Environmental Scan of Airline Industry
A company’s business environment comprise of its external influences that affect internaldecisions and performances. Depending on the environmental conditions, managers andexecutive decision makers are greatly influenced by the industry’s framework such aseconomical, social, technological, competitive & regulatory factors. To prevent negativeinfluences companies engage in environmental scanning to identify desirable and undesirablefactors to retain cost effectiveness and reduce inefficiency. More importantly the purpose of environmental analysis is to distinguish one’s business from the others by analyzing resources;unique products and service differentiation opportunities; factors for creating value chain andmeans to dissociate from competitors. The airline industry thus can be analyzed from thefollowing perspectives:
Business travelers will spend more in 2009 on their trips, but the rate of increase will be held incheck by current economic conditions, says American Express in its annual global businesstravel forecast released today.The average cost per domestic trip in North America will increase by 1.2% to $1,002 in 2009,the company estimates. Last year, American Express estimated a 3.9% increase for 2008.The average cost per international trip for North American business travelers will increase by3.5% to $3,452. Last year, American Express estimated a 7.8% increase for 2008."Travel costs will not change significantly in 2009," says Hervé Sedky, vice president of American Express, Global Advisory Services.While the cost increase in 2009 will be more "steady," corporate travel managers will continue toscrutinize their spending patterns closely, he says. "Savvy organizations are making sure thattravel not yielding revenue is eliminated or substituted by use of technology."American Express's results mirror other travel survey findings. Earlier this month, the NationalBusiness Travel Association released a survey that underscored travel managers' concern over rising costs. Its members who responded to the survey said domestic trips now cost $140 to$175 more than at the end of 2007. International business travel costs have increased $315 to$400 per trip since December. More than 50% also said new airline fees are encouraging lessair travel and are eliminating all non-essential corporate travel.KDS, a travel and expense management firm, also said a recent survey of "hundreds of clients"revealed that 54% of respondents believe that the financial crisis will force cuts in travelbetween now and March 2009. More than one-third said they have had to cancel booked trips.
_____________________________________________________________________________________ Razi Shoaib