External Factor Airline Industry

Topics: Airline, Low-cost carrier, Southwest Airlines Pages: 3 (833 words) Published: June 13, 2013
External Factors:
Oportunities
* Acquisitions
* Asset leverage
* Financial markets (raise money through debt, etc)
* Emerging markets and expansion abroad
* Innovation
* Online
* Product and services expansion
* Membership of any airline alliance will help to increase reach via code share agreements * Leverage on association with coffee company like Starbucks to provide onboard coffee by creating awareness in all coffee outlets * International flights and global expansion

* Potential for research in marketing and advertising
- ATA Domestic Code-Sharing Agreement.
- International flights
- Further improve customer satisfaction and value

Threats
* Future oil prices
* Intense competition and price discounting
* World and U.S. Economy
* Competition
* Economic slowdown
* Lower cost competitors or imports
* Maturing categories, products, or services
* Price wars
* Product substitution
* Fluctuating demand of air travel by economy class
* Increasing cost of aviation fuel
- Long term fuel/oil prices and hedge activities.
- Rising labor costs.
- New low-cost carriers (Competitors Jetblue, Airtran - being copied) - New regional jets
- Recession - decrease in air travel
- Terrorist attacks
- Operates mainly its own booking service
# Weather patterns (e.g. Volcanoes)
# Health Scares, Pandemics
# Economic Cycles
# Terrorist Attacks
# Political disruption
1 > Regulatory barriers/national ownership, preventing rationalisation of the industry 2 > Legacy unions, and a constant threat of strikes and policy disruptions 3 > Constant government intervention, in such a high profile business 4 > Aggressive and powerful intermediaries, often much larger than the airlines, make doing business difficult 5 > Commoditisation, resulting at least partly from intermediaries intervening between airline and customer 6 > High capital costs of aircraft and financing, where investment level credit ratings are rare 7 > Uncertainty of supplier delivery times,...
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