1. The Airlines industry is quite highly sensitive to the environmental factors and is profoundly affected by the changes in the political, social or the economic environment. The marketing decisions of the industry are to an extent based on political decisions. Also, the condition of the world economy determines the nature of its marketing policies. Changing pictures of the political sphere have a deep impact on the aviation industry scene. There are political factors like liberalization, terrorism etc which have a direct effect on the airlines industry. Liberalization has made competition quite intense in this industry. With the entry barriers not there, the number of new entrants has risen giving rise to fierce competition in the sector. It has become essential for the airlines to beat the competition for survival. Airlines employ various strategies to remain competitive. One of them is to give the price benefit to attract a large number of customers. Low cost fares can be a good strategy to attract new customers. During the initial years of the century this industry has already faced grave economic problems. Factors like economic downturn and rising fuel prices negatively impacted this industry and its profitability. Recession has also weakened it further. The low cost carriers or LCCs have intensified the competition and no airline can afford to remain competitive without cutting down on the air fares for its passengers. Socially also there has come a big difference in the consumer demand pattern and previously. The business travelers who once were indifferent to air fares are now not anymore willing to pay high fares for the business class which can be multiple times the low cost airfares. Passengers’ preference for the low cost carriers has risen during the previous decade. On careful analysis it can be seen that these environmental factors along with other factors like threat of terrorism and such other factors may be acting behind the decision of...
References: Wittmer, Aneas (2011). Aviation Systems. Berlin, Heidelberg. Springer
Shaw, Stephen (2007). Airline Marketing and Management. Surrey. Ashgate Publishing Ltd.
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