The Political And Economical Factors With Airlines

Topics: Airline, United Kingdom, British Airways Pages: 1 (294 words) Published: February 23, 2013
PEST Analysis of the UK Airline Industry
The PEST Analysis of the UK airline industry must take into account the Political Economic,Social and Technological environment in which the industry is operating in. It will alsoinclude how these environmental factors will impact on the airline operations. Political

The political stability of the United Kingdom was severely tested by the London terroristbombings in the summative years of the last decade. This led to a slight drop in the fortunesof the airline industry (Keynote, 2010). Personal air travel reduced while costs incurred bytheir airlines in their efforts to beef up airport and flight security reduced the profitability of major airlines. Other political factors that have impacted negatively on the operations of major airlines in the UK industry include recent pricing regulations laid out by the Britishgovernment, wage legislations and union requirements. Economic

Economic factors have been working in favour of the UK airline industry for a long time. Theincreasing strength of the pound against major global currencies is a boon for the UK airlineindustry. The inflationary and fluctuation tendencies of the dollar have worked to theadvantage of the UK airline industry (Keynote, 2010). However, the slowdown of thedomestic economic growth has affected the UK airline industry since it has reduced thepower of the people to use air as their preferred mode of travel. The recent global economicmeltdown hit the airline industry very hard. All major players in the UK airline industryreported massive losses during the global economic meltdown (Business Week, 2008). Someof them had to lay off their workers during the recession. The other economic factor is theincreased cost of fuel. This has impacted on the profitability of the airline industry and thesituation has been worsened by the situation in the Arab world (Done, 2011
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