The Marketing Environment

PESTE Analysis:
Political
Economical
Social
Technological
Environmental
The airline industry is deeply involved
in those 5 topics or environments.

1
 PESTE - Political
This is a very highly political industry (remember the
bilateral agreements/deregulation/opensky, etc.)
Terrorism fear and political instability
Airspace closed for 4 days
Fear of further attacks caused lower demand both
domestic and international
Ware in Irak and Afghanistan
The concept of War on Terror worsened or solved the
problem?
Discussion about the relationship between airlines and
terrorism.
The airlines dont have control over the size of the
market.
Security cost burden

2
 PESTE - Political
Airport Slot = a pre-agreed time for a takeoff
of landing to take place at a particular
airport.
What does a landing slot involve? Landing?
Taxing? Deplaning pax all the way thru
Immigrations? Offloading cargo and bag?
How are slots awarded? Who are involved?
Airport authority
Air traffic control authority
Maximum capacity for the airport
What about Immigrations/Customs?

3
 PESTE - Political
Slot Allocation: Grandfather Rights
2 seasons:
Summer from April 1 to October 31
Winter from November 1 to March 31
Minimum of 80% of utilization
Automatically renewed for the next year
The big airlines have slots awarded on an
in perpetuity basis.
we cannot give away our slotwere
gonna get a new aircraft in 3 years, for
28 years!!!
4
 PESTE - Political
Airport Slot Allocation
The re-allocation of slots/slot auctions, etc.

New York Airport Slot Assignment

For the purposes of the auctions, a Slot
is an operational authority to conduct a
single Scheduled Operation, seven
days a week, during a specific 30
minute period at a specific airport.

5
 PESTE - Political
Buy and Sell concept
Selling something we do not own and
didnt pay for ithmm
Governments step in saying it is
national property, you pay us, like with
cell phone licenses
Financial power of the big airlines vs
small ones

6
 PESTE - Economical
Macroeconomic system:
As the world economy grows so does the demand
for air travel (hopefully).
As a manager, will you be able to exploit this
demand and opportunity? (see PESTE
Environmental factors)
Lets discuss what is happening now and the impact
on labor, demand, costs, type of travelers, etc.
What about Boeing and Airbus (2004)?
What about new class of services? P66 of Marketing
and Mngt (MAXjet).

7
 PESTE - Social
Ageing Population (in developed countries):
provisions/services for disabled pax, needing
medical care and help at airport, etc.
New class of customer?
New type of ads?
Changing Family Structures Western
Society:
Divorce involves one-parent families
More singles
Change Tastes and Fashions in Holidays
Pursuing hobbies while on holidays
Various lengths of stay

8
 PESTE - Social
Labour/Job Market:
One-day trip as opposed to a two day trip
(influences the flight times)
Some have time and no money, some
have money and not enough time.
The female Business Traveler
Bigger focus on product details (amenity kits)
Change in marketing ads
Checked bags more than men

9
 PESTE - Technological
Video-conferencing
The Internet
Biggest question: will it be THE
distribution channel?
Bye bye GDS?
Surface Transport Investment

10
AirTran Conference Call

11
 PESTE - Environmental
Climate Change and Global Warming:
If it becomes hot and nice where you
live, why would you go somewhere else?
Carbon dioxide emission issue

Virgin Atlantic handouts (2)

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