MBA 620
Module Four
Business Environment Analysis Report
Southern New Hampshire University
Professor Jon Cooper
Lysa Perkins
November 10, 2024
Introduction
As the controller of a division of TransGlobal Airlines, my position takes me to the
possible acquisition of two identified small airlines in the Caribbean specializing in charter
flights. Therefore, I will explore several analytical techniques organizations use to analyze
internal and external environments, allowing their decision to be effective and less risky.
The3PESTEL analysis of the Airline industry3can give an idea about how multiple
external factors like politics, economy, sociology, technology, ecology, and law can affect the
business of an airline company.
Political Factor:
One political factor that TransGlobal Airlines faces is regulations and restrictions. Like
any other organization, you can rest assured that the government is involved. The airline industry
is impacted by rules and restrictions related to international trade, tax policy, and competition.
Meanwhile, TransGlobal operates in a global environment, providing service for 52 countries
across six continents. 3Most tourists are not interested in visiting countries that are threatened by
political conditions. The airline may lose customers because of the lack of security to those parts,
and customers not flying to those areas could impact the need to purchase a new aircraft and can
have a profound effect on a company’s growth prospects and long-term outlook.
Economic Factor:
One important economic factor is a recession. Recession and unstable economic
conditions can severely affect the airline industry. The number of passengers may decrease3for
many reasons. One reason was the pandemic (COVID-19), it was devasting to the
industry. The number of air passengers reduced by 60.23% compared to 2019, leading to a
system-wide load factor of 65.13%. Once the pandemic was over, the airline industry fully
recovered. A congeneric acquisition could mean a growth in market share.
One sociological factor is to safely re-introduce and promote the MAX 737 aircraft.
Many passengers are already fearful of flying, and MAX 737’s reputation of safety issues,
including 346 deaths reported, just adds to the situation. The potential impact of re-introducing
the MAX 737 could be risky because of legal lawsuits.
Technological Factor:
Technology is everywhere in business and is rapidly changing. The airline industry
provides its customers with excellent customer service by having proper technology available,
such as apps that will allow customers to self-check in, flight status, lodging, and attractions.
Customers want relaxation when traveling; implementing such apps will definitely increase sales
and revenue growth as well as customer satisfaction.
Environmental Factor:
More businesses are adopting environmental sustainability, which focuses on the
3 P’s – Planet, People, and Profit. TransGlobal is interested in accelerating the adoption of fuel-
efficient aircraft and alternative fuels. This is a plus since more businesses are more
environmentally friendly. Jet A fuel is cheaper and easier to transport. One impact of this
acquisition could be the supply and demand. This could truly lead to the inability to operate if the
fuel is not available, further leading to the inability to service passengers and decreasing profits.
Legal Factor:
Following rules and regulations in any organization is vital. Certain industries
have standard rules to follow, and the airline industry is no different. Regulation and standards
are necessary to ensure the safety of airline operations and to ensure the safety of passengers.
TransGlobal’s acquisition of two new aircraft to avoid any legal backlash must make sure the
companies acquired completely follow all regulations and standards in compliance with the
Federal Aviation Administration (FAA); the impact could possibly lead to TransGlobal losing its
license to operate in the Aviation Industry.
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