South African Airways is a flag carrier airline and aviation company in South Africa. The airline started its business in 1929. The airline has a fleet size of approximately 12 aircraft and offers 15 destinations in various countries worldwide. Today, we’ll discuss the PESTLE analysis of South African Airways; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting South African Airways
Some of the main political factors in the South African Airways PESTLE analysis are as follows;
I-Political Stability
The stable political environment plays a key role in the growth of aviation businesses and companies. When there are political conflicts, violent activities, roadblocks, and processions, then travelers and visitors would avoid visiting such countries due to safety and security reasons.
II- Regulations
The government regulations are very strict for airlines and aviation companies. They deal with the safety and security of passengers and travelers, air routes, aviation industry standards and regulations, and others. South African Airways should comply with the passenger safety and air boundary regulations of different countries.
III-Government Investment
The aviation and airline industry is a profitable venture in the long term, but it requires heavy capital investment. Governments and countries invest in the aviation industry and buy the majority of shares to ensure their growth and profitability.
Economic Factors Affecting South African Airways
Some of the main economic factors in the South African Airways PESTLE analysis are as follows;
I-Economic Downturn
The global economy has been going through economic recession for the past few years. It has badly impacted the business of the airline and aviation industry due to lockdown and shutdown, air travel bans and restrictions, and other traveling protocols. As a result, it has decreased the sales and revenue of South African Airways.
II-Oil Price
The oil price market is highly volatile and it keeps changing due to various political and economic factors. The aircraft of South African Airways need a massive quantity of oil to smoothly perform their air traveling visits and operations. A small change in oil price would increase the cost and expenses, and negatively impact the retail sales, revenue, and profitability of the company.
III-Inflation Rate
The inflation rate is the key economic indicator and it directly impacts the retail sales and revenue of the company. It happens when the country and the central bank start printing more current notes, and it decreases the per unit value of all the currency notes. However, the higher inflation would increase the air ticket fares and decrease the overall sales of South African Airways.
Social Factors Impacting South African Airways
Some of the main social factors in the South African Airways PESTEL analysis are as follows;
I-Safety and Security
While making the traveling and tour plans, the safety and security of the flight are the top priority of passengers, tourists, and travelers. If the flight has a poor track record of building and maintaining the safety and security of passengers, then customers would consider other options. South African Airways should ensure the safety of passengers.
II-Hospitality Service
Hospitality service is one of the main areas of the airline and aviation industry. Customers prefer such airlines that offer top-quality hospitality service to the passengers. South African Airways needs to improve its hospitality service area to keep up with the customer needs and requirements. It would help the airline brand to attract potential customers.
III-Traveling Trends
The traveling and touring trends have been increasing significantly for the past few years. People want to travel the world, explore new places, learn about different cultures, and experience the beauty and charm of different places. South African Airways should offer various types of world tours and regional tour packages to keep up with the traveling trends.
Technological Factors Affecting South African Airways
Some of the main technological factors in the South African Airways PESTEL analysis are as follows;
I-Advanced Technology
South African Airways needs to invest a significant amount of capital resources in the latest and advanced technology. It allows them the development of safe and secure aircraft, fuel efficiency, and comfortable air travel experience. In short, the advanced technology would help the airline brand to improve the customer satisfaction level and reduce costs.
II-Tech Upgrade and Maintenance
South African Airways should allocate resources for the repair and maintenance of its existing fleet of aircraft. It allows the airline brand to ensure the smooth running and performance of the company’s aircraft fleet and avoid any type of accident and mishaps.
Legal Factors Impacting South African Airways
Some of the main legal factors in the South African Airways PESTEL analysis are as follows;
Regulatory Compliance
South African Airways should comply with the air travel regulations of different countries. They comprise of safety and security of passengers, air travel routes, license and approval, patents and rights, and others. Regulatory compliance would help the airline brand to smoothly perform its aviation operations without any delays and disruptions.
Environmental Factors Affecting South African Airways
Some of the main environmental factors in the South African Airways PESTEL analysis are as follows;
Sustainability Initiative
South African Airways consumes a significant amount of fuel and contributes to environmental pollution. The airline brand should make a strong commitment to environmental sustainability by taking steps like renewable sources of energy, fuel-efficient aircraft, and reducing waste to decrease carbon impact.
Conclusion: South African Airways PESTLE Analysis |PESTEL Analysis of South African Airways |External Environmental Analysis of South African Airways | Strategic Analysis of South African Airways
After an in-depth study of the pestle analysis of South African Airways; we have realized that South African Airways is the world’s leading airline. If you are learning about the South African 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.
