Peste Analysis Airline

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Peste Analysis Airline

  1. 1. The Marketing Environment <ul><li>PESTE Analysis: </li></ul><ul><ul><li>Political </li></ul></ul><ul><ul><li>Economical </li></ul></ul><ul><ul><li>Social </li></ul></ul><ul><ul><li>Technological </li></ul></ul><ul><ul><li>Environmental </li></ul></ul><ul><li>The airline industry is deeply involved in those 5 topics or environments. </li></ul>
  2. 2. PESTE - Political <ul><li>This is a very highly political industry (remember the bilateral agreements/deregulation/opensky, etc.) </li></ul><ul><li>Terrorism fear and political instability </li></ul><ul><ul><li>Airspace closed for 4 days </li></ul></ul><ul><ul><li>Fear of further attacks caused lower demand both domestic and international </li></ul></ul><ul><ul><li>Ware in Irak and Afghanistan </li></ul></ul><ul><ul><li>The concept of “War on Terror” worsened or solved the problem? </li></ul></ul><ul><ul><li>Discussion about the relationship between airlines and terrorism. </li></ul></ul><ul><ul><li>The airlines don’t have control over the size of the market. </li></ul></ul><ul><ul><li>Security cost burden </li></ul></ul>
  3. 3. PESTE - Political <ul><li>Airport Slot = a pre-agreed time for a takeoff of landing to take place at a particular airport. </li></ul><ul><li>What does a landing slot involve? Landing? Taxing? Deplaning pax all the way thru Immigrations? Offloading cargo and bag? </li></ul><ul><li>How are slots awarded? Who are involved? </li></ul><ul><ul><li>Airport authority </li></ul></ul><ul><ul><li>Air traffic control authority </li></ul></ul><ul><ul><li>Maximum capacity for the airport </li></ul></ul><ul><ul><li>What about Immigrations/Customs? </li></ul></ul>
  4. 4. PESTE - Political <ul><li>Slot Allocation: “Grandfather Rights” </li></ul><ul><ul><li>2 seasons: </li></ul></ul><ul><ul><ul><ul><li>Summer from April 1 to October 31 </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Winter from November 1 to March 31 </li></ul></ul></ul></ul><ul><ul><li>Minimum of 80% of utilization </li></ul></ul><ul><ul><li>Automatically renewed for the next year </li></ul></ul><ul><ul><li>The big airlines have slots awarded on an “in perpetuity” basis. </li></ul></ul><ul><li>“ we cannot give away our slot…we’re gonna get a new aircraft in 3 years, for 28 years!!!” </li></ul>
  5. 5. PESTE - Political <ul><li>Airport Slot Allocation </li></ul><ul><ul><li>The re-allocation of slots/slot auctions, etc. </li></ul></ul><ul><li>For the purposes of the auctions, a Slot is an operational authority to conduct a single Scheduled Operation, seven days a week, during a specific 30‐minute period at a specific airport. </li></ul>New York Airport Slot Assignment
  6. 6. PESTE - Political <ul><li>Buy and Sell concept </li></ul><ul><ul><li>Selling something we do not own and didn’t pay for it…hmm… </li></ul></ul><ul><ul><li>Governments step in saying “it is national property, you pay us”, like with cell phone licenses </li></ul></ul><ul><ul><li>Financial power of the big airlines vs small ones </li></ul></ul>
  7. 7. PESTE - Economical <ul><li>Macroeconomic system: </li></ul><ul><ul><li>As the world economy grows so does the demand for air travel (hopefully). </li></ul></ul><ul><ul><li>As a manager, will you be able to exploit this demand and opportunity? (see PESTE Environmental factors) </li></ul></ul><ul><ul><li>Let’s discuss what is happening now and the impact on labor, demand, costs, type of travelers, etc. </li></ul></ul><ul><ul><li>What about Boeing and Airbus (2004)? </li></ul></ul><ul><ul><li>What about new class of services? P66 of Marketing and Mngt (MAXjet). </li></ul></ul>
  8. 8. PESTE - Social <ul><li>Ageing Population (in developed countries): provisions/services for disabled pax, needing medical care and help at airport, etc. </li></ul><ul><ul><li>New class of customer? </li></ul></ul><ul><ul><li>New type of ads? </li></ul></ul><ul><li>Changing Family Structures – Western Society: </li></ul><ul><ul><li>Divorce involves one-parent families </li></ul></ul><ul><ul><li>More singles </li></ul></ul><ul><li>Change Tastes and Fashions in Holidays </li></ul><ul><ul><li>Pursuing hobbies while on holidays </li></ul></ul><ul><ul><li>Various lengths of stay </li></ul></ul>
  9. 9. PESTE - Social <ul><li>Labour/Job Market: </li></ul><ul><ul><li>One-day trip as opposed to a two day trip (influences the flight times) </li></ul></ul><ul><ul><li>Some have time and no money, some have money and not enough time. </li></ul></ul><ul><ul><li>The female Business Traveler </li></ul></ul><ul><ul><ul><li>Bigger focus on product details (amenity kits) </li></ul></ul></ul><ul><ul><ul><li>Change in marketing ads </li></ul></ul></ul><ul><ul><ul><li>Checked bags more than men </li></ul></ul></ul>
  10. 10. PESTE - Technological <ul><li>Video-conferencing </li></ul><ul><li>The Internet </li></ul><ul><ul><li>Biggest question: will it be THE distribution channel? </li></ul></ul><ul><ul><li>Bye bye GDS? </li></ul></ul><ul><li>Surface Transport Investment </li></ul>
  11. 11. AirTran – Conference Call
  12. 12. PESTE - Environmental <ul><li>Climate Change and Global Warming: </li></ul><ul><ul><li>If it becomes hot and nice where you live, why would you go somewhere else? </li></ul></ul><ul><li>Carbon dioxide emission issue </li></ul><ul><li>Virgin Atlantic handouts (2) </li></ul>

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