C/B/366. An analysis of the competitive environment in which the airline industry operates, with specific reference to British Airways.

This paper explores the key issues that are in the competitive and macro environments that are facing British Airways. A PESTLE analysis was carried out which identified the macro factors that are impacting on British Airways and the airline industry. This analysis found that social factors such as changes in demographics matched with increasing affluence are creating an increase in the numbers of passengers using air carriers. It was also found that technology has presented the industry for huge opportunities for increased ease of purchasing tickets and booking in services and opportunities for reducing costs. However, this increase in technology has also enabled low cost carriers to enter the market and increase the intensity of the market. The industry is also facing difficulties due to environmental concerns and increases in the cost of fuel. British airlines are further hampered by the subsidies many other national airlines enjoy from their governments. A five force analysis was also used to analyse the competitive environment. It was found that BA operates in an intensely competitive market.