Competitive Strategy

ANALYSIS OF THE BRITISH AIRWAYS STRATEGIC POSITION IN THE GLOBAL AIRLINE INDUSTRY

APPENDIX A: PESTLE ANALYSIS OF THE MACRO ENVIRONMENT OF AIRLINE INDUSTRY

Key Points |

1. Political * Heavy regulation (30). [T] & [O]. Increased tax on airline tickets (17). [T] * Restrictions on immigration [UK-5%, Japan-14%, Italy-42%] will reduce passengers (5). [T] * Increased security due to past terrorist attack and recent threats of attack (4). [O] * Deregulation in most countries such as EU and US open skies agreement (12) & (19). [O& T]. |

2. Economic * High fuel prices accounting for 34% of industry costs 2007(20) [T] * High labour costs [minimum wage] in UK £5.85, US $7.25 (5 &17). [T] * Global economic recession - premium and business traffic (25)[T] * GDP growth 2.9% (2010) (7) Europe expected to grow by 3.4%, Asia 8.7% (16 & 20). [O]. * 2009, overseas holidays fell by 14.5% to 38.9 m (10). [T] * strengthening of the dollar (IMF, 2009) (17) * Recovery of US airline industry: The industry is expected to recover in 2010, posting strong growth thereafter (FAA) (20). [O] Sharp drop in world trade - Cargo( 17) |

3. Social * Demography changes-developed countries have high aging people willing to spend time on leisure activities such as travel (18). [O] * Unemployment and lack of job security: leads to consumers avoiding expensive leisure flights like (16). [T] * 24.5 m adults now see holidays as a ‘luxury’, up from 19 million in 2007(23). [T] & Change of customer taste. * Diseases like SARS, Swine Flu reoccurring [T]. * Private Capital flow is shifting: Asia up in 2009 by 44% to 236.3 billion while Europe flows fell from 267.4 b (2008) to only to 20.3 billion(2009)(5) [O & T]=competition [Asia] (5) |

4. Technology * A recent survey revealed that 34% of online consumers plan to use price- comparison sites more in 2009 (NMA, 2009). [T] * Online booking services and...