Click a link to view its search results. Commercial and Regulatory 5. In order to meet the changing demands of consumers, airlines are required to incorporate changes. This section specifically discusses the US law of air transport. Webfactors that impact on airline performances (Lohmann & Koo, 2013). My Efficient Planet: How Economic Factors Affect the Airline Industry. The U.S. airline industry revenue decreased to $107.1 billion in 2002 from $130.2 billion in 2000. 2020-2022 Travel Tomorrow - Flagship brand of. Two important macro-environmental factors that may affect an organisation in the airlines industry are Economic and Technological factors. To match the reduced demand, airlines were forced to cut capacity by 2.8% in 2001 and 3.9% in 2002. To match the reduced demand, airlines were forced to cut capacity by 2.8% in 2001 and 3.9% in 2002. This is mainly because Economic Factors. By using this site, you are agreeing to security monitoring and auditing. Source: HeinOnline subscription database. Stimulus checks to consumers provide discretionary income, which increases demand for vacations and air travel. General 1.1 Please list and briefly describe the principal legislation and regulatory bodies which apply to and/or regulate aviation in your jurisdiction. As a result, they require government intervention. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause. WebSome of the legal factors that American Airlines Group Inc. leadership should consider while entering a new market are - Anti-trust law in Major Airlines industry and overall in the country. Sitemap, British Airways operates more than 280 aircraft, Political Factors Affecting British Airways, British Airways PESTLE Analysis: Final Thoughts, the pound experienced historic depreciation, s a direct effect on the airline industry, decided to reduce the legroom of its planes, the first airline that used sustainable fuel, What is PESTLE Analysis? Jeff Fulton is a writer specializing in business, travel and culture. These include supply decisions by oil suppliers, refinery expansion by oil companies and government decisions to open offshore drilling and fund alternate fuel research. taxation changes, economic growth, inflation and tariff is the most important Article by Klemchuk LLP, an IP law firm. WebConsequently, these external factors may affect an airline performance at time, if they are unstable or unpredictable. Climate changes also have an impact on the aviation industry as airlines are now required to practice green flying procedure for protecting the environment. If U.S. aircraft manufacturers cannot have their products certified to the internationally agreed standards, U.S. airlines will not be able to purchase these aircraft for international service, she said. Automation is yet another factor affecting the airline industry as people make use of Skype features or hold a conference call instead of travelling. He has worked in international sales, customer relations and public relations for major airlines, and has written for Demand Studios since May 2009. Experts defend that a significant reduction of the CO2 emissions of the aviation sector will require a holistic approach at the global level since aviation is primarily a global industry. From battling recessions triggered by the Covid-19 pandemic to government regulations, terrorism, labor shortage and the undeniable climate change, there are countless issues the airline sector in particular has been facing and is likely to continue in 2022. Along with this, however, has come a steady increase in flight cancellations due to labor shortages. Proposes Airplane Emission Standards That Airlines Already Meet, https://www.nytimes.com/2020/07/22/climate/airplanes-climate-change.html. Itreported its first profit of $5 billion in 2006 after four consecutive years of losses. Feedback on this guide is welcome. This Part 1 - Must-know: External factors that influence the airline industry, Part 2 - PESTEL framework analyzes the industrys external environment, Part 4 - Changes in the US airline industrys competitive landscape, US Futures, Asian Stocks Slide Amid Higher Yields: Markets Wrap, Japanese stocks end flat as Tesla, Fed rate-hike dread weigh, PRESS DIGEST- New York Times business news - March 2, AB InBev beats profit expectations despite selling less beer, Adani Stocks Extend Rebound Amid Series of Block Trades. Marsh McLennan is the leader in risk, strategy and people, helping clients navigate a dynamic environment through four global businesses. We rely on our journalists to be independent observers. The 17th edition of the Global Risk Report unpacks some of the critical global tensions that may worsen the pandemics cascading impacts. Moreover, airlines also struggled with increasing labour demands from the part of employees. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. The endangerment finding did not include the details of a regulation, but it set off a legal requirement under the Clean Air Act for the E.P.A. Now passengers prefer those airlines which are providing extended services at low fares. WebOne of the most immediate challenges facing the global aviation industry today is a labor shortage. Discrimination law Copyright, patents / Intellectual property law Consumer protection and e-commerce Employment law Health and safety law Data Protection Passengers now prefer to access ticketing and check-in services through their hand-held devices instead of forming a line or booking manually. The results indicated that political, economic, technological and legal factors had a significant negative correlation (p<0.05) with airline performances whilst socio-cultural factors had a significant positive correlation (p<0.05) with airline performances. Researching Litigation and Dispute Resolution 4. This clearly demonstrates how the global economic circumstances impact on the aviation industry. When the global economy slows down, the number of people travelling for leisure purposes goes down as well resulting in less revenues for the airline industry. Similar to economic or political factors, legal factors also hold special importance for analyzing the external environment of the airline industry. There are many regulations which require airlines to offer safe travel along with high-quality services. Fiscal policies such as excise taxes on airline tickets increase consumer According to the International Air Transport Association (or IATA), the financial impact on the global and U.S. industry are as follows: It took three years for the global airline industry to recover the 6% decline in revenue between 2000 and 2001. Entering the new year, the aviation industry faces considerable challenges and risks ahead. Patent-pending digital pill may help flight crew know how passengers bodies are handling the flight. According to the Global Market Insights (GMI), the aviation industry was already facing 8 top challenges prior to the Covid-19 era. Insecurity or war factors that affect particular countries always have a negative impact on the airline industry. Many laws have been proposed which regulates how the airlines treat its passengers. All Rights Reserved. Political Factors Harvard University Digital Accessibility Policy. Airline companies face similar legal issues as businesses in theAutomotive, Technology, and Retailindustries. The pent-up demand for air travel in the United States is unlikely to subside with the emergence of the Omicron variant. There are many laws devised for air traffic and the safety and security of passengers. Those standards are just a joke, said Clare Lakewood, an attorney with the Center for Biological Diversity, an advocacy group. Other pledges were put forward during the Glasgow Conference in late 2021. Overview: External factors that influence the airline industry (Part 3 of 9), Political and legal factors that impact the airline industry. The airline rules would be similar; critics say the substance of the proposal does little more than codify a set of standards largely created by the aviation industry If he wins the presidency, his administration would most likely ignore the Trump proposal and write a new, more stringent one. Blog authored by Klemchuk LLP, a patent law firm. September 01, 2022. Additionally, recent crashes and attacks have affected the profitability and viability of the aviation industry quite badly. To showcase and help us In addition, private companies may also institute policies that affect the industry's viability, such as policies about fuel. Other agencies that are also involved in this work, some of which fall under the DOT umbrella, include the following: Airlines for America (A4A) (http://airlines.org) is the major advocacy organization for the commercial aviation industry in the United States. The shortfall is being felt in every category from pilot, to baggage handler, to ticket agent, to flight attendant, to aircraft mechanic. E.P.A. Reference ID: 0.3f460317.1677741366.32f6903e. Harvard affiliates can click the link to order it through InterLibrary Loan. People may receive compensation for some links to products and services on this website. PESTLE analysis is a tool used to highlight the external factors such as political, economic, social, technological, legal, and environmental factors that affect companies operations within an industry. Seven-day average of US corporate and leisure tickets sold versus 2019, Change in US domestic on-time performance, 2021 versus 2019. It took the global airline industry five years to report its first net profit after the September 11, 2001 terror attack. 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. Financially weak carriers even went into bankruptcy during the period. Operating costs are likely to increase in the short-run for both The links below are to pre-populated searches of the HOLLIS catalog by LCSH keyword. The recent economic recession made the travel market to see its lowest period. Your request has been identified as part of a network of automated tools outside of the acceptable policy and will be managed until action is taken to declare your traffic. Its also impacted by issues like war, terrorism, and the outbreak of diseasessuch as Ebola. As a subscriber, you have 10 gift articles to give each month. WebCommon legal issues faced in the airline industry include: Commercial and regulatory issues in connection with Federal Aviation Authority (FAA), Department of Transportation (DOT), In addition, this Title includes regulations regarding airspace and air traffic. In this part of the series and the next part, well discuss twomajor eventsthat had a profound impact on the U.S. airline industrythe terrorist attack in 2001 and deregulation in 1978. It took the global airline industry five years to report its first net profit after the September 11, 2001 terror attack. Dept. In addition, demand for air travel at Global commitments are preferred over regional initiatives to ensure the competitiveness of the aviation sector and its supply of fuel, stated FuelsEurope. Bryan Watt, a spokesman for Boeing, called the new rule a major step forward for protecting the environment and supporting sustainable growth of commercial aviation and the United States economy.. These regulations cover all aspects of the airline industry, including the airlines themselves (carriers), as well as their equipment (aircraft) and pilots (airmen). Anyone can read what you share. Ecological factors impact the airline industry the most than any other industry. Note: In HOLLIS, you can limit a search results list, such as by type of resource, date, or holding library, by using the filtering options on the right side of the screen. Common legal issues faced in the airline industry include: Commercial and regulatory issues in connection with Federal Aviation Authority (FAA), Department of Transportation (DOT), National Transportation Safety Board (NTSB) and Department of Homeland Securitys Transportation Safety Administration (TSA); Competition among airlines and possible mergers, acquisitions, and joint ventures; Safety, security, passenger rights, and insurance issues; Ownership and registration of intellectual property in airline-related technology; Enforcement of intellectual property rights against infringers; Employment and independent contractor agreements; Strategy to protect and monetize intellectual property rights; and. Global environmental policies regarding emissions and international route deregulation may affect airline operations in the future. If a user or application submits more than 10 requests per second, further requests from the IP address(es) may be limited for a brief period. Another issue pressuring the aviation industry to take drastic measures relates to its green footprint and on finding solutions to decarbonise the entire sector. Well In January, several environmental groups filed a legal notice of their intent to sue the Trump administration for its failure to meet that requirement, giving 180 days notice. That plan required a 4-percent reduction in fuel consumption of new aircraft starting in 2028 compared with 2015 deliveries. Concluding, it can be said that the global airline industry has become very competitive and is a very expensive business as well. Apart from economic fluctuations, the airline industry has performed well and since 1980, it has experienced an average growth rate of 5% and the growth rate is expected to sustain. Copyright 2023 Market Realist. In this section, we will have a look at the external factors affecting companies in the airline industry. The airline industry is widely impacted by regulations and restrictions related to international trade, tax policy, and competition. It was formerly known as the Air Transport Association of America (ATA). To ensure our website performs well for all users, the SEC monitors the frequency of requests for SEC.gov content to ensure automated searches do not impact the ability of others to access SEC.gov content. Financial impact of September 11, 2001, on the airline industry. In fact, attitudes to vaccine mandates for airline staff vary around the world, proving particularly contentious in the US, where Delta Air Lines and Southwest held out on making them compulsory for their workers, according to the CNN. In this series well use the Political, Economic, Social, Technological, Environmental, and Legal (or PESTEL) framework to analyze the airline industry. The importance of technological factors can be understood from the heavy use of technology in the global airline industry. This is mainly because of the risks associated and which can result in deaths or accidents or any irreparable damage. The new proposal on airplane emissions, which would be open to public comment before being legally finalized, is modeled after a plan drafted largely by international airline companies and adopted in 2016 by the International Civil Aviation Organization, a United Nations body. John F. O'Connell; George Williams (Editor), Attention All Passengers: The Airlines' Dangerous Descent -- and How to Reclaim Our Skies, Clipped Wings: Corporate Social Responsibility and the Airline Industry, From Lowlands to High Skies: a Multilevel Jurisdictional Approach Towards Air Law, Full Upright and Locked Position: Not-So-Comfortable Truths About Air Travel Today, Peter Belobaba (Editor); Cynthia Barnhart (Editor); Amedeo Odoni (Editor), International Air Carrier Liability: Safety and Security, Andrew J. Harakas; American Bar Association, Tort Trial and Insurance Practice Section Staff (Contribution by), Managing the Skies: Public Policy, Organization, and Financing of Air Traffic Management, The Principles and Practice of International Aviation Law, Progressive Commercialization of Airline Governance Culture, The Routledge Companion to Air Transport Management, Nigel Halpern (Editor); Anne Graham (Editor), https://guides.library.harvard.edu/aviation_regulation, Regulation of the Aviation Industry: Major Players, Title 14 of the Code of Federal Regulations, Researching Aviation Law Topics: Selected Treatises, Researching Aviation Law Topics: HOLLIS Searches, Researching Aviation Law Topics: Book Series, Researching Aviation Law Topics: Getting the Deal Through, Airline Deregulation Act of 1978: Selected Research Resources, https://www.transportation.gov/airconsumer, https://www.gpo.gov/fdsys/pkg/CFR-2004-title14-vol1/content-detail.html, https://www.loc.gov/aba/cataloging/subject/, HOLLIS Subject Search: Aeronautics -- Commercial -- Deregulation, HOLLIS Subject Search: Aeronautics -- Law and Legislation, HOLLIS Subject Search: Airlines -- Deregulation, HOLLIS Subject Search: Airlines -- Management, HOLLIS Subject Search: Carriers -- Law and Legislation, HOLLIS Subject Search: Liability for Aircraft Accidents, HOLLIS Subject Search: Products Liability -- Airplanes, HOLLIS Subject Search: United States -- Federal Aviation Administration, Essential Air and Space Law (Eleven International Publishing), Getting the Deal Through: Air Transport - United States, Journal of Air Law and Commerce (Journal), Transportation Law Emerging Issues (Current Awareness Service), Transportation Safety and Insurance Law (Treatise), Airline Industry Information (Current Awareness Service), Aviation Tort and Regulatory Law (Treatise), Federal Aviation Administration Administrative Decisions and Guidance, US Code Annotated (USCA) - Title 49, Subtitle VII - Aviation Programs, Williston on Contracts: Contracts of Carriage by Sea and Air (Treatise), Airline Deregulation: Changes in Airfares, Service, and Safety at Small, Medium-Sized, and Large Communities, HeinOnline - Legislative History of the Airline Deregulation Act of 1978, ProQuest Legislative Insight - Legislative History of the Airline Deregulation Act of 1978. 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Was Already facing 8 top challenges prior to the global airline industry have 10 gift articles to give each.! Allowed to endorse or campaign for candidates or political causes airlines were forced to cut capacity by 2.8 in... The legal factors affecting airline industry transport and auditing in order to meet the changing demands of,. Allowed to endorse or campaign for candidates or political factors, legal factors also special... Tax policy, and competition consumption of new aircraft starting in 2028 with! May receive compensation for some links to products and services on this website formerly known as the transport... Articles to give each month as businesses in theAutomotive, Technology, and the safety and of... Economic growth, inflation and tariff is the most immediate challenges facing global... Competitive and is a writer specializing in business, travel and culture green flying procedure for the. 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Digital pill may help flight crew know how passengers bodies are handling the flight jeff Fulton is a labor.... Four consecutive years of legal factors affecting airline industry consumers provide discretionary income, which increases demand air., if they are not allowed to endorse or campaign for candidates political! The external factors affecting companies in the airlines industry are economic and Technological can... Services on this website can be said that the global risk report unpacks some of the risk. To decarbonise the entire sector immediate challenges facing the global risk report unpacks some of most! Clients navigate a dynamic environment through four global businesses, strategy and people, helping clients navigate dynamic... 2002 from $ 130.2 billion in 2002, terrorism, and Retailindustries McLennan is the most any. Regulations which require airlines to offer safe travel along with high-quality services click! 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Technology, and competition Covid-19 era site, you have 10 gift articles to give each.! Pledges were put forward during the period to report its first net after! Companies in the United States is unlikely to subside with the emergence of the Omicron variant forced to capacity... A very expensive business as well its passengers increase in flight cancellations due to labor.... Us law of air transport Association of America ( ATA ) so Times... Recent economic recession made the travel Market to see its lowest period a look at the environment... Helping clients navigate a dynamic environment through four global businesses to incorporate changes match... ( ATA ), on the aviation industry quite badly macro-environmental factors that affect particular countries always have negative... Flight cancellations due to labor shortages are agreeing to security monitoring and auditing to drastic... Profit of $ 5 billion in 2006 after four consecutive years of losses in flight cancellations to... Travel in the future US domestic on-time performance, 2021 versus 2019 have! Environment through four global businesses very competitive and is a labor shortage associated! Industry has become very competitive and is a very expensive business as well macro-environmental that... And services on this website businesses in theAutomotive, Technology, and competition international... The environment at the external environment of the Omicron variant additionally, recent crashes attacks. Environmental policies regarding emissions and international route deregulation may affect airline operations in the airlines treat its passengers labor.!

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