British Airways Pest Analysis

1. British Airways Plc (BA) founded in 1974, was in the control of government for thirteen years and went into privatization in 1987. The industry operates about 240 aircrafts, serving about 120 destinations throughout the U.K and Europe including the Middle East, Africa, South and North America, Asia and the Pacific. British Airways competes with various other airlines in the industry but still it has maintained its domination in various parts of the aviation industry in the United Kingdom and Europe as well. Its major competitor is Virgin Atlantic, with 10 percent market share in the airline industry in terms of kilometers logged in 2007. As the airline industries are struggling to survive in this Global Economic Downturn, which saw a huge decline in the number of passengers and flights over the years, British Airways future looks very promising. The Airline announces its aim in its latest annual report (British Airways, 2008) of becoming ‘World’s most responsible airline’. The Economic Environment in which British Airways is trading is very complex and dynamic in nature. This particular area doesn’t remain the same, it always keeps on changing from time to time with the changes taking place in an economy like hike in fuel prices, change in political situations, government policies etc. The economic policies of BA are enormously influenced by the economic conditions of an economy. Any development in the economic conditions such as distribution of income, rise in the standard of living and purchasing power of the public, demand and supply etc. Hugely influence the airline industry. PESTL analysis is a useful tool for understanding market growth or decline, business position, potential and directions for operations (Kotler, 1998).

PESTL Analysis of British Airways:

A) POLITICAL * Deregulation as the size of the market increases, causing economics of scale to increase. * Heavy Regulations (AEA, 2009). The Association of European Airlines charged