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How Do I Create a PEST Analysis for an Airline?

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  • Written By: Esther Ejim
  • Edited By: Kaci Lane Hindman
  • Last Modified Date: 09 November 2016
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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. In order to achieve this, you should conduct an investigation into the political and economic factors that may affect the airline as well as the sociocultural factors that may be an issue. The last factor to consider when conducting a PEST analysis of an airline is the technological issues that may make a difference in the success of the airline.

Political considerations are vital to the success of any airline, making them important to include 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 tourist industries tend to have a lot of flights to accommodate the needs of the numerous tourists. State-owned airlines are particularly susceptible to political changes because this will affect factors like funds for the maintenance of the aircraft, payment of employee salaries, and even the destinations of such flights. For instance, some state-owned and even private-owned airlines originating from countries listed among the hot bed of terrorist activities are not allowed to fly over the airspace of most western nations.

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An economic factor to be considered 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 assessment of the demand for products in a country. During a recession, for example, something like air travel would be placed on the lower rungs of most people’s list of priorities since 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 instance, most airlines in western countries do their best business in the summer season when the weather is warm and people are willing to visit other states or countries for sightseeing or to visit friends and families. Airlines located in countries where some of the citizens go on yearly pilgrimages to holy cities in Jerusalem and other such places may also count this as a positive sociocultural factor. Technological factors in a PEST analysis for an airline include all the changes in technology. Some examples include changes in aircraft design, navigational systems and even technological advances at the airports terminals like screening methods and check-in systems.

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