With this growth have come numerous social benefits that are paired with ever increasing threats to societal health and wellbeing, damaging the environment we live in and the air we breathe.. Analysis 1 of the global air transport industry shows that airlines are facing a loss of $84.3 billion in 2020. The financial impact of COVID-19 has been huge to the aviation industry. Airline companies alone have had to spend a great deal of time and money revising their policies, procedures and prices to accommodate the ever-changing influences of their customers over the years. Legal Factors. Two important macro-environmental factors that may affect an organisation in the airlines industry are Economic and Technological factors. Fuel price: In general, fuel price always plays an important role in the world economy. The other economic factors that are deliberately affecting the growth of the sector are global recession, slowdown, and fluctuations in the prices of the oil. It can create a lot of risk for the emirate airlines. The airline industry has contributed to the globalization of the world economy. Political Factors . The political situation includes wars and various economic situation going on in country. Another externality affecting the aviation industry is the issue of noise regulation. One key segment that companies have been looking at is jet fuel. Airline industry can easily get affected by any political change which shows that the industry is sensitive in nature. Political and legal factors that impact the airline industry. Delta is taking on a number of important legal and government challenges facing the airline industry, from a U.S. Department of Justice inquiry into alleged collusion to a proposal to privatize the nation’s Air Traffic Organization. Some of these such as the price of fuel and oil can be predicted, while some of them cannot. "Political Legal Factors That Affect The Airline Industry" Essays and Research Papers . In this section, a detail analysis of these environmental factors affecting the airline industry will be carried out. The airline industry is widely impacted by regulations and restrictions related to international trade, tax policy, and competition. The effect of globalization on airline markets .....9 5. Economic Factors - These factors represent the wider economy. No matter travel or business, more and more people chose airplane to travel which is due to its time-saving and security. In 2006, the global airlines industry suffered a net loss of $500m3or 0.1% of revenues, accumulating net losses ... (Philip Kotler, 1999). This is particularly true in the European Union where Ryanair primarily operates. Further analysis is now showing that airline passenger revenues could fall by as much as $419 billion. Extended recession and increasing oil prices are the other major factors affecting the growth of the airline industry. may hinder or enhance the operati ons of air transport (Heracleous et al., 2009). Coronavirus will affect the airline industry for years to come – but not all of it will be bad. Part 4 - Changes in the US airline industry’s competitive landscape. In 2011 alone, over 2.8 billion passengers were transported by the world’s airlines. Following is PESTEL analysis which helps to understand the industry situation and determine the factors affecting growing business. Political and legal factors. E-commerce program was launched in 1996. Fiscal policies such as excise taxes on airline tickets increase consumer prices, and that affects demand. March 2008, provides the legal basis for cooperation with respect to competition issues in the air transport industry between the European Commission and the United States Department of Transportation. That is the reason why either increasing or decreasing of fuel price affect deeply on airline industry. For this purpose, cross-sectional data analysis was applied, and the test was performed on Turkey and EU. Airline industry is very prone to the political factors as government is always try to keep the passenger’s safety the utmost priority. PESTLE or the External Environmental Analysis of industries and companies that operate globally is a useful methodology to analyze the external environmental factors. When the low cost flights are available then most of the people will like to travel by air and it will not remain a luxury for the people (Konstanty Kasprzyk, Lavinia Andrei, Marcel Reinders & Ruxandra Pana, 2009, P.51). The players in the industry must follow all the rules and regulations that affect … Environmental Analysis The competition between businesses within the textile and clothing industry has always been steep. 471 - 480 of 500 . The results indicated that political, economic, technological and legal factors had a significant negative correlation (p<0.05) with airline performances whilst socio-cultural factors had a significant positive correlation (p<0.05) with airline performances. The study examines the relationship between aviation demand and economic factors affecting it. Political issues are very relevant in the airline industry which has been and still is under political influence. Legal Factors The Emirates Airline together with the rest of the airline industry is greatly influenced by restrictions and regulations that are related to tax policies, international trade, and competition. Biometrics will have an increased presence in airline operations during the next decade. The key external factors that affect the passenger airline industry are the economic growth, level of employment, disposable income, fuel prices, political stability, and trade regulations. Therefore, more and more airline … Legal&Ethical. Legal factors are more or less the same as political factors. Another fearful example of the negligence of the industry is the disappearance of the Malaysian airline. The airline industry is infamous for difficulties in maintaining profit margins amid a number of internal and external factors that consistently threaten to throw them off balance. Course: ... Industry Analysis A. This article uses the PESTLE methodology to analyze the global aviation industry or the airline industry. Stage 2 – Audit environmental influences The Pestel Analysis is employed to identify macro-environment influences of the airline industry. Social factors have a profound impact on businesses, as well as the overall marketplace. Singapore Airlines Analysis. The aviation industry is a rapidly growing sector of the economy. TRENDING. Certain legal, regulatory and business settings are needed to support industry development and economic growth. SINGAPORE INTERNATIONAL AIRLINES Air travel remains a large and growing industry.Despite being plagued by several factors such as overcapacity, commoditization of offerings and cutthroat rivalry to name a few, it facilitates economic growth, world trade, international investment and tourism. It connects buyers and sellers. - Identify key external factors that affect the passenger airline industry and explain how that impact occurs. 1. These decisions will likely have a lasting impact on Delta, the industry and its … It is not only about the customers for which government can affect the Company business but also if the country from where it is based has any rivalry with the country where it wants to operate. Part 3 - Why political and legal factors impact the airline industry. It is divided into six major factors: political, economic, social, technical, environmental and legal factors (John Tennent & Graham Friend, 2011). Airplane becomes a popular transportation in recent years. They include issues like terrorism and The Political, Economic, Social, Technological, Environmental, and Legal (or PESTEL) framework covers the six external factors that impact the airline industry. Based on current trends, the operating margin for US airlines is expected to narrow to between five and six percent in 2019 — a margin that is less than 40 percent of the industry’s peak of 15 percent in 2015. American Airlines Group Inc. can use country’s economic factor such as growth rate, inflation & industry’s economic indicators such as Major Airlines industry growth rate, consumer spending etc to forecast the growth trajectory of not only --sectoryname-- sector but also that of the organization. It is easy to see that fuel and airline are complements. The recent economic as … Some factors, such as legal action and customer demand, also have influence on them. Consumer protection legislation requiring airlines to limit tarmac time during weather delays increases the flight cancellation rate, decreasing revenue. Factors Affecting The Airline Industry 1330 Words | 6 Pages. It does not take any position that … Government policies directly affect the airline industry. In the spirit of Annex 2, this report was prepared jointly by the staffs of the European Commission and the United States Department of Transportation. The airline industry was affected by this because they were the ones that had to cover costs of these improved security measures. There are three factors that cause financial problem for airline industry: fuel price, interest rate, currency rate. External factors that influence the airline industry. If there is change in the demographics of the European Union, it can affect the airline industry. So, this PEST analysis for airline industry has highlighted four important factors that are affecting its external macro environment. The government thinks that growth of electronic commerce depends on transparent and market favorable legislations and regulations. $419 billion. PESTLE stands for Political, Economic Socio-Cultural, Technological, Legal and Environmental. As 2019 draws to a close, there have been many breakthroughs in technology to assist aviation markets. Introduction: The September 11 attacks left a major impact that the airline industry is yet to recover from. Airports are known for their noise because aircraft engines have to burn a lot of fuel in order to take off from their respective destinations. John Paul Van Wert/Delta Airlines via Flickr. As society changes, so must the business if it intends to thrive in the market. EXTERNAL FACTORS THAT AFFECT CHINA AIRLINES INDUSTRY Gong Liting (Jacqtin) With the development of the society, the level of people living standard has improved a lot. 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