Secondly the amount of economic activity in the economic environment is extremely important. Whilst assessing the economic environment in which different business operate. The government tries to terminate the level of economic activity to provide a positive and friendly environment for business. The main issue that would affect the airline industry, that would be seen as a short term effect would be that a company share values have decreased rapidly. However this is not a long term worry, as things would eventually start getting back to normal, share value would increase. The British economy has lost put, as many people are scared to fly into America, and therefore the demand is low to travel, however the supply is high, this could be a dangerous factor for the small airline companies that do not have enough funding in the first place, now they are literally on the verge of bankruptcy. Since September 11th the economic effect since the terrorist attacks on America is clear for all to see: lives lost, people injured, families bereaved, a nation suddenly made to feel vulnerable. More easily forgotten are those whose livelihoods depended on the thriving financial centre of New York that the twin towers dominated. Thousands of jobs have been lost and businesses closed. Many other businesses are still struggling on the brink of bankruptcy. For the individuals directly affected, the catastrophe was huge.
The links with the economic factor being hat many job cutbacks will be made and therefore meaning that people will have less money to spend as a whole the economy could possibly be in recession in the future. However short term major problems have been caused to airlines with their share prices plummeting due to the disaster. British Airways have also had to decrease ticket fares to ensure they are able to make a profit in some shape or form. Therefore they have lost out on tremendous amount of money mainly because of the fact that people are scared to travel. Also long term, airline companies have to prepare for the fact that share prices may never reach the same level or an adequate level. Also many flights were cancelled meaning that many customers had to stay in hotels. However, this provided to be a positive point for many hotel owners as they were able to charge a higher rate, as they knew many people were desperate fro somewhere to stay.
Thirdly the social environment is of great importance when being applied to different organisations, in case the airline industry. The short term affect that the social factor has on the airline industry is that, people have cut down on using flying as a mean of travel after the September 11th incident. Many of the flights have been cancelled from America, this resulting to financial difficulties for the airline companies, especially those of America, e.g. American Airlines. The long term affect that is going to have is that if there are not as many passengers, then the amount of staff that the companies have hired are no longer needed. However there are some people that have not been affected by the September 11th incident, many people have taken this as an advantage, of cheaper tickets. This however is a short term affect, due to as soon as services are running back to normal prices will effectually increase again, however this may not always be the case as British Airways have given out statistical figures that have lost out in 20% passengers since September 11th, which is not good for a fast growing company, and most of their profits are relying on the number of passengers they get in each day.
The social factor linked with this stops is also linked with economical factor being that with everything that has happened people are scared to travel and social wise money spending will be decreased as many people working in the airline industry will no longer have the appropriate means to do so due to the decrease of jobs. Looking at the social factor in depth shows that short term people have stopped using aeroplanes as a means of travel in the aftermath of the attacks, many flights have been cancelled the long term could lead to financial problems as airline companied lost out on thousands of pounds.
The fourth and final sector involved in the PEST analysis is the technological environment which has put pressure upon the airlines industry especially after the attack. Technology has always been a highly used by airlines and airports to ensure safety of passengers through checks of passengers, passports and luggage using the machinery available. Also CCTV cameras are a large past of the technology measures used by airports.
Technology has rapidly advanced over the past few years and is continuing to do so. Organisations whether large or small have been affected and are unable to operate within the latest technology. Airports have taken out the time and the costing of increasing technology, so that security in airports is at the tightest. This has proved to be a success as recently a man was caught at the airport with weapons at Heathrow Airport in his luggage. There also have been reports that security has been upped in all major London airports if there is going to be a war against terrorism with Iraq.
This is seen as a long term effect, as no matter how quickly things go back to “normal” airports are not going to be taking the chance to see a repeat of the incident in New York. This is a positive affect, as due to the security tightening, it will make the public more aware that security is tight, therefore they should feel more comfortable and secure about travelling.
In the short term airports placed more security guards on duty with some weapons in case of further attacks however in the long term they will need to look at technology and see what they could improve to make sure that terrorists are not allowed to do such a thing again that affected many peoples lives not just Americans
Looking back at this essay, I have come to the conclusion that it can be drawn that there are not many positive effects that can be applied to the airline industry from the PEST analysis. Most of the negative effects that have discussed are mainly short term, however the positive factors are yet to come out of the negative, and are more to take in action in the future, and those are the long term affects. The terrorist attack that took place in America has created many problems for the airline industries, and therefore the future of most airlines does not look very bright, not for a long time anyway. A considerable among has to be done in order to bring back customers, and to reassure them that travelling is as safe as it has always been, and that full force is put into place to make sure that an incident like this does not occur for the second time. Although there have been other plane disasters since the terrorist attacks but has not had that much of an impact as the September 11th attack as they have just been crashes that have happened due to the aeroplanes mechanical fault.
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