Air India airline is one of the biggest airline in the India. It was established by the famous company TATA and since its incorporation. It has grown very well and has spread all over the world in the different destinations. It has become the reputable brand in the airline industry with having the operations over 152 destinations. It has link up connection in the 35 countries and it has currently having 137 fleets. This company becomes the public limited company in the 1946. The company has international and the local route and its performance is increasing day by day with the pace of the good growth as compare to the other airlines in the industries in the area and the channels in which this airline is working.
External factors affecting the Air India
Every company in the market has to face the different challenges and try to cope with the challenges to come up with the strong idea to stay and survive in the market. Market is getting tougher and there are different factors which effect on the company policies and the strategies which the company is looking to apply. Some factors can be managed by the skills of the companies and can be tackled. These factors called internal factors but there are some factors which are very hard to tackle. They are out of control of the company but the alternative actions can be taken to avoid the consequences of the impacts. To analyze the external factors which are affecting the Air India airline, the pestle analysis can be used.
Pestle analysis is the tool to analyze the external environment of the business. It takes the different factors according to which the opportunities and threats can be analyzed and the actions plan can be made.
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Stakeholders’ analysis on Air India:
Stakeholders’ analysis is the analysis which tells that how the company is dealing with the people which are directly or indirectly related with the company’s operations. These are called stakeholder and they include the employee, society, suppliers, buyers, shareholders, got and other tax related companies.
Air India has gone through this process very strongly and it is very committed with society and on every big event, they are providing the reduce price to keep the customers with the company. On the other hand, this airline is providing the huge income to the economy as the tax for which got has recently accounted to provide the less tax on buying new fleets. Company varies with the suppliers as the supply of fleets is not often therefore company focuses on the different suppliers which provide them the best price.
Air Canada should pursue revenue generating and cost reducing opportunities by investing in new technology, implementing effective and efficient projects and concentrating on employee productivity through contract negotiations and continuous improvement that goes hand in hand with its long term goals. The announcement of the launch of “Air Canada RougeTM “ will aid as Air Canada’s competitive advantage with the “new low-cost leisure airline”. It will help increase its revenue, lower its costs and enhance its profits. Also, to better manage its fleet, they should soon implement the “new five-year collective agreement with the Air Canada Pilots Association (ACPA)” that can help the airline increase its productivity and better its competitive position while maintaining a low budget. Air Canada is expected to implement a new “revenue management” that will help optimize its profits based on passenger revenue.
Operating an air - express transportation industry requires large capital investments, and therefore it can impede the entry of new firms into the industry. For one, Airborne has already its own set of aircrafts and even operate its own airport, and it would be hard for a new firm to compete with this.
The first step to doing an external analysis on General Electric is to conduct a PESTEL Analysis. PESTEL is an acronym for political, economic, sociocultural, technological, ecological, and legal factors affecting a company. Using the PESTEL model, it is easy to evaluate external factors that could possibly have an effect on the company.
During 19991-1992, Modiluft, East West and Damania went bankrupt. Air Sahara and Jet Airways survived along with government own Indian Airlines because they had the capability to bear losses. Globalization and privatization had a major impact on aviation industry. Indian aviation industry was deregulated by the government in 1990s. As a result now 14 airlines are operating today in Indian sky. Now, collaboration with international organization and foreign direct investment are welcome to improve infrastructure and technology. Today people who can not afford high prices of Full Service Carriers (FSC) can travel by Low Cost Carriers (LCC) or budget airlines. Air Deccan was India’s first LCC started in 2003. It flies to several metro and non-metro destinations. All airlines have three major fixed costs i.e. fuel costs, financing or aircraft lease and labour cost. But LCC costs are 10 to 15 per cent lower than FSC. This is because of three reasons. Firstly, saving on distribution cost as passengers book tickets on the internet. Secondly, no frills are offered on board. Thirdly, to accommodate additional seats, catering and cabin crew space in these aircraft has been used. So these aircraft have 40 seats more than the FSC.
Kotler (1998) claims that PEST analysis is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. The headings of PEST are a framework for reviewing a situation, and can in addition to SWOT and Porter's Five Forces models, be applied by companies to review a strategic directions, including marketing proposition. The use of PEST analysis can be seen effective for business and strategic planning, marketing planning, business and product development and research reports. PEST also ensures that company's performance is aligned positively with the powerful forces of change that are affecting business environment (Porter, 1985). PEST is useful when a company decides to enter its business operations into new markets and new countries. The use of PEST, in this case, helps to break free of unconscious assumptions, and help to effectively adapt to the realities of the new environment.
PESTLE analysis, which is sometimes referred as PEST analysis, is a concept in marketing principles. Moreover, this concept is used as a tool by companies to track the environment they’re operating in or are planning to launch a new project.product, or service etc.
Stakeholder analysis is important for successful implementation of projects and/or strategic activities within any organisation. It is used to analyse the stakeholders in order to understand them and classify them according to their power, influence and interest. Stakeholders are people who have an interest in a commercial entity including those within the organisation and outside. These include the boss, senior executives, customers, suppliers, government, your co-workers, the team and others. All these people are important in the implementation and success of strategy.
The low cost operations, effective ,management level, and aggressive management .There are offers low-cost and affordable airfares and offers in-flight services that promote Malaysian hospitality and a huge variety of the local food.The Air Asia company also supply a simple proven business model that systematically delivers that lowest fares. Air Asia serves a canonical need of their passenger, getting from point 1 to point 2,its business models derives from Southwest Airlines, Ryanair and Easy Jet. Air Asia’s “No Frills” module means deduce the unnecessary offering such as air-flight meals,less room baggage allowance,and reduced seat pitch.Besides that,Air Asia get through to volume markets.By using the common fleet, Air Asia reduces the cost of training cabin crews and pilots as it is more easier to move them around and the floor plan and layout remains the equal.There have multiple skilled of the staffs means they are efficient and motivational workforce.Besides the common of social media advertising , Air Asia’s top management also take advantage and benefits on marketing activities through news by being very “media friendly” and free contribute and sharing the latest information and details on Air Asia as well as the airline manufacturer. Their partnership with other service providers such as hotels and hostels, car rental company, hospitals (medical tourism), Citibank (Air Asia Citibank card) has created a vary new image among traveling. Alliance with Galileo GDS (Global Distribution System) that be able travel agents over the world to check flight details and information for makes bookings have also chip in to their brand’s name.Air Asia is the lowest cost leader in Asia. With the utility of Air Asia Academy, Air Asia has successfully created a “lowcost airline mentality” among their workforce. The workforce is very flexible
A PESTEL analysis is a framework or tool used by marketers to analyse and monitor the macro-environmental (external marketing environment) factors that have an impact on an organization. The result of which is used to identify threats and weakness which is used in SWOT analysis. (Professional Academy n.d.)
In order to identify the uncertainties in Shell’s far environment I decided to use a PESTLE analysis approach to the oil and gas industry.
Historically the Airline industry is one of the most competitive fields today. The large number of players in the industry combined with falling profit margins intensifies the competition. High exit barriers and mergers among competition makes it extremely difficult to growth in the industry
A PEST analysis is an analysis of the external macro-environment that affects all firms. P.E.S.T. is an acronym for the Political, Economic, Social, and Technological factors of the external macro-environment. Such external factors usually are beyond the firm's control and sometimes present themselves as threats. For this reason, some say that "pest" is an appropriate term for these factors. Let us look at the PEST analysis of the Indian aviation sector:
AirAsia Berhad is a Malaysian low-cost airline based in Kuala Lumpur, Malaysia. It has been named as the world's best low-cost airline, and a pioneer of low-cost travel in Asia. AirAsia group operates scheduled domestic and international flights to 100 destinations across 22 countries. AirAsia has risen exponentially since its purchase in 2001, as a result of its confluence of opportunity and its application of the Low-Cost Carrier business model (Poon & Waring, 2010).