ASSAM DOWN TOWN UNIVERSITY

GUWAHATI, ASSAM

ASSIGNMENT OF INTERNATIONAL BUSINESS ENVIRONMENT

ON

The environmental factors of Airline Industry in India and how these factors
are going to affect this Industry from business of view .
The recent era of economic depression shook all industries and airlines’ industry was no
exception. 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.

Political Environment
In most countries, there are strict regulations for the aviation industry. This is mainly
because of the risks associated and which can result in deaths or accidents or any irreparable
damage. Several policies have been devised to protect passengers more than the aviation
industry. Insecurity or war factors that affect particular countries always have a negative
impact on the airline industry. This is a major obstacle as airlines will start losing customers in
areas that have high-security threats.
Economic Factors
Economic factors have a deep influence on the airline industry. The recent economic recession made the
travel market to see its lowest period. Both economy and premium travelling declined. Additionally, airlines
were also under the pressure to cope up with the increasing fuel prices. These factors made it difficult to
generate profits. Moreover, airlines also struggled with increasing labour demands from the part of
employees. All these economic factors resulted in increased bankruptcies of major airline companies.

Social Factors
Airlines also create social values like any other business as the consumer of today has changed. In order to
meet the changing demands of consumers, airlines are required to incorporate changes. Now passengers
prefer those airlines which are providing extended services at low fares. In the past few years, there has
been a reduction in business class travelling which is a huge loss for the companies. Automation is yet
another factor affecting the airline industry as people make use of Skype features or hold a conference call
instead of travelling.

Technological Changes
The importance of technological factors can be understood from the heavy use of technology in the global
airline industry.
Passengers now prefer to access ticketing and check-in services through their hand-held devices instead of
forming a line or booking manually. The aviation industry also conducts advertising campaign on the social
platform for attracting more clients. Failing to be tech-savvy can result in loss of clients. Additionally,
technology also means that aircraft are lighter which provide speed and fuel economy. Increased
technological advancements can make airlines gain profits through offering safety and enhanced services.
Legal Issues
Similar to economic or political factors,
legal factors also hold special importance for analyzing the external environment of the airline industry.
There are many laws devised for air traffic and the safety and security of passengers. There are many
regulations which require airlines to offer safe travel along with high-quality services. Airlines are made
responsible for air crashes or any other type of damage or disaster. Many laws have been proposed which
regulates how the airlines treat its passengers.

Environmental Aspects
Ecological factors impact the airline industry the most than any other industry. Fuel is a very major
expenditure of the industry and airlines are required to invest more in environmentally friendly and
fuel-efficient aircraft. Climate changes also have an impact on the aviation industry as airlines are now
required to practice ‘green flying’ procedure for protecting the environment. This process involves huge
finances; however, airlines cannot even compromise because even the passengers are held accountable
for their carbon footprint.

SUBMITTED BY:

DHANRAJ BISWAKARMA
ENROLL NO : ADTU/2022-23/BBA(I)/031
TO,
NILAKSHI TERON (MA’AM)