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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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
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(US Airline Industry Essay Example | Topics and Well Written Essays - 2250 Words)
“US Airline Industry Essay Example | Topics and Well Written Essays - 2250 Words”, n.d. https://studentshare.org/business/1394803-international-business.
U.S. Airline Industry Analysis
Although European players dominate the aviation industry in general, majority of the large players operate in the United States.
Although this strategic amendment assisted the industry to improve the growth at its initial stages, the revenues again declined by the beginning of 1990s.
It has however been a process of several decades that has made this industry flourishing and the government has played an important role in its development. Even though the first airplane was developed in the US in the year 1903, it was not until the year 1914 when the first commercial flight took place.
Prior to the airline deregulation of 1978, the industry was almost like a cartel with very few number of airline industries serving different American states. Nevertheless, an inevitable and unexpected competition arose which resulted into a dire instability in the industry; hence, the advent of the Civil Aeronautics Board was established to administer the industry’s structure and competition.
This essay is an attempt to understand the US airline industry from the perspective of international business theories. This essay would also include a political, legal, and economic perspective of the US airline undistry today. Porter Five Forces Model and four Ps of marketing would also be used as for examples.
This paper discusses the need as well as the extent by which government should exercise control over the airline industry.
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Deregulation and privatization has changed the industry intensively. This has also contributed to increased competition among its players who are required to further enhance their services to gain better prospects.