A New International Air Transport Policy Essay

The United States carries over one third of the globe’s total traffic, where Over 1.5 billion passengers fly annually. Over the past 20 years, air travel has grown at an average of about 5% per year, the reason for annual change is usually differences in economic growth, and of course other environmental factors, such as the current war. As a rule, the annual growth in air travel has been about twice the annual growth in GDP. Deregulation, liberalization, and competition have essentially altered the management strategies and practices of airlines. Productivity improvements and cost management have been two of the greatest concerns for US airlines for the past twenty years. As a whole, the airline industry must continue to improve their specialization in terms of fleet utilization, pricing and revenue management, and schedule optimization.

To evaluate the external environment of JetBlue airways we will use the PESTEL analysis. PESTEL analysis stands for “Political, Economic, Social, Technological, Environment and Legal analysis”.

The Airline industry is a large and constantly growing industry. It facilitates economic growth, international investment and world trade and is therefore central to other industries as well for globalisation. There are various forces which lead to globalisation in airline industry. Key drivers of change are forces likely to affect the structure of an industry; sector or market. (1).

This is an analysis of the Airline Industry in Europe. The paper will cover the current market situation, including financials and market volume. Following this will be a Five Forces analysis on the factors that affect industry competition. The paper will conclude with key insights into the profitability of the industry and a SWOT analysis of one of the industry’s best performers and what rivals and possible future entrants can learn from their success.

The airline industry has been a major factor in the globalization of the world economy. It connects the sellers and the buyers as well as transports goods across countries. It also breaks the time and distance barriers. In the past, air travel was considered a luxury but it is now a common necessity.

The Airline industry today offers services to nearly every place of the globe. The following economic factors that include consumer behaviour, currency rate, purchasing power of consumers, oil price plus the inflation plays key role in deriving the country’s economy. According to (Macmillan & Tampoe 2000), Airline industry itself is a leading economic force in terms of both its effects on associated industries for example aircraft manufacturing, operations and tourism. In this regard, this paper discusses the economic factors that affect the decision, the board of Air Asia needs to consider before acquiring 10 units of Air Bus model A350-1000 to increase its fleet of long haul airplanes.

In this assignment I was assigned the task of comparing 2 different airlines, one being a full service carrier and the other being a lost cost carrier, from United States of America, namely the Delta Airlines and South West Airlines. The points of comparison were market strategies, financial benefits, load factors, contrasting yield, revenues and passenger/cargo loads. The analysis was done on the business model and a long term strategy. Through this it would be known that which airline is performing better than the other. The disruption of air travel through various incidents like the terrorist attacks and global downturn, which can be considered as economic, political and social conditions, effect airlines adversely.

American airline industry is steadily growing at an extremely strong rate. This growth comes with a number economic and social advantage. This contributes a great deal to the international inventory. The US airline industry is a major economic aspect in both the outcome on other related industries like tourism and manufacturing of aircraft and its own terms of operation. The airline industry is receiving massive media attention unlike other industries through participating and making of government policies. As Hoffman and Bateson (2011) show the major competitors include Southwest Airlines, Delta Airline, and United Airline.

The airline industry is greatly influenced by the the travel and tourism trends across the globe. The World Travel and Tourism Board states that the the level of tourism is likely to grow even as the years progress. The growth in the level of tourism is expected to grow at a level of 4.5 per cent annually. This is expected to continue upto 2017. Thus the organization should fully prepare it self and take over the tourism market.

The International Airlines industry will benefit over the next five years, as the number of tourists significantly rises up every month. Especially, there are more and more people from China are visiting Australia, which will provide Qantas with a great revenue. However, the competitors of Qantas, with low-cost tickets, can have a big pressure on Qantas and lead to decrease in price. Although, there will be a greater demand from Australians and international travellers to purchase tickets from this industry. The demand of the company is planning to rise at an annualised 1.2% over the next

The airline industry has seen drastic changes since September 11, 2001. The government ordered a complete shutdown for three days of not only all commercial aircraft but such carriers as domestic flights and emergency aircraft. For days after September 11th, all aircraft stayed on the ground. Even military aircraft had to receive special clearance to fly. In a ripple effect, the entire economy of the United States and the world was put on hold. The New York Stock Exchange shut its doors because of the attacks on the towers of the World Trade Center.

Airlines Industry is large and growing, it is also the most fiercely competitive sector. It facilitates international trade, world economy growth, tourism and international investment. The airline industry has over time with the use of modern technology been able to take advantage of the short haul, high frequency and gained a competitive advantage over other forms of travel, such as buses and railroad travel. Additionally, the airline industry still holds the market for global travel at a low cost and convenient way to travel. The aviation industry gives a good contribution to the GDP which includes the following: airline services, general aviation, civil airport operations, aircraft manufacturing, and

Airline industry is the major engine powering the globalization of businesses and services. Prior to 1970’s, the airline industry was mainly owned and controlled by the governments in different countries. There was no free market competition as travelers have to make do with the services and prices available to them from the few airlines. But with the deregulation of the airline industry that swept across the world after 1970, entry barriers were lowered allowing new start-up of many airline companies, thus engendering competition in the airlines industry. This has led to competitions in various fronts, especially in prices and services provided onboard the flight. This competition has led to formulation of various business modules and the re-strategizing of the already existing and new start-up companies, in order for them to survive the new business environment. The operating environment of the airline industry continues to evolve, thereby presenting a significant challenge for the survival of the industry. Different models and frameworks have been formulated for analyzing the operating environment of various industries. In analyzing the operating environment, it is vital to indentify the different factors that might affect the organization cost, supply and demand. PEST (Political, Economical, Social and Technological) is one of the framework used for analyzing the macro-environment affecting organizations in a

Extending flights to major hubs in Europe to use that as start off for flights heading to Asia and China etc. to mitigate risk of losing customers as a result of unplanned delays.

Literature reveals that the globalisation of the airline industry has resulted in easier accessibility across international borders. This has greatly benefited the tourism industries economic sector with a rise of foreign tourists and an increase in global competition (Dwyer, 2015). However the negative effects on the environment are vast with climate change has become a global problem. A swish study proved that out of the countries examined, 50-85% of tourism based emissions are as a result of air transport and therefore if the tourism industry is to reduce emissions, it can only be achieved through a major decrease in these environmentally destructive emissions caused by aviation (Perch-Nielsen et al, 2010).