This paper holistically explores the strategic management issues of U.S. Airline Industry. The paper presents the international business trade theories ans attempts to discuss the FDI in U.S. Airline Industry. It also attempts to highlight the marketing 4Ps and discusses the strategies implemented by U.S. Airline Industry.
International Business Trade Tehories
The ruling on providing food, accomodation and compensation for passengers who had their flight got cancelled was the legislation with the greatly impacted U.S. Airline Industry. Introduced in February 2005, and being unsuccessfully challenged by various bodies that were representing below-cost carriers who focused mainly on the ambiguous wording in law and stated that it was being exploited by airlines. This is so because the rules are not applicable if cancellation was with the reason of safety, which is mostly the reason given by airlines in cancellations when the real reason would qualify passengers for the compensation (Shaw, 2011, pp 299 - 304).
The United States politics are particularly important as U.S. Airline Industry is operating in innumberable countries across the globe. The deregulation of airline industry gave way to new opportunities for airlines across America in order to compete with each other. This allowed airlines from one member state for the purpose of competing wit others on domestic routes (Belobaba, Odoni & Barnhart, 2009, pp 480 - 487).
Tax policy is another possible problem for U.S. Airline Industry. Many economists put forward the argument that in comparison with most transportation forms, aviation is much undertaxed. They also state that concerns over airports and air traffic capacity make it difficult to manage the increasing flights, and impacts the environment (Shaw, 2011, pp 299 - 304).
As an American operation, U.S. Airline Industry has several of its operations not being affected by the fluctuating exchange rates, even though it is operating internationally. U.S. Airline Industry addressed the issue of oil prices statign that it is a big problem for all airlines (Belobaba, Odoni & Barnhart, 2009, pp 480 - 487). The overall impact is that of insurance. However, U.S. Airline Industry has recently being relying on cash reserves in ordet to deal with the rise in unhedged oil price, which affects profits (Shaw, 2011, pp 299 - 304).
Major cultural changes have been effected across the United States of America. This not only opened opportunities for the many migrant workers, but also expanded the market for U.S. Airline Industry. Apart from that, many people migrate from less affluent European countries to the west, who are likely to be travelling back to their homes often on cheap tickets. This is a gret plus for the U.S Airline Indusrty as increase in the number of visits home these people make on yearly basis adds to the profit of airline industry (Shaw, 2011, pp 299 - 304).
Foreign Direct Investments (FDI)
Foreign Direct Investments (FDI) is a notable feature of the U.S. Airline Industry. FDI is an important factor for any industry as it strengthens the position of industries due to the fact that a lof ...