In the first module I choose to discuss the airline industry. This has been something that I am passionate about as well as have studied for the last 5 years. Using firsthand experience, management guidance and research on the web, I will continue this paper for the external environmental scan. As a potential future leader of the company, it is important to evaluate many factors of business to remain successful. Economic, geographical, technological, social, and political trends are all a concern when a leader of a successful business. This will be imperative to profiting from an industry that already has very low profit margins. Let’s get started. First we are going to look at the current economic trends of the airlines as a whole. Reading the last document, we have established that the airlines are the first to show recession and the last the recover. Since the tragic day of September 11th the economic factors of the airlines has decided. Since then the aviation market has returned to a profitable business. There has been a 20% increase in domestic flight traffic since 2010. With over 87,000 flights a day air travel is the way to go. Although less than half of those fights are commercial, that equates to 1.73 million passengers a day. The economic trends have continued to claim and over the next 5 years aviation is projected an additional 27% increase. (Notis, 2015) Political factors affect every profession. In the airlines it has been a problem. The biggest political issue that is facing the airlines today is Federal Aviation Regulation. In 2009 Colgan Air 3407 crashed killing all 50 people on board. The National Transportation Safety Board released a statement stated that it was pilot error due to inexperience. The FAA then changed pilot regulation from pilots needing 495 Hours of total flight time to 1500 hours to get in entry level position in the airlines. This has created a problem because 4 year graduating pilots only have about 300 hours. Every position requires more hours which makes it difficult for young pilots to join the airlines. With an increase in air travel and decrease in pilots due t regulation it has created a pilot shortage. Since September 11th there as been a further decrease in pilots as they were furloughed and found other positions. With changing politics and pilots from dessert storm ready to retire, political trends have created a major shortage over the next 5 years. Currently regulation and political factors drive part of the societal trends. Do to the recession and change in regulation. There have been political changes. Due to low profit margins the attacks on the twin towers put commercial aviation into a tailspin. Not only has that but more recently, the Malaysia Airlines effected how people see air travel. Airlines have been merging to stay profitable and it really takes a huge toll of customer relations. The top 5 U.S. carriers are under the top 40 and the world. This is because most of the U.S. carrie.

1. In the first module I choose to discuss the airline industry. This
has been something that I am passionate about as well as have
studied for the last 5 years. Using firsthand experience,
management guidance and research on the web, I will continue
this paper for the external environmental scan. As a potential
future leader of the company, it is important to evaluate many
factors of business to remain successful. Economic,
geographical, technological, social, and political trends are all a
concern when a leader of a successful business. This will be
imperative to profiting from an industry that already has very
low profit margins. Let’s get started.
First we are going to look at the current economic trends of the
airlines as a whole. Reading the last document, we have
established that the airlines are the first to show recession and
the last the recover. Since the tragic day of September 11th the
economic factors of the airlines has decided. Since then the
aviation market has returned to a profitable business. There has
been a 20% increase in domestic flight traffic since 2010. With
over 87,000 flights a day air travel is the way to go. Although
less than half of those fights are commercial, that equates to
1.73 million passengers a day. The economic trends have
continued to claim and over the next 5 years aviation is
projected an additional 27% increase. (Notis, 2015)
Political factors affect every profession. In the airlines it has
been a problem. The biggest political issue that is facing the
airlines today is Federal Aviation Regulation. In 2009 Colgan
Air 3407 crashed killing all 50 people on board. The National
Transportation Safety Board released a statement stated that it
was pilot error due to inexperience. The FAA then changed pilot
regulation from pilots needing 495 Hours of total flight time to
1500 hours to get in entry level position in the airlines. This has

2. created a problem because 4 year graduating pilots only have
about 300 hours. Every position requires more hours which
makes it difficult for young pilots to join the airlines. With an
increase in air travel and decrease in pilots due t regulation it
has created a pilot shortage. Since September 11th there as been
a further decrease in pilots as they were furloughed and found
other positions. With changing politics and pilots from dessert
storm ready to retire, political trends have created a major
shortage over the next 5 years.
Currently regulation and political factors drive part of the
societal trends. Do to the recession and change in regulation.
There have been political changes. Due to low profit margins
the attacks on the twin towers put commercial aviation into a
tailspin. Not only has that but more recently, the Malaysia
Airlines effected how people see air travel. Airlines have been
merging to stay profitable and it really takes a huge toll of
customer relations. The top 5 U.S. carriers are under the top 40
and the world. This is because most of the U.S. carriers have
merged within the last 15 years and haven’t fully recovered
from September 11th followed by the most recent recession
(Staff, 2015). United is a perfect example of this. Their merger
was in 2010 and now in 2016 they are finally producing a profit.
Customer relations were not good landing them last in the U.S.
market in social factors after the merger.
Since 2001 there have been some major upgrades that has made
air travel safe and more comfortable. A prime example of this
technology is the new Boeing 787. According to Boeing these
planes are currently on back order for the next 5 years. These
new aircrafts are a prime use of innovation and comfort. The
new 787 planes are now equipped with Direct TV in each seat
and on board Wi-Fi satisfying the needs of the customers. Now
customers can stay connected where ever they go at 35,000ft in
the air. These planes are also now able to be pressurized at a
lower altitude allowing more passenger comfort. Lower
pressurization allows the body to not work as hard adapting to
the change in pressure eliminating jet lag. It has the ability

3. pressurize the aircraft to the altitude of Denver which was not
the case with older planes. These aircrafts are a reason that
passengers have strong loyalty with companies that have the
most of these aircraft. Unfortunately for some, the companies
that didn’t believe in this $220 million technology now have to
wait 6 years to get their hands on one. (Ausick, 2015)
Geographical treads play a huge part of the airlines. Currently
United Airlines is the world’s largest in relations to destinations
served. This isn’t an easy thing to do and stay profitable. There
are daily evaluations on routes to make sure they are profitable.
United Airlines runs constraint programming for analyzing
routes in order to squeeze out every cent of profit out of each
trip. Once a trip becomes unprofitable the route is then changed
or canceled and picked up by a competitor.
Looking at Porter’s five forces with airlines being so large,
there really isn’t a treat of new competition. The profit margins
are so small that if anything companies are margin and going
bankrupt. It will take too much money to enter the ring with
larger competitors. Regulation has allowed smaller airlines to
emerge which are great for low time pilots for getting their
hours. Currently airlines can leverage their debts and assets to
create major buying power. Although rivalry will keep prices
down, destinations serviced will keep airlines apart. For the
aviation industry, many things are changing. If nothing is done
we may seem the next fall of the airlines.
Works Cited
Ausick, P. (2015, July 26). What Does Boeing 787 Dreamliner
Cost? Retrieved March 28, 2016, from 24/7 Wall St:
http://247wallst.com/aerospace-defense/2015/07/26/what-does-
boeing-787-dreamliner-cost/
Naidu, R. (2016, March 31). Aviation flying high with domestic

4. air traffic growth over 20%. Retrieved March 31, 2016, from
Economic Times:
http://economictimes.indiatimes.com/industry/transportation/air
lines-/-aviation/aviation-flying-high-with-domestic-air-traffic-
growth-over-20/articleshow/51624361.cms
Notis, K. (2015, November 12). Airline Travel Since 9/11.
Retrieved March 28, 2016, from U.S. Department of
Transportation:
http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publicatio
ns/special_reports_and_issue_briefs/issue_briefs/number_13/ht
ml/entire.html
Staff. (2015, July 20). These Are the Best Airlines in the U.S.
Retrieved March 28, 2015, from Huffington Post:
http://www.huffingtonpost.com/hoppercom/these-are-the-best-
airlin_b_7833258.html
Bagbe, C. (2016, March 23). Interview of United Operations.
(E. Speechley, Interviewer)
Staff. (2006). Encyclopedia. Retrieved March 23, 2016, from
United Airlines:
http://www.encyclopedia.com/topic/United_Air_Lines_Inc.aspx
United. (2016, March). Maps of Uniteds Hubs. Retrieved March
23, 2016, from United: https://www.united.com/CMS/en-
US/travel/Pages/routemaps.aspx
My goal for as long as I could remember is becoming a pilot. I
started when I was a kid and during college I had my

5. opportunity. In 2014 I received an invitation to get an
internship in San Francisco California with United Airlines.
Since then I have been working with managers from United
Airlines for about 3 years in San Francisco and now in Chicago.
While I have been working I have gotten to know the managers
of the operation. This paper today will consist of interviews of
management and head of the operation, the chief pilot. First
let’s start with explaining the operation.
United was formed in 1926. In the plains of Boise Idaho a
once small mail carrier formed the first ever airline known as
Varney Air Lines. Since that time the airlines have formed
which is now known as United. United Airlines is now one of
the largest airlines in the world with over 86,000 employees and
703 aircrafts. United is primarily a service industry providing
transportation to multiple destinations. As a worldwide carrier
you United provides service to many different markets all over
the world. Currently, in the United States, United operates from
a few select locations called hubs. These hubs include Chicago
O’Hare, Chicago Willis Tower, Denver Training Center, Denver
Airport, San Francisco, Los Angeles, Newark, Huston,
Washington D.C., Guam and Tokyo.
From these selected hubs, there is a chief pilot’s office at
each one which manages the pilots and in flight crew for each
hub. This is because the operation is so large; each base has its
own management. Each of these management teams have a
flight management team with controls a select bunch of pilots.
They are in charge for holding pilots accountable for FAA law
as well as advising how the operation should be run to produce
a profit. Each hub has 5-8 flight managers, 1 business manager,
1 chief pilot, 4 secretaries and an intern. Each employee works
together to keep the operation moving as smoothly as possible
while dealing a multitude of problems per day. Each day there
is a conference call including all of the bases management
teams. This is primarily to discuss weather conditions,
maintenance, customer satisfaction, pilot performance, and
operational performance. Each of these points are key when

6. dealing with a large operation.
I have had the opportunity to interview our chief pilot
describing how the operation works and customer relations. We
are a customer relations company striving on customer
satisfaction. Some main points include in-flight amenities, on
time arrivals and departures, and comfort of the passengers.
These can all be very challenging points when operating an
airline as large as United. When coming to air travel there are
many wants and needs when it comes to flying. According to
management, United’s target market is middle and upper class
business travelers. This can be relevant when looking at the use
of United’s credit card. One thing that may be surprising about
United Airlines is that 42% of all the profits from First and
Business class passengers. In order to establish loyalty daily
travelers have many options when it comes to traveling. With a
choice, United has to attract customers with the service and
dependability. Arguably, one of the main necessities that attract
loyal customers is the fleet. An airplane is the main units to
service and in this day in age, a plane is becoming a piece of
space aged technology.
A prime example of this technology is the new Boeing 787.
According to management United Airlines purchased 5 of these
new aircraft for their most popular routes. These new aircrafts
are a prime use of innovation and comfort. These new planes are
now equipped with Direct TV in each seat and on board Wi-Fi
satisfying the needs of the customers. Now customers can stay
connected where ever they go at 35,000ft in the air. These
planes are also now able to be pressurized at a lower altitude
allowing more passenger comfort. Lower pressurization allows
the body to not work as hard adapting to the change in pressure
eliminating lat lag. It has the ability pressurize the aircraft to
the altitude of Denver which was not the case with older planes.
Today, United has the entire fleet with on-board Wi-Fi. This
allows the normal business travelers to ride in comfort and stay
connected as other passengers have the ability never miss a
moment with direct TV installed.

7. These advancements are a key strategy for United when
capturing their target market. Although not the same as a
private jet, the service provided in first and business classes for
United are part of their customers experience. Their goal is to
provide the most comfortable travel experience in a mix with
educated and helpful staff to fill the motto “Fly the friendly
skies”. This has given United a competitive advantage over
other companies. Their technology and loyalty of customers
make them what they are today. It has allowed united to have a
base of operation for years to come. “Flying the friendly skies”
means so much more than just a motto. It’s providing the best
service, on and off a flight. Providing the most comfortable and
enjoyable experience traveling will allow continue to build
customer loyalty as well as attract new customers.
Works Cited
Bagbe, C. (2016, March 23). Interview of United Operations.
(E. Speechley, Interviewer)
Staff. (2006). Encyclopedia. Retrieved March 23, 2016, from
United Airlines:
http://www.encyclopedia.com/topic/United_Air_Lines_Inc.aspx
United. (2016, March). Maps of Uniteds Hubs. Retrieved March
23, 2016, from United: https://www.united.com/CMS/en-
US/travel/Pages/routemaps.aspx