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. Though the passengers might not notice these aspects, it is the case that once one scratches the surface and does some research, it is clear that the airline industry is in a mess and only, radical restructuring can help revive its fortunes. Political The political environment in which airlines operate is highly regulated and favors the passengers over the airlines. This is because of the fact that the global aviation industry operates in an environment where passenger safety is paramount and where, the earlier tendencies towards monopolistic behavior by the airlines have made the political establishment weary of the airlines and hence, they have resorted to tighter regulation of the operations of the airlines.
The recent economic recession shook the entire industry. Even the airlines industry was deeply affected. Except for these economic fluctuations, both the world economy and the global airlines industry have done well. This growth rate is expected to sustain. Apart from the recession, the Asian and European economies have been affected by other harsh and mild economic declines too.
Still, the industry has continued to perform relatively well. The global forecast by Airbus for highlights that the demand is going to increase in the coming years. It forecasts that the demand for passenger and freighter air-crafts will rise. As per an IATA report, there has been a 7.
This is higher than This growth is also expected to continue. Not just this, the number of pilots needed in next 20 years exceedsEconomic factors are a major influence on the airlines industry. However, there are several other factors of importance as well.
These factors can be social, technological, political and even legal in nature. Political factors can generally vary between nations. However, the aviation industry is global and spans the entire globe. The government regulations address concerns like safety, passenger security, and several other issues.
Deregulation eliminated the regulations related to prices and entry into domestic markets. However, the situation is not the same in all the markets. In several of them, the bilateral agreements are still highly restrictive.
This limits competition and revenue. Moreover, international flights are more heavily regulated than the domestic flights.PESTLE Analysis of the Airline Industry Competitive Airlines-An analysis of the strategies followed by airlines in India with special focus on low-cost airlines Pest Analysis4/4(1).
Furthermore, with there being more competition in the industry and regulations in demand, passengers are in a position where they can push for lower prices and amenities. Economic. The 9/11 attacks left a major impact that the airline industry is yet to recover from. PESTEL Analysis of the Airline Industry Most people view airlines as flourishing businesses which make it easy to travel in comfort and convenience.
Nevertheless, there are still many challenges that airlines face.
These include very. Industry Analysis Porter’s five forces In order to analyze the industrial environment of Southwest Airlines and evaluate the nature of the competition faced by the company, this essay uses Porter’s Five Forces tool developed by Porter E.M (Porter, ).
PESTLE analysis is a strategic method through which airline companies can weigh all external factors that are affecting business.
Political Environment In most countries, there are strict regulations for the aviation industry. PESTLE analysis of the airline industry. Political Notably, policy interventions and innovations as deregulation and liberalization, recapitalization, institutional framework as well as globalization have impacted on the airline services in Nigeria.3/5(2).