However, beneath the veneer, the airlines worldwide are caught in a cycle of higher operating costs, lower profits, and decreasing margins because of the various factors discussed in this article.
It has gone through many ups and downs in the past. Airline industry is particularly sensitive to law and order, economic situation, that has resulted in difficult situation for commercial airline despite increasing popularity growth of air passengers. Shankman, This report is based on analysis of Political, Economical, Social, Technological, Legal and Ecological factors that may affect airline industry.
Political Factors There are number of different political factors that are currently affecting the airline industry like: The number of people travelling to other countries is decreased due to fear of their safety and security, iata.
However different governments around the world are investing heavily on making new airports and expanding the existing ones, to be able to handle larger number of air travellers.
These investments are an effort to make their country as preferred destination for not only passengers but also airlines to stopover. There were million passengers travelled by air in European Union in that was 4. Many countries are allowing visa free travel to citizens of specific countries that is resulting in growth of air travel.
Economic Factors Airline industry is highly dependent on economic situation.
The economic instability has resulted in increased demand of low cost airline like Ryan air and Easy Jet etc. Timms, Many airlines gone through difficult times due to effects of down turn.
Furthermore increased fuel prices also resulted in increased costs of operations that lead many airlines to adopt different strategies to reduce their operational costs. People around the world are now becoming more used to low budget airline and their business is grooming.
The economic down turn and increased fuel prices has taught many valuable lessons to airline industry like to ways to survive in tough economic conditions, becoming more productive and reducing costs.
Currently fuel prices are at its lowest point of last decade and that is helping many airlines to not only recover their losses but generate profits too. Furthermore the growing income of middle class in different parts of the worlds with decreased costs of air travel with the time that has increased affordability of people.
As result tourism is becoming larger and more diverse customer market.
Shankman, Globalization has resulted in cross border expansion of businesses that has resulted increased travel of CEOs and business managers.
This trend is expected to increase further with the time. The maiden age of air travellers is increasing that mean many older people prefer to travel by air due to different reasons. That means there will be growing number of older passengers who will prefer air travel for shorter distances for increased comfort.
Especially increased use of internet has made it possible for customers to purchase tickets from their homes. Furthermore the ability and access of airlines has increased as passengers can get latest information about airfare and travel.
Shankman, Many airlines are increasingly making use of technology to facilitate their customers for example Airlines has introduced mobile phone applications to facilitate customers.
Furthermore social media has made it easy for airlines to interact with customers. The Aero planes are becoming more fuel efficient day by day helping airlines to reduce travelling costs while new technology has also enabled airlines to introduce more safety measures.
Legal Factors Many countries had introduced different rules, regulation, and quality standards for airlines in order to ensure safety and security of passengers.The SWOT analysis for Singapore Airlines presented below analyzes the internal and external environmental factors such as Strengths, Weakness, Opportunities and Threats by incorporating its results and the outlook for SWOT analysis on American Airlines focuses on the strengths that have enabled it to reach where it is the weaknesses that it has, opportunities that come its way and the threats that the airline has to counter.
PESTLE or the External Environmental Analysis of industries and companies that operate globally is a useful methodology to analyze the external environmental factors.
This article uses the PESTLE methodology to analyze the global aviation industry or the airline industry. The key theme in this article is that global airlines are going through what can be called the “Airline Death Spiral.
Pest Analysis: American Airlines Essay Analysis of the Airline Industry Parameters of the Industry American Airlines is a subsidiary of AMR Corporation and one of the leading airlines in the U.S.
A Competitive Analysis of Airline Industry: A Case Study on Biman Bangladesh Airlines Competitive Advantage, SWOT Analysis, PEST Analysis, Airlines, Airline Industry.
I. Introduction Grant states that „when two or more firms compete within the same market, one firm possesses a. Free Essay: Analysis of the Airline Industry Parameters of the Industry American Airlines is a subsidiary of AMR Corporation and one of the leading airlines.