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US Airline Industry - Essay Example

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The US Airline Industry is one of the most renowned industries in the world. As it continuously gain familiarity, it is highly considered one of the best areas to understand business especially using the international business trade theories. …
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Download file to see previous pages In this paper, the proponent tries to critically evaluate the US Airline Industry using the key frameworks of International business. PESTLE Analysis The US Airline Industry substantially needs a macro-environmental analysis from time to time. The PESTLE analysis could sufficiently provide macro-environmental understanding of the business environment of this industry.
As a macro-environmental analysis, the PESTLE analysis is composed of important factors such as politics, economic, social, technological, legal and environmental which have the capacity to affect and alter business at a significant level (Haberberg and Rieple, 2008). Politics The US Airline Industry belongs to a highly political scenario. The very proof was the revolution from regulation to deregulation scenario in the industry. It is highly political in the sense that competitors are trying to influence the government’s decision in order to come up with their competitive advantage in the industry. Competition was a central focus in this case because the industry is substantially composed of varying investors who would want to try to reach specific level of competitive advantage. However, the government’s political power also has important implication on the prevailing US Airline Industry. ...
and price-sensitive customers, based on the case, poor economic condition of the country substantially affects the prevailing status of the US Airline Industry. This resulted to poor achievement of profit within the industry. Deregulation resulted to the formation of many airlines which also finally end up with overcapacity and eventually net losses for the industry (Vasigh et al., 2008). However, economic downturns have proven effective contributing factor that substantially affect the profitability of the US Airline Industry. In 1990s the US experienced downturn and this was further aggravated by political uncertainty due to the Gulf War and surging fuel costs (Vasigh et al., 2008). This resulted to poor economic performance within the US Airline Industry. In 2008 to 2009, passenger volumes around the globe dropped as an upshot of the economic crisis associated in these years (Rosenberg, 2010). This substantially proves that the US Airline Industry could be highly affected by the prevailing economic condition of the country and it could be severely hurt at some point for as long as the financial stability of passengers is concerned. Social Another important factor affecting poor profitability within the US Airline Industry is the existence of price-sensitive customers. However, this can only be just among of the major drawbacks of other important factors such as economic in particular. It is also important to understand profitability within the context of social understanding and the prevailing status of the US Airline Industry within individual organization. The US Airline Industry is one of the highly unionized industries in the US with more than 70% eligible employees of major airlines belonging to union (Belobaba et al., 2009). This has substantial implication ...Download file to see next pagesRead More
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