British Airways: Business and Economic Environment Analysis Report

This report analyzes the business and economic environment of British Airways, a major player in the tourism industry. It begins with an introduction to the economic environment and its impact on businesses, followed by an overview of British Airways and its operations. The main body of the report delves into the structure of the tourism industry and utilizes the STEEPLE model to assess external factors affecting the airline. It examines micro factors influencing demand and supply, market competitiveness, and challenges faced by the company, including the impact of the pandemic. The report discusses the application of digital media marketing, the impact of economic and political factors such as Brexit, and the importance of ethical and legal considerations. The conclusion summarizes the key findings and emphasizes the importance of strategic planning and customer-centric approaches for sustained success in the competitive airline market. The report also references various academic sources to support its analysis.

Understanding the
Business and Economic
environment The
Tourism Industry

Contents
Introduction......................................................................................................................................3
Main body........................................................................................................................................3
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

Introduction
The economic environment means all the factors of economy that affects the commercial
and consumer behavior which influence the buying habits of the customers and companies
therefore it has an impact on the operations of the business organisation. The term business
environment means all the individuals Institutions and other forces that are outside the control of
the business enterprise but have an effect on the operations of the business (Chen, Lin and
Chang, 2017). These factors can be either large scale or small scales. This essay reports talks
about British Airways which was founded in 1974. The headquarter is situated in London. The
company is dealing with the services with respect to the tours and travels. The company has
expanded it services into the Global with the help of digital media marketing. The report is being
discussed about the structure of the industry and STEEPLE model is used to determine the
external factors. Further, the micro factors which affects the demand and supply of goods and
services. Competitiveness of a market and its impact on the business is discussed. Lastly, the
problems are discussed which are faced bunches company during the last year's.
Main body
Tours and travellism is is a business where the companies use to attract their customers
with the help of providing accommodations and entertaining tourists while operating the tours.
The British Airways is the Flag Carrier airline of the London. It is the second largest in terms of
fleet size, international flights, and international business UK based career Airlines was founded
in 1974. The company has very strong business trends but in this pandemic situation the Airways
has produce their employees by 12000 jobs. It is expected while seeing the current scenario that
it will took several years to return to the previous performance and level of profitability (Chen,
Suntikul and King, 2020).
STEEPLE MODEL is used to determine the external factors which affects the operations
of the company. Social factor includes the demographic changes which are playing and
significant rule in the contest of the aircraft industry. British Airway not only maintained the
customer experience but also focuses on the operations and impact on the social image. In this

pandemic situation the company has already hit the industry hard where several airports are shut
down and the fly be stopped its operations which has an major impact on the company.
Technological factors has driving the growth of the airline industry this helps the industry
to increase the fuel capacity and safer design the aircraft with the evolution of better sales and
service. The Technologies has helped in the faster growth of the industry in the worldwide. The
Digital Technology has also added the Airlines so that the customers can easily reach to the
company which ensures the higher efficiency because of the better services and enhance the
profitability (Kim and Shim, 2018).
Environmental factors have an impact on the airlines industry as it is Central e concern
for the regulatory authorities around the world. British Airways has taken many steps to
minimise the environmental impacts on the business for attaining more sustainability (Mitchell
and Shannon, 2018). Economic factors these are the factors which have a direct impact on the
business due to the change in the situation of an economic condition or the region has a direct
impact on the profitability of the enterprise. The British Airways has faced lots of issues due to
the uncertainty cost to by the Brexit which resulted in the slowdown of the economic conditions.
Due to this many companies has shifted their headquarter from UK to European Union. This has
resulted in the slowing economic growth and enhance unemployment rate in the economy.
Political factors plays an important role in increasing the aviation industry as it includes
the role of political stability in the enhancing growth, the role of and policies of the government
in terms of attracting the market and creating in new business as friendly environment. The
British airline is specially affected to the large extent by the policies of the government which
has a major impact on the revenue in business. Legal factors these are the factors important for
the entire aviation industry. The British Airways may be affected by the non compliance of the
rules and regulations which are made by the authority can be resulted in huge amount of fine and
may demolish the reputation of the company (Sokhanvar, Çiftçioğlu and Javid, 2018). The
company has to follow every norm such as customer convenience passenger security and
environmental impacts labor and many more with respect to their operational areas. The
company has to follow both domestic and international law's. Ethical factors these are the factors
which include the individual value system, up-bringing educational, religious believes,

experiences and many more. The British Airways uses such factors to influence the ethics in the
public administration system.
Economical factors can be divided in into more factors such as microeconomic factors
and macroeconomic factors. Micro factors includes the factors which has an instant area of the
operations touching their routine and decision making freedom (Kallmuenzer and et. al., 2019).
These factors include the competitors, consumers, distribution channels, suppliers and the
community. These are the factors which have an impact on the performance of the businesses in
several ways and to overcome with this the company used to develop different strategies which
will be helpful in effectively operations and helps in getting financially support. The customers
are considered as the most important factor in the macro-economic because they are the one
which have and major impact on the business. The good business is been because of the
customers only. Macro factors mean the external environment which has an impact on the
operations of company. These factors include economic factors, technology factors, demographic
forces, natural and physical forces and many other forces. These forces are not in the control of
the business organisation. To have a less effect from these factors the company used to
constantly track the changes in the factors and develop the appropriate strategies in order to
overcome with such factors.
The economic downturn will typically occurs when the inflation proliferates, it is when
the customers have less amount of cash to invest in the product has end up with more amount of
price this will be resulted in downfall in the demand of the products. S the customers have less
cash to invest in the supply starts go beyond the demand in the market (Serra-Cantallops and et.
al., 2018). This will triggers the company to produce fewer amounts of their products due to the
fewer sales. The unemployment that resulted from this develops a scenario where the customers
do not rely on the market and stop investing in products. The low cost budget Airlines such as
Ryan air have done comparatively well while producing profits in the market. This company
used to provide inferior goods to the targeted customers so that the low income customers can
also avail their services which will enhance the profitability of the enterprise by providing the
affordable services to their targeted customers.
There are several companies in the competitive market which are providing sem services
to the targeted customers. The British Airways has phased different challenges like globalization,

Information and Technology, social and cultural factors and so on. The economic system helps
the company to determine their plans for their services of goods in an appropriate way to carry
out their business. The British Airways used to operate their business in the mixed economic
system as it is the company which was privatized in 1987 and the government has less
intervention in the company which helps the company to there pricing strategies accordingly
(Serra-Cantallops and et. al., 2018).
They are several problems which were faced by the British Airways in this pandemic
situation the company has failed to provide the contactless services to their customers which
dissatisfied their clients by the services. The passengers had to end your cancellation delays and
long trees at airports as the airline has suffered its third major computer failure before 2 years.
The company also has been penalised of $ 230 million in the last month for the loss of data of
many customers and treated as a breach of privacy. The company has faced many issues in
solving the problems of their customers with respect to delay in the flights (Mitchell and
Shannon, 2018). The customer also has faced an issue wine checking in online and has complaint
many a times to the customer service desk for resolving the same issues but the company has
failed in solving the issues.
Conclusion
From the above easy report it can be concluded that, the British Airways has developed
their company in such a way that will be helpful in sustain their position in the market. The
company has developed such strategies in order to determine the external factors which have an
impact during the operations of the company. Further, the company has to develop the different
techniques in order to resolve the different issues faced by their customers. This will be helpful
in developing the good brand image in the market.

References
Books and Journals
Chen, C.M., Lin, Y.L. and Chang, T.T., 2017. The effects of macroeconomic and weather
conditions on the business cycle of Taiwan’s adventure tourism. Current Issues in
Tourism, 20(5), pp.447-454.
Chen, Z., Suntikul, W. and King, B., 2020. Research on tourism experiencescapes: The journey
from art to science. Current Issues in Tourism, 23(11), pp.1407-1425.
Kallmuenzer and et. al., 2019. Entrepreneurship in tourism firms: A mixed-methods analysis of
performance driver configurations. Tourism Management, 74, pp.319-330.
Kim, N. and Shim, C., 2018. Social capital, knowledge sharing and innovation of small-and
medium-sized enterprises in a tourism cluster. International journal of contemporary
hospitality management.
Mitchell, C.J. and Shannon, M., 2018. Exploring cultural heritage tourism in rural Newfoundland
through the lens of the evolutionary economic geographer. Journal of Rural Studies, 59,
pp.21-34.
Serra-Cantallops and et. al., 2018. Progress in research on CSR and the hotel industry (2006-
2015). Cornell Hospitality Quarterly, 59(1), pp.15-38.