L;.

The airline industry is infamous for difficulties in maintaining

profit margins amid a number of internal and external factors that
consistently threaten to throw them off balance. From rising
competition and consumer demands, to labor deficits and union
strikes, to fluctuations in fuel prices, airline decision-makers need
to constantly adjust their strategies and find new ways to cut
costs and increase revenue in order to remain above ground.
So, what factors are affecting the industry? And more importantly,
how is the industry coping with them? Here is a PEST analysis for
airline industry to give you a better idea

Conclusion
So, this PEST analysis for airline industry has highlighted four important
factors that are affecting its external macro environment. By keeping
these factors in mind, we have come to the conclusion that the
increased costs of doing business, strict rules and regulations
imposed by regulators, competition from low-cost airliners, changes
in passenger profile, in addition to the recent airline related deaths,
all have affected the viability and profitability of the global airline
industry badly. It will require a lot of patience and hard work for
the industry to find its way back to the right track.

https://pestleanalysis.com/pest-analysis-for-airline-industry/

Concluding, it can be said that the global airline industry has become
very competitive and is a very expensive business as well. This
increasing cost of doing business, facing competition from low-cost
airlines, abiding with the rules and regulations imposed by the
government as well as changes in the profile and demand of consumers
have led the industry to make its external factor analysis for meeting the
industry requirements.

Additionally, recent crashes and attacks have affected the profitability

and viability of the aviation industry quite badly. Making a PESTLE
 analysis will help in determining the weak areas and how much efforts
are required to invest so as to get back to the right way.

https://www.marketingtutor.net/airline-industry-pestle-analysis/

https://www.grin.com/document/170506

SWOT Analysis of the Airline Industry

 Ahsan Ali Shaw April 22, 2020
Table of Contents
 Introduction Airline Business
 Strengths of Airline Industry
o High Income
o Growing Tourism Industry
o Continued Growth
o Safe & Speedy
 Weaknesses of Airline Industry
o Slow Rate of Infrastructure
o High Spoilage Rate
o Huge Investment
o Competitive Market
o Huge Workforce
 Opportunities of Airline Industry
o Inviting New Stakeholders
o Worldwide Mailing Services
o Use Technology to Minimize Cost
o Market Expansion
o Better Deals with Supplier
o Timely Service
 Threats to Airline Industry
o Global Economic Crisis
o Government Intervention
o Environment Threats
o Seasonal Threats
o Pandemic
 Conclusion
Introduction Airline Business
The airline is a company that offers an air source of transport to passengers and
freight. The airline companies use airplanes and aircraft to operate their
services. These companies also have partnerships and alliances with one
another to complete the same flight. The airline companies usually require an
air certificate and license by the Government aviation authority to run and
operate their flights.

The history of the Airline industry started with the German company DELAG
that launched its first aircraft on November 16, 1909. In the beginning, airlines
were the personal ownership until the 1930s. But from 1940 to 1980, the
government took control over the ownership of major airlines across the world.
However, the period of mass-scale privatization and alliances started in the
1980s.

Today, we’ll discuss the SWOT (strengths, weaknesses, opportunities, threats)

analysis of the airline industry. What the internal strength and external
opportunities companies could use to face the internal weaknesses and external
threats.

Conclusion
The airline industry is a very profitable business, but the lockdown is
becoming very detrimental to the life of this industry. The longer it goes,
the more it will be damaging. I guess we have to wait and see how the
world would look like after the lockdown, and how it would impact the
airline industry.

https://www.marketingtutor.net/swot-analysis-of-the-airline-industry/

very useful link :

https://www.iiste.org/Journals/index.php/EJBM/article/viewFile/9448/9653
FIRST PART : COMPETITION – EXTERNAL ASPECT
Local Airline Industry has steadily thrived over time .
5 competitors in the sector :
1. FIL AIRLINES - Oldest local airline and country’s flag carrier / Dominate
international route
2. VISAYAN AIR - Penetrated international route / Gaining approval to fly to
Asian countries
3. ASIAN AIR
4. AIR PINOY
5. GRANDIA – closed down in 2001.

2ND PART : EXTERNAL FACTORS

Dilemmas : 9/11 , terrorist in Mindanao, economic slowdown , war in Iraq ,
outbreak of SARS affect passengers volume.

3rd part : VIS AIR HISTORY – INTERNAL ASPECTS

Start operations in 1993.
Lossing during 1st yr of operation
Hampered by freak plane accident in 1997
Setback, Hired young CEO
Cut workforce by half in 1997 but compensated them well
1998, introduced VALUE FARE PROGRAM, reducing prices of tickets purchased in
advance
1998 , broke the 1-million passenger mark / award: best on time departure and
arrival record
2001 beginning to made popular
VISION : The airline of all times
Targeted to increase its market share to 50% in the next five years.
Entered niche market in Korea
- The golf enthusiast from Japan also looks to be a good potential market so
are the big groups from China, who seems excited to visit the Phil.
- Tourism department promoted travel to the Phil . Brands the country as the
“shoppig Capital” of the world.

Goal: Translate this vision into concrete steps and plan that the company needs to
attain the said vision.
SWOT analysis
Formulate corporate strategies for consideration by the management
Identify competitors in the industry and the market which you will target to
penetrate the market share of Visayan Air
Strengths

·         Service 

o   The company provides a customer centered services with innovative facilities that strengthen
the company’s total image. It offers services towards global excellence and provide safe, on time,
quality and cost effective in-flight service for total passenger satisfaction.

·         Workforce

o   The company’s human resources is hospitable, approachable, caring and friendly that easily
response to the needs of its customers. They are fully committed to the goals and objectives of
the company.

·         Network

o   Through diverse destinations the company continues to augment its market share on the
airline industry in the Philippines. It brings you the appropriate destinations that customers want
without sacrificing effort, time and money.

·         Competitive fare

o   The rates offered by the Philippine Airlines are considered competitive and attractive to its
target market. The fare is wise enough to correspond to the services and facilities that it offers.

·         Excellent security records

o   The company continues to conduct & maintain safe and reliable flight operations.  The welfare
and protection of the passengers is one of its priorities that is why they maintain a descent
records with regard to the security of its passengers.

·         Modern Facilities

o   The facilities of the company are world class that easily response to the demand of its
passengers such as: PAL Inflight Center (IFC) and Data Center Building.

·         Strong Alliance with big International Airlines

o   The PAL alliances include Malaysian Airlines, Emirates Airlines, Cathay Pacific, Qatar
Airways, Royal Brunei Airlines, Gulf Air, Etihad Airways, and Vietnam Airways. The following
alliances are essential to strengthen their international destinations.

·         PAL  Learning Center

o   A modern training facility located in Ermita, Manila. The Center  aims to continue to provide
world-class training to every employee regardless of area of specialization, reinforce the culture
of service, and develop every employee into the total PAL professional committed to the Airline’s
corporate values

·         Maintains good relationship with employees

o   Since Airlines is a service oriented company it continues to maintain good relationship with
regards to its employees. The employees are considered by the airline as the primary factor to
the achievement of its goals and objectives.

·         Long Existence in the Philippine Airline Industry

o   PAL will be 70 years in existence in February 2011, it is considered to be one of the oldest
domestic airlines in the country and is named as the “National Airlines in the Philippines”. Being in
existence for so many years the company has positioned itself as one of the leading airlines in
the Philippines.

Weaknesses

·         Not Specific Vision Statement

o   The company doesn’t have a specific vision statement. The vision statement answers the
question, “What do we want to become?”. Without the vision statement the management and
employees may not know what the company wants. Thus it is considered a very essential
statement for the success of the company.

·         Not Organized Website

o   Philippine Airline’s website is not organized because the website can still have more
improvements

·         Higher Maintenance cost

o   The company acquires new aircraft and flights to meet the demands of its passengers that is
why it has higher maintenance cost compared to other domestic airlines.

·         Inadequate Corporate Social Responsibility

o    PAL Medical Travel Grants are PALF’s only program for humanitarian and social
development assistance. These enable indigent Filipinos to go for medical treatment as charity or
service patients for serious health conditions. It lacks CSR on environment as well as on
education.

·         Decline in the number of passenger carried

o   PAL’s current passenger load factor fell at an average of 76.2%, three points lower than the
previous year due to insufficient promotion and marketing efforts.

·         Absence of research and development department

o   The company lacks research and development department that is useful in conducting new
programs development and in monitoring the competition in the airline industry in the Philippines.

·         Insufficient promotion and marketing efforts

o   The company lacks innovative promotion and marketing efforts that could maintain and attract
new passengers. Compared to other leading domestic airlines, PAL’s promotion and marketing
effort is considered weak.

Opportunities

·         Increase in International market

o   Since PAL offers international destination, an increase of international market will probably
increase its revenues.

·         New Destinations

o   PAL may increase its destinations domestically or internationally depending on the existing
demand of passengers available.

·         Research and Development

o   It has been a big trend for large companies to have a research and development department.
PAL airlines may have a R&D department that will develop new programs and strategies for the
company

·         Technological Advances

o   Due to advancement of the technology nowadays the company may utilize it as one of its
competitive advantage to other domestic airlines. Development of new technologies changes the
existing culture of the airline industry such as in booking, ticketing, and reservations.

·         Internet Advertising

o   People use internet worldwide and a great way of communicating is through the web, utilizing
the internet could expand the reach of PAL to its potential passengers. This could help the
company to attract new customers and update the current situation of the company.

·         Boom of Philippine Tourism

o   The continuing efforts of the Philippines towards tourism could possibly increase the number
of target passengers that will travel using Philippine Airline to visit the country’s top tourist
destinations.

·         Emerging trends among companies in building public image

o   A good public image results good profit. Building a good public image in the industry can
establish a competitive advantage that could be used as a instrument to lead the industry it
belongs.

·         Increasing number of Overseas Filipino Workers

o   There has been an increase in opportunities abroad and it brings a positive atmosphere for
airline industry since Overseas Filipino Workers board airplanes to go to other countries.

·         Increasing environmental awareness

o   Environmental awareness has increased due to the effects of the Global warming that
threaten the lives of many people. The Airline industry could innovate planes that are
environment friendly to respond the need for environment preservation.

Threats

·         Global economic downturn

o   Global crisis has significant impact on the airline industry. Global economic downturn means
less demand for air travel that lead to a possible loss for the airline industry.

·         Strong Competition

o   There has been a stiff competition in the airline industry in the Philippines. Moreover, threats
also increase due to the emerging substitutes and new entrants.

·         Government Intervention

o   New regulations for the airline industry could possibly hamper its operations. Thus, these may
lead to a decrease in the industry’s revenue.

·         Airline security cost have increased

o   Due to security threats, governments have added rigorous security requirements and
procedures that airline companies should comply.

·         Fuel price fluctuations

o   Unstable fuel price in the world market leaves airline companies susceptible to operating
losses.

·         Hedging Currency risk

o   Due to price fluctuations in the market, airline companies are forced to enter into hedging
agreements which makes them vulnerable to losses.

·         Terrorism attacks

o   The possibility of terrorism attacks could lead to a conclusion that security procedures
implemented b y the company are not stringent enough which may lead to having a bad public
image.

·         Natural Calamities

o   Fortuitous events such as earthquakes, volcanic eruptions, weather disturbances, epidemics
and other diseases may impede the company’s operations.
·         Global Warming

o   Increasing problems due to global warming can lead to a decrease in travel operations.