British Airways

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British Airways

1.1 External economic factors

Consumer demand
Consumer demand is basically an economic and social order, which means there is a very high demand from consumers to purchase businesses services and goods. A lot of people are interested in buying goods and services from that business in greater amounts. Which will make the business not only grow, but they will also use that to their advantage by making some changes. For example, if there is a high consumer demand for British Airways Services, then they can increase the prices for the tickets in order for passengers to travel with them. High demand can equal high prices. This happens a lot, mainly because the product becomes a necessity for consumers, also if British Airways reaches the desires of the consumer, then the demands will be much higher than before. With more demands, British Airways can increase their capacity, also being committed to make some investments, such as bringing in new and more efficient aircraft.

Rates of interest
An interest rate is a rate which is paid or charged for the use of money and it also can rise depending on how the economy is doing and it also affects everyone, For example, if there is a high consumer demand for British Airways services then the interest rates will increase in order to push prices back down and also slow down the growth of the business. British Airlines can also suffer with the increase in dept and that could make the Airlines go out of business and if the interest rates continue to increase then British Airlines would have to payback an even higher amount depending on the interest rates. It can also increase the costs of parts that are needed to make and aircraft, the fuel costs that is needed to run the Aircraft would increase, they would have to adjust the pricing in order to keep the fuel costs low.

Competition
This is a rivalry in which the seller is seeking what the other seller is seeking, for example, profit, sales and also providing the best practical combination of price service and quality, competition also balances the demand and supply. For example, British Airways has competition, they may want to decrease the price in their services in order to get the advantage on their competitors and to attract more customers. If there is a lot of competition, the profit that the Airlines are making would go down. Competition can make the services that British Airlines provides better by working harder to meet customers needs.

Recession
A recession is a general economic decline which means can mean many things such as an increase in unemployment, drop in the stock market and it also includes a decline in the housing market. Most of the blame mostly falls on the whole administration, the President, Federal Reserve and also on the Federal leadership. This can also affect business such as British Airlines, for example, the employees that work for British Airlines may demand a higher salary, consumers may intend to spend less on Air travel because it might be too expensive for them, interest rates would go down, and the number of passengers would also decline.

2.1 Political and Legal factors
Government policies can affect British Airways in many different ways, for example, increase in tax for airline tickets which will increase consumer price and that will affect British Airways and also affect consumer demands and also employees may go on strike. In addition, other policies such as consumer protection legislation which basically means that British Airways would have to limit the landing time due to weather delays for the safety of the passenger, which will decrease revenue and the flight cancellation rate would be much higher. Legalisation can be forbidden items carried on British Airways by passengers and crew that could include explosives and other forbidden weapons and these legalisations that are being made may affect the consumer and they would choose a different...
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