Mondays, 6:00 - 7:20
1. Political: “In some cases, foreign governments limit U.S. air carriers’ rights to carry passengers beyond designated gateway cities in foreign countries.”
This can affect the American Airlines company in the competitive airline industry because if some foreign governments deny the rights to U.S. air carriers to carry passengers beyond designated cities, the loyal customers of American Airlines would choose another airline that would be accepted by foreign governments, which will ultimately decrease American Airline ticket sales followed by a decrease in profits. 2. Economic: “The airline industry is subject to extensive government fees and taxation that negatively impact our revenue. The U.S. airline industry is one of the most heavily taxed of all industries.”
With American Airlines having competition in both domestic and international markets it can have both a negative and somewhat positive effect on the company. With the US government enforcing fees and taxations to all US airline companies, it will not have a negative nor positive effect on the competitive US airline market. These fees will have a negative impact on American Airlines revenue stream when they are trying to compete in the international market. 3. Sociocultural: “Our business is affected by many changing economic and other conditions beyond our control, and our results of operations tend to be volatile and fluctuate due to seasonality, such as, changes in consumer preferences, perceptions, spending patterns or demographic trends.”
Just like in any other industry, if uncontrollable economic conditions take action it can cause certain consumer trends that may either hurt or help your current financial standing. American Airlines is affected by these economic changes on a yearly basis that alters their customers’ perceptions about the company which ultimately hurt their competitiveness in the airline market. For example, if an American Airlines customer bought an airfare ticket from a main competitor that could have not bought a ticket from American Airlines Company due to the economic changes; Sales would decline and have a negative effect on the company, hurting their competitive standing. 4. Technological: “Air traffic controllers rely on outdated technologies that routinely overwhelm the system and compel airlines to fly inefficient, indirect routes.”
In a competitive airline industry it is crucial to stay updated in the technological advances being made. If American Airlines continues to rely on outdated technologies that tend to overwhelm their system and disrupt the airline trafficking, it can have a destructive effect on the company. Customers would not like to be stuck any longer in an aircraft than they have to due to computer malfunction. If American Airlines wants to maintain in the competitive airline industry they must maintain and keep up to date on new technological advances being made. 5. Environmental: “The U.S. Environmental Protection Agency and other federal agencies have been authorized to promulgate regulations that have an impact on the Company’s operations.”
The Company is subject to several laws and government guidelines concerning environmental matters in the U.S. and other countries. Concerns about climate change and greenhouse gas emissions, in particular, may result in the obligation for more regulation that could eventually hurt the competitive standing of American Airlines Company. With these environmental regulations, American Airlines and their competitors must reintegrate certain characteristics of their business that will be approved by the environmental protection agency. 6. Legal: “Transactions outside the ordinary course of business will be subject to the prior approval of the Bankruptcy Court, which may limit our ability to respond in a timely manner to certain...