operating HW

Environment

Threat (& why?)

Opportunity (& why?)

Economic

Personal savings dropped → decrease in demand for flights;

Decline in cargo yield → impacts overall revenue from freight

traffic

Largest and one of the richest economies → less elastic demand, people are willing to pay relatively more; Low inflation → relatively stable business environment; High EUR/USD → advantage over European airlines in prices; Positive growth in GDP + people increase their spending→ rise in revenues

Low oil price → reduces cost

Political / Legal

Heavy tax burden → lower margins; potential terrorist threat → higher risks, higher security costs, lower willingness of people to fly; International regulation → restricted markets, higher costs of foreign airlines; Restrictions on international M&A → impediments for free growth; Some foreign markets have tougher regulations → higher costs

Deregulation of 1978 – more flexibility in initiating and running business; Remaining regulation positively affects security and accessibility of domestic markets; “Unprofitable” flights to some locations may be subsidized

Technological

The level of technological development in the industry is very high

→ ability to meet requirements of different constituencies (safety of flights, comfort for VIP passengers, easier operation of the vehicle, low noise, lower pollution, fuel efficiency)

Opportunity for technology oriented manufacturers and suppliers

Sociocultural

Air travel as a mode of transport is high only for long distance

trips→ low margins for short distance flights

U.S. territory is large and long distances are preferred to be covered by air; Except for personal business, air transportation dominates other transportation means; Smart technological policy may pay off by reducing fuel expenses and meeting social demands

PESTEL

Threat (& why?)

Opportunity (& why?)

Political

Economic

Sociocultural

Technological

Ecological

Legal