External Environment Analysis of Airline Industry free essay sample

Demographic 1. Age Elders aged 50 and above tend to have more time to travel around with their friends as they had already retired. The time is more flexible comparing with young generation-working groups and students. Working groups and students can only travel during holidays. 2. Education When the people are more educated; they have the ability to get more income. Therefore, they will be more affordable to travel. 3. Occupation Employees who work in multinational company often travel to other countries for the business purpose could be the important customer in airline industry. 4. PopulationHigh interest rate in a country encourages people to save money in the bank to gain a high interest return. People will travel less when the interest rate is high; inversely, people will travel more when the interest rate is low. 5. Gross Domestic Production (GDP) High GDP indicates high income of a country. People will likely travelling when their country has a higher GDP. We will write a custom essay sample on External Environment Analysis of Airline Industry or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Social cultural 1. Races People will travel back home country to celebrate their own festivals such as Deepavali, Christmas, Chinese New Year and etc.Thus, it increases the sale transactions for airline industry during different festivals. 2. Exchange of sociocultural Nowadays, people tends to exchange sociocultural through networking. Hence, they also invite friends to visit their home countries. For instance, student from China will invite friends in Malaysia travelling in China. 3. Weather/ Season The various weathers/ seasons around the world prompt the visit from other countries. For example, Malaysian attracted by the different season in European as Malaysia is a tropical country. 4. Changes in lifestyleIn pace with the improvement of lifestyle, people incline to travel instead of striving to save money to guarantee their future in the past forty years. Political/Legal 1. Fuel subsidy Fuel subsidies provided by government will affect the price of airline tickets. Malaysia Government cuts the fuel subsidies will increase the cost of travelling. Hence, it will reduce the demand for airline services. 2. Flight requirement Government participates in regulating airfares range and sets flyable destination for airlines in order to control the competition.For example, in order to operate airline business, AirAsia Airline, MAS Airline and other airlines have to meet certain flight requirement. 3. Government requirement Every country has their own requirement to the immigrants or tourists. For example, it might be difficult to get a working visa or travelling visa of United States as the government sets policies. This reduced tourists from visiting United States. Technological 1. In-Flight Technology High-tech device provided to passengers is one of the issues that may influence the airline industry.For example, power outlets, in-flight internet, satellite phone services are provided by United Airlines to the passengers, especially business passengers will increase the interest of consumers. 2. Websites Internet is an essential tool of browsing and accessing information. The services such as online-booking, checking-in online, check flight available time online and etc. are the basic facility that an airline must provide to their passengers. 3. Modern AircraftIn order to provide comfortable seats to passengers, the model of planes should be keep modernized. It may also load more passengers with modern aircraft. Global 1. Health Issue Health issue in a country might affect local airlines businesses. For example, International Air Transport Association had reported there are 10% reduced in the number of air passengers worldwide due to the influenza A H1N1. 2. International Governmental Issue Diplomatic relations between countries, stability of local government are also the element influencing the airline industry.For example, demonstration in Bangkok, Thailand had harmed the safety of tourist; the tension between South Korea and North Korea become the considerations of visiting. Physical Environment 1. Natural Disaster Natural disaster such as the Japan hit by 8. 9 magnitude earthquakes and the high radiation released become the primary consideration for people who plan to travel to Japan. It would seriously affect the airline tickets to Japan. 2. Location The airports normally located near metropolitan city, which the strategic location could bring convenience to the customers.