A number of aspects of the political environment clearly impinge on business activities. These range from general questions concerning the nature of the political system and its institutions and processes to the more specific questions relating to Government involvement in the working of the economy and its attempts to influence market structure and behaviour. Government's activities and Government can be seen a the biggest business enterprise at national or local level. Given the globalisation of markets and the existence on international trading organisations and areas, international polio-economic influences on business present one key feature of the business environment.
The airline industry is subject to a considerable degree of political environment i.e., political uncertainty, government's competition policies, policies aimed at protecting the natural environment, pressure groups, regulations on airlines industry etc. In this assignment British Airways (BA) is taken as an example to illustrate this argument.
Political factors have a direct impact on airline industry. - conflicts of loss of confidence in mode of transport can damage the airline industry at a stroke. So can the incidence of terrorism and political unrest. As a result of 11 September attack, BA had to cut routes by 10%, impose a pay freezes, announce 7000 layoffs. It has suffered an unprecedented 32% drop in passengers travelling to America in September compared with a year ago, losing £40million. .
Competition policy in the UK is well established. It dates from creation of the Monopolies and Restrictive Practices Commission in 1948 and includes further more major legislation such as Fair Trading Act 1973 and the Competition Act 1980. Many different authorities are involved in the implementation of these Acts. These include the Office of Fair Trading (OFT), the Monopolies and Merger Commission (MMC).