Free Business Dissertations - Pest, Porter’s Five Forces, Stakeholder And Swot Analysis Of American
Pest, Porter’s Five Forces, stakeholder
and SWOT analysis of American Airlines
CONTENTS
Glossary
Abstract ..... 2
Chapter 1 American Airlines ... 3
PEST Analysis .... 3
Porter’s Five Forces .... 4
Stakeholders Analysis . 6
SWOT Analysis .. 7
Chapter 2 Conclusion ... 8
Bibliography .... 10
Abstract
The airline industry has always been and continues to be the most fiercely competitive business sector in all facets of its operations. Operating on paper thin margins the drop in passenger traffic brought on by the events of September 11th, 2001 have affected domestic United States airlines as well as all global carriers. The events of that day have caused governmental intervention in the form of loan guarantees, compensation for terrorist attack losses, as well as insurance related to war risk (Shane, 2003). The Associate deputy secretary of Transportation stated that the industry is in its worst financial crisis(Shane, 2003), since the industry was deregulated in 1978. It is important to understand that two differing types of airline carriers exist in the United States. The majors refer to airlines earning revenues in excess of $1 billion USD annually and generally they provide national as well as international service. These airlines cater to the business class customer and passengers who either expect or desire full in flight services such as meals and related amenities. American Airlines, Delta Air Lines, United Air Lines, U.S. Airways, Continental Airlines and Northwest Airlines fit these designations (Mayer, 2002). The discount air carriers have changed the face of the airline industry with their no frills, low-cost airfares and have put pressure on the majors in terms of eroding their market share.
The preceding battle between discount carriers has further exacerbated the majors thin operating margins and has resulted in Delta, Continental, Northwest, United and US Airways (Beck, 2005) filing for protection under Chapter 11 of the United States bankruptcy laws while they restructure and renegotiate union contracts and creditor agreements. United States Senate Commerce Committee Chairman John McCain has stated that the United States government should be reluctant to do anything that might keep inefficient businesses afloat (Shane, 2003). This is the climate in which the subject airline, American Airlines operates.
Chapter 1 American Airlines
PEST Analysis
The utilization of a PEST analysis with regard to American Airlines takes into account the political, economic, social and technological (NetMBA, 2004) environment the industry is embroiled in and how this has, is and will threaten to impact its operations and profitability. It must be remembered that the number of possibilities concerning macro-environmental aspects is almost limitless, thus concentration will be paid to those areas perceived to have the highest impact.
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