Pest Analysis Of The Airline Industry

Introduction

This report is about the American airlines industry and its market share, competition, and including the future prospect of the United States of America. The airline industry is a large growing in transportation industry, and it has contributed to consumer’s lifestyle, and has the most impact on traveling culture, and improves quality of customer’s life by broadening people’s leisure and cultural experiences. Air travel also provides a lot of advantages to tourists who love to travel to many places for either vacation or business trip, and airline is only a transportation that provides convenient, comfortable, and faster for travellers to search their destinations (Massachusetts Institute of Technology, 2014).

Recently, many

This is because, the airlines have various products and services to offer. Such products and services are often aimed towards consumer satisfaction and for providing them with the quality often related with an airline standard. Services such as providing the consumers the opportunity to hold ‘Mileage Business Cards’ where- the more loyal a consumer is towards the specific airline, the more gift cards he/she can obtain. Some airlines such as the US Airways provide their travellers with the chance to get a VIP baggage delivery service. Also, the opportunity to be part of the clubs and lounges can act as an incentive for the travellers (www.usairways.com,

After that day, many consumers flew less for business and leisure. As a result of this shock, the airline industry came face to face with increased merging of various companies and a huge phase of bankruptcies. This went on for a while until the sector was able to regain its financial footing. When various companies came together, it led to multiple advantages. Firstly, it reduces the operating costs and raises income through higher fares. Putting all the issues together, the decline in consumer demand was caused due to a rise in oil prices, which normally comprises of around 30% of an airline’s operating cost. This expense puts a huge burden on US commercial airline companies. Some companies such as Southwest had the prudence to acquire low fuel prices using hedging strategies, but most airlines, including the two largest by revenue passenger miles--American Airlines and United Airlines--have no hedging strategies in the foreseeable future and will suffer the most if oil prices continue to rise (www.wikinvest.com,