British Airways is a flag-carrier airline and aviation company. The airline brand started its aviation business in 1919. The company’s fleet size comprises 244 aircraft and it offers 244 destinations in various countries and regions across the globe. Today, we’ll discuss the PESTLE analysis of British Airways; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting British Airways
Some of the main political factors in the British Airways PESTLE analysis are as follows;
I-Government Policies
The government policies of different countries directly impact the business of British Airways. For instance, the political conflict and invasion of Ukraine by Russia have not only jeopardized the global peace. The Russian government banned all the aircraft from the Ukraine supporting and its allies countries.
As a result, all the flights of British Airways going to Russia were cancelled and it significantly decreased the sales and profitability of the company. In order to serve Russian passengers, the airline needs to change its routes and collaborate with other airlines. The tense political environment and strict government policies have increased the operational cost of the company.
II-Political Tension
The UK government asked British Airways to use the 3rd runway on the busiest airport in London “Heathrow Airport” back in 2015. It resulted in the form of strong conflict between the government and the airline due to flight delays and other operational issues. However, the CEO Willie Walsh asked the government either to clear the runway for the company, or the airline would move its business to other countries’ airports.
Economic Factors Affecting British Airways
Some of the main economic factors in the British Airways PESTLE analysis are as follows;
I-Pandemic Crisis
The pandemic crisis back in 2020 had a very bad and severe impact on the airline company British Airways and other airlines. People couldn’t book the flights due to the lockdown, shutdown of businesses, social distancing, and strict medical clearance protocol. As a result, the airline brand experienced losses of approximately 6.4 billion British pounds due to very limited sales and no air traveling services.
II-Fluctuating Fuel Prices
Just like any other airline and aircraft, British Airways needs a significant quantity of fuel to smoothly and efficiently complete their air trips and reach the required destination. The thing about oil prices is that they are highly unstable and keep on fluctuating depending on various factors. A sudden increase in the price of fuel would directly impact the revenue and profitability of the aviation company.
Social Factors Impacting British Airways
Some of the main social factors in the British Airways PESTEL analysis are as follows;
I-Economical Airfares
While planning for air travel, airfare is the very first thing that comes into the minds of ordinary customers. Ordinary working-class people don’t want to spend a lot of money on airfare, and they always prefer cheap flights. However, it allows them to save money and they could use it to cover other traveling expenses. British Airways has decreased its airfare to a great extent for economy class by including extra seats in the airline. It allowed the company to keep up with the other competitive low-cost airlines.
II-Globalization
Technological development and communication platforms have increased globalization trends. People have been traveling all over the world by working in one country and region for a while and then moving to the other country. In fact, British Airways has recently launched an advertisement promoting cross-cultural harmony and it is relevant to the growing globalization trends.
III-Buying Habits
The spending habits of ordinary customers directly impact the business of British Airways and other airlines. The consumer market is shifting towards a cost-efficient shared economy, and they don’t want to spend money on things that are environmentally unsustainable. The airline should keep in mind these trends and it helps the company to develop relevant strategies and air travel packages for customers.
Technological Factors Affecting British Airways
Some of the main technological factors in the British Airways PESTEL analysis are as follows;
I-Automation Technology
British Airways employs automated technological tools and equipment. It helps the company to smoothly perform various daily routine operations like; flight booking and scheduling, sending automated receipts to the customer, and gathering their feedback after the flight.
II-Fuel Efficient Aircrafts
British Airways is investing a significant amount of capital resources in the development of fuel-efficient technology for aircraft. The technological breakthrough would revolutionize the airline industry, and it gives the company a unique competitive edge over all other competitors.
Legal Factors Impacting British Airways
Some of the main legal factors in the British Airways PESTEL analysis are as follows;
I-Compliance with Law
British Airways should comply with the aviation rules and regulations of different countries. Any type of non-compliance would jeopardize the airline’s operation, and the particular country would ban the airline from entering the country and its airspace.
II-Data Breach
British Airways deals with a vast variety of private data of ordinary users during the flight booking and scheduling process. It imposes a great responsibility on the company to protect the sensitive data of all users. In 2018, hackers stole the data of over 500,000 users from the secure database of British Airways; the company paid a fine of approximately 20 million British pounds for the data breach.
Environmental Factors Affecting British Airways
Some of the main environmental factors in the British Airways PESTEL analysis are as follows;
I-Environmental Sustainability
The airline industry is the world’s leading cause of global warming and carbon emissions into the atmosphere. British Airways has recently taken the initiative of using sustainable fuel, and it would potentially decrease the carbon emission rate by 80%.
Conclusion: British Airways PESTLE Analysis |PESTEL Analysis of British Airways |External Environmental Analysis of British Airways | Strategic Analysis of British Airways
After an in-depth study of the pestle analysis of British Airways; we have realized that British Airways is the world’s leading airline. If you are learning about the British Airways PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economic, social, technological, legal, and environmental.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.
