Christian Uwagwuna

How the Macroeconomic Environment of the Airline Industry Affects the Strategic Decision of Boing Vs Airbus
A Case Study

Document Nr. V170506 http://www.grin.com/ ISBN 978-3-640-89394-2

9 783640 893942

‘Case Study – How the Macroeconomic Environment of the Airlines Industry Affects the Strategic Decision of Boeing Vs Airbus’ By

Christian Uwagwuna

Course: Strategic Management

27 January 2011

Executive Summary
This paper discusses the external economic factors affecting the strategic decision of airline industry and how this decision in turn, affect the market forecast of the aircraft manufacturing industry. Various business issues affect airlines operation either directly and indirectly, and
Sometimes, additional factors such as environmental and legal and added to form a PESTEL (Political, Economical, Social, Technological, Environmental and Legal), but these can also be incorporated in the others. Also Porter’s five forces model has proved a veritable tool in the analysis of the operating environment of the airline industry. There are two major players Boeing and Airbus in the aircraft manufacturing industry, and they compete stiffly to control the market. The PESTEL framework and Porter’s five forces model can

help the airline manufacture to study the external environment and to take strategic decision that will help them to compete favorably. This paper will discuss in detail using PESTEL framework and Porter’s five forces model, the challenges the airline industry faces and how this challenges affects the aircraft manufacturing industry and their strategic decision. The aim of this essay is to carry out a comprehensive analysis of the operating environment of the airline industry using the PEST framework and identify what factors affects the way airlines do business. Airline Industry Current Business Issues and Trends in Airline Industry The global airline industry has grown significantly consisting of over 2,000 carriers worldwide, operating over 23,000 aircraft, and servicing over 3,700 airports. On the average annually, world airlines flew approximately about twenty eight million (28 million) scheduled flights carrying