Airline Industry:

The airlines industry provides air transportation for passengers and cargo by using
aircraft such as airplanes and helicopters. The origins of flight date back to
400 B.C., when the Chinese invented the kite, which was used not only for fun but
also to test the weather, and for later development of balloons and gliders.

The airlines industry is structured into three main components: commercial,

general, and military. Commercial aviation includes national carriers such as Delta
and American, and regional carriers like Go Jet and SkyWest Airlines. Commercial
airlines may also focus on other areas of business, such as crop dusting, fighting
forest fires, and rescue operations.

In 2009, the commercial aviation industry entered a golden age. Between 2009 and
2017, revenue in the global aviation industry grew at a compound annual growth
rate of around 5.9 percent, reaching 754 billion U.S. dollars in 2017.

PESTLE Analysis of Airline Industry

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.

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.

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.
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.

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.

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.

Top Aviation Companies in India

 Spice Jet (13.3%)
 Indigo(49.9%)
 Jet Airways(11.9%)
Future of the airline industry
The Future of the Airline Industry 2035 study commissioned by IATA’s Industry
Affairs Committee aims to help airline management anticipate the key risks and
opportunities that their businesses could face between now and 2035.

The Future of the Airline Industry 2035 is nevertheless an essential companion in

deliberations at airline and industry level. Most importantly, it can help guide
airline strategy by introducing the many elements that must be considered in the
longer term.

Financial prospects of airline industry:

 India's aviation industry is expected to witness Rs 35,000 crore (US$ 4.99
billion) investment in the next four years.
 The Indian government is planning to invest US$ 1.83 billion for
development of airport infrastructure along with aviation navigation services
by 2026.