2012). Developing a multi-criteria decision making model for PESTEL
analysis. International Journal of Business and Management, 7(24), 52.