Air Nz- External Analysis

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Background
Air New Zealand originates back to 1940 when Tasman Empire Airways Limited created services with a limited number and it officially started being known by its present name as of April 1965. At first, Air NZ only carried out services within Australia and the Pacific, but with advances in technology and the improvement of aircrafts, it was able to create an international network that covers Asia, United Kingdom, Europe and North America. (Air New Zealand, 2012; Hill 2007). ‘Air NZ was New Zealand’s State-owned airline until December 1989 when a combination of Brierley Investments and overseas airlines purchased the company for $660 million New Zealand dollars. However, the New Zealand government still reserved control of the company by dealing out shares that could only be obtained by national people of the country’ (Company Research, 2012). During the past ten years, Air NZ has faced many internal and external problems, such as the losses it faced when it invested $105 million NZD in the year 2000, to become the owner of Ansett Holding, an Australian airline with domestic and international services. Restructuring in 2001 resulted in NZ Government-funded equity rescue package which returned the airline to around 75% state ownership as a ‘kiwi’ share. Not only did this help recover the company but also made it a profitable business (Company Research, 2012). In January 2011 the company announced it had acquired a 14.9% substantial shareholding in Australian-based airline Virgin Blue. For the 12 months to 30 June 2011, Air New Zealand Limited reported revenue from ordinary activities of NZ$4,377 million, a 7% increase on the previous corresponding period. Profit from ordinary activities after tax attributable to security holders has been reported as NZ$81 million, a 1% decrease on the previous corresponding period. (Company Research, 2012). Presently, Air NZ belongs to the Star Alliance network which enables the company to offer more competitive prices and a broader number of international places to its customer.’ (Air NZ, 2012; Hill, 2007)

Industry
The New Zealand Trade and Enterprise has split the Aviation Industry into eight sectors, six of which Air NZ actively participate in and it is the largest provider of the Operational Sector which includes. Air NZ plays a big part in sectors such as Maintenance, Repair and Overhaul (MRO), Aircraft Design and Manufacture, Aircraft Parts and Aviation Services and Training. (NZTE, 2012). To analyse the macro-environment of industries, it cannot be disregarded that the growth of the world economy is the most important forces for the aviation industry. Other forces such as political, economical, socio-cultural, technological and legal forces (PEST) all offer firms with opportunists, threats and constraints. For example, the economic development affects buyers’ power to purchase directly. Inflation rates, interest rates, average disposable income and unemployment numbers are all the influence of consumption. During the economic crisis, the recession, the aviation industries’ share prices declined rapidly, however, over the last few years the revenue of the air industry has increased largely because of the rising of international trade as well as people wanting to travel abroad frequently.

The Macro-environment of Air New Zealand
Political/ Legal
The New Zealand government has been a large influence over Air NZ but plays a less regulator role and this position has been acknowledged because of its neoliberal nature that assists globalisation and free markets (NZTE 2012), however the aviation industry still needs to deal with heavy policies and regulations. Sectors such as MRO and Aircraft Design and Manufacture are under heavy constraint for the lack of international recognition due to the strong regulations of this particular industry in different countries. This is where the New Zealand Government plays an important role to pursue international agreements that...
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