Pestael Analysis for Friance Airlines

PESTEL Analysis for Air France- KLM:

Corporate Profile:

Through the merger of Air France and KLM in the year of 2004, the Air France-KLM group has become the industry leader in the area of passenger transportation around Europe, which takes a proportion of 80% of its whole revenue amount. Besides, the second business cargo transportation comes out to be the global leader in recent years.

3.0.1Political Factor:

A decade has passed when the plan of “European Airline Integration” was brought forward, however, the consensus hasn’t been reached by each European governments even based upon the “Iceland Volcanic Event”. As the important technology component sector of “European Airline Integration” plan, SESAR enumerates some of its ideal outcome-“the air traffic capacity will be improved by 70% and corresponding increase the safety in air transport; the average delay of flights will be limited to one minute or less; the costs of air traffic management systems will be reduced by 50% and negative impact of each flight on the environment will be decreased by 10% in the year of 2020.”

In addition, the incident of “9.11 terroristic attack” and other kinds of potential terroristic attacks existed are come out to be a severe factor that influenced the whole aviation industry.

3.0.2 Economic Factor:

As we can see the entire airline industry has been affected a lot by the global economic and financial crisis coupled with continued increase of oil prices globally. Recently, the global aviation market appears to be weak as a number of passenger and cargo carriers have either faced insolvency or have already been absorbed into other airlines. For example, “2009 saw the collapse of SkyEurope, Flyglobespan and the merger of Alitalia with Air One”. (Annual Report, 2010) In the European aviation market, Lufthansa has implemented the taken over of the Austrian Airlines, Brussels Airlines and bmi. British Airway has announced the intention to make the merger with Iberia....