A PEST analysis of an airline deals with the political, economic, social and technological details of the company.
The way to create a Political, Economic, Social and Technological (PEST) analysis for an airline is to apply the fundamentals or principles of the PEST strategic business planning tool to the airline in question. To achieve this, you need to conduct research on the political and economic factors that may affect the airline, as well as the socio-cultural factors that may be a problem. The last factor to consider when performing a PEST analysis of an airline is the technological issues that can make a difference in the success of the airline.
Some PEST analyzes include technological advances in airport terminals.
Political considerations are vital to the success of any airline and it is important to include them in a PEST analysis for an airline. Any country with an unstable or repressive government will not have many visitors, which will translate to fewer flights and less profit. Airlines located in countries with vibrant tourism industries tend to have many flights to meet the needs of numerous tourists. State airlines are particularly susceptible to policy changes because they will affect factors such as funding for aircraft maintenance, payment of employee salaries and even the destinations of those flights. For example, some state-owned and even private airlines originating from countries on the terrorist activities list are not allowed to fly over the airspace of most Western nations.
An economic factor to consider in a PEST analysis for an airline includes an analysis of the business cycle in that particular market. A business cycle refers to the quarterly evaluation of the demand for products in a country. During a recession, for example, something like air travel would be low on most people’s priority list, as it would be considered a luxury.
Sociocultural factors in a PEST analysis for an airline include the social, religious, and cultural habits of the people who use the airline. For example, most airlines in Western countries make their best deals in the summer season when it is hot and people are willing to visit other states or countries for sightseeing or visiting friends and family. Airlines located in countries where some of the citizens make annual pilgrimages to the holy cities of Jerusalem and other similar places may also see this as a positive socio-cultural factor. Technological factors in a PEST analysis for an airline include all changes in technology. Some examples include changes in aircraft design, navigation systems, and even technological advances in airport terminals, such as screening methods and check-in systems.