The Airline
An airline provides air transport services for passengers or freight, generally with a recognized operating certificate or license. Airlines lease or own their aircraft with which to supply these services and may form partnerships or alliances with other airlines for mutual benefit.
Airlines vary from those with a single airplane carrying mail or cargo, through full-service international airlines operating hundreds of airplanes. Airline services can be categorized as being intercontinental, intra continental, domestic, or international and may be operated as scheduled services or charters.1
The Cathay Pacific Airlines
The Cathay Pacific enjoyed dominating the Hong Kong aviation market from 1959 as the sole Hong Kong based carrier after rival Hong Kong Airways merged with Cathay Pacific. Thus, the airline continues to be one of the world’s leading airlines and awarded with a Five-Star Airline ranking.2
The Analysis
The Political aspect is involved in the study of the airline’s nature and business. Since every airline considers individual liberty and equality, there are suggested key lessons for the Airline Industry.3
1. Liberalizing markets over different timescales or removing restrictions on operations without removing those on ownership can create distortions and reduce the potential benefits that are available.
2. The structure of the airline industry means that removing operational restrictions can lower barriers to entry to the industry. But it will not maximize the potential benefits to customers, airlines and the wider economy unless ownership restrictions are also removed.
3. Further operational and ownership liberalization can protect and enhance the consumer benefits, in terms of greater choice and lower fares, already obtained from liberalization so far in the airline industry.
4. Liberalization can create the freedom for airlines to operate on a fully commercial basis. This will allow them to allocate capital more efficiently, to respond better to changes in demand in markets and to improve productivity.
5. In a fully liberalized market, the key for an airline is to recognize where its competitive advantage lies and to focus on it. Liberalization provides opportunities for expanding into new markets as well as threats to existing markets.
6. A multilateral approach to liberalization is preferable.
Most of the countries allowed the government to put its power above the industry. The effects are both good and bad. Good in terms, that the governments give advisory to the industry where there is an outbreak like the deadly influenza, and the banning of some person that sometimes forced to self-exile. On the other, it is bad in the business that sometimes the government over power its shares in the industry and controlling the tax burden.
The Environmental aspect also affects upon the operation and even during the construction of these airline. The Aircraft engines emit noise pollution, gases and particulate emissions, and contribute to global warming and global dimming, even though it is one of the least-polluting forms of travel in the world. The airline industry is responsible for about 11 percent of greenhouse gases emitted by the U.S. transportation sector.4
When the Social aspect enters, the question for unemployment can be answered by this kind of industry for the airlines needs more than a hundred of employee. But definitely, there are some positions in this industry that needs license, especially in pilot and mechanical engineering.
The target market, although limited, the industry can create their travel experience in different ambience. They can choose from different classes of passenger’s seat that will be affordable to their tight budget. The travel industry is fully equipped, together with its different travel partners such as the travel agency, which they can offer to their clients.
The Technology line of the Industry is perfectly assured for their clients’ security and safety. Many accidents already happened from the past years, and the declining of the clients’ interest in boarding to an airline is alarming in the business’s part. Some sort of these accidents is blame to the malfunctions of the engine and other parts of the plane. The reliable technology is really needed and the efforts for the continuance progress can lead an airline to recollect the trust from the clients. The industry fully relied in the specialty of the new acquired machines.
The choice of this analysis is based on the PEST Analysis which means Political, Environmental, Social, and Technological aspects which measures the capacity of a business not only in serving the target market but also in the environment that surrounds it.
Economic Overview
Although many countries continue to operate state-owned or parastatal airlines, many large airlines today are privately owned and are therefore governed by microeconomic principles in order to maximize shareholder profit.5
The rise and downfall of an industry is based upon the performance of the business in the past years or how it currently performing. The economy of a country that relied on the tourism industry is also partnered by the travel industry. At some point they are different for the reason that tourism promotes the country’s beautiful sceneries that some presents as a reverie, while the travel industry is the one line to reach a destination. The partnership of two different kind of business are good for they are often comes together. A wise traveler usually booked the place through the use of an agent and the travel agent will do the rest.
The growing industry of tourism is positively affecting the main driver, the travel agents as well as the airlines. And together they will help each other to reach their goals individually.
References:
1. Airlines [Online] Available at: http://en.wikipedia.org/wiki/Airline [Accessed 31 July 2009].
2. The Cathay Pacific [Online] Available at: http://en.wikipedia.org/wiki/Cathay_Pacific [Accessed 31 July 2009].
3. Smyth, M., & Pearce, B. (2007). Airline Liberalization IATA Economics Briefing No.7 [Online] Available at: http://www.iata.org/NR/rdonlyres/C3216440-783D-438E-AF51-7AEC69119B1A/0/IATA_AirlineLiberalisation.pdf [Accessed 31 July 2009].
4. Environmental Impact [Online] Available at: http://en.wikipedia.org/wiki/Airline#Environmental_Impacts [Accessed 31 July 2009].
5. Economic Considerations [Online} Available at: http://en.wikipedia.org/wiki/Airline#Economic_considerations [Accessed 31 July 2009].
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