Aer Arann began in 1970 and it now has an operation p of 600 flights per week across 40 routes. With a leased fleet of 11 aircraft Aer Arann operates on routes in Ireland, UK and Europe (aerarann. com, 2008). Aer Arann now has over a million passengers travelling to and from these three destinations and has established engineering bases in Galway and Waterford. The Macro Environment facing the company
The Macro Environment that the company faces is every evolving. With more and more airlines entering the industry and every airline trying to take market shares from former airlines, every airline becomes very sensitive to the variables of the macro environment that surround them. Foreign policies of different countries make up for a large share of the regions that airlines can gain access to (Bisignani, 2008).
Airlines that have attained access to certain countries that have not supported them have more than often failed to operate effectively and have had to close down. In order to obtain a better understanding of the macro environment that an airline finds itself to be subjected to, a SLEPT analysis will be performed in the coming paragraphs. Social The popularity of air travel is on a continuous increase and is leading to a slow yet steady increase in the growth of the airline industry on a macro scale (The TIMES 100, 2008).
However, a more active observation of the current scenario makes it apparent that international terrorism has served to give this steady increase a decreasing trend. Legal Legal issues for Aer Arann have been handled very cleverly in the recent years as Aer Arann has dealt with legal obligations regarding air craft parts and standards by using third party suppliers and hence saving costs at the same time. Economic The recent economic recession has come as a severe blow to the airline industry.
However, as organizations and institutions steadily begin to decrease interest rates, consumers have begun to opt for air travel more willingly and frequently. Political One of the most important factors of the macro environment that surrounds an airline is the political environment of the countries in which the airline establishes its operations in. A deterioration of the relation of one country to another can result in the closure of routes for airlines of a country and can serve a heavy blow to the airline.
Technological Within the very airline industry itself, the factor of technological remains the most actively sought after of variables. This is so because advancement in technology can result in a massive reduction of costs for the airline and can allow the airline to gain access to more markets and more countries by meeting standards and cutting overheads. Market Characteristics and Trends The airline industry is one of the few markets that show a definite cyclic trend.
Sales volumes are recorded to be at their peaks in summers when a majority of consumers are on vacation and choose to travel for the single purpose of leisure. However, the market tends to become even more profitable around holidays such as Christmas and other such occasions that are of religious and cultural nature. It is around these times that the market is the most productive and market competition is at its highest with almost every airline releasing discount packages for its consumers.