Stephen Riley
Director of Flight Operations
Julia Simpson
Director of Corporate Communications
Robert Webb QC
General Counsel
Willie Walsh
Chief Executive Officer
Board
11 Members
Keith Williams
Chief Financial
Officer
2.0 Business Environment assessment: External
The external environment BA facing is turbulent. In macro-environment analyzing, external factors affecting will be identified.
2.1 PEST Analysis
The appraisal focuses on BA’s external environment.
Political
l Political ＆ policy instability
l The threats of terrorism
l The government hiked the air travel tax
l European Union legislation on carbon dioxide exclusion
l Regulation on employee rights
Economic
l The unstable oil prices
l Economy depression
l The impact from the low-cost airliners
l Air travel is demand-elastic
Social
l The opposition of Heathrow expansion construction.
l Multi-existing lifestyle effects the air-travel demand
Technological
l New Required Navigation Performance (RNP) system developed
l Updated Information system
Political Factors
The political and policy instability has led to strikes such as BA’s staffs strike case in 2007, which indicates employees’ right regulations must be concerned. The terrorist attacks happened on 11/09/2001 and 07/072005 have reduced the travelers’ confidence.
The airliners don’t have enough freedom in pricing where government interferes. The tax rising in 2007 lifts price.
The promotion of SESAR agreement (European-Union, 2008) changes the air-traffic-control style and reduces the aircrafts CO2 exclusion.
Economic Factors
Fluctuating oil prices hit aviation industry a lot. BA has shown 6.4% increase in fuel-cost in 2007/08 (British-Airways, 2008). The economy downturn slows down the global trade and reduces customers’ spending on travelling. The high elasticity in demand in this industry forces BA to be sensitive in pricing. Low-cost airliners make price competition fiercer.
Social Factors
The opposition of aircraft noisy, air-pollution level and expansion program remain constant. Globally, the different social customs in different time of year means varied business opportunities.
Technological Factors
Aircrafts hugely rely on the high-technology
