Macro-environmental Analysis (PEST factors affecting Gulf Air Airlines).
To analyze the macro environment, I will use the PEST analysis, which refers to political, economic, social and technical factors that confront Gulf Air airlines. Also we use SWOT analysis as well. This analysis provides a no exhaustive list of potential influences of the environment on the organization. Each of the forces is categorized by a particular macro-level external influence, which directly impacts strategic direction at Gulf Air. Company Overview Gulf Air Company is the national airline of Bahrain, Oman, and the United Arab Emirates (UAE).
It operates a fleet of 30 aircraft to 43 cities in 32 countries from Europe to Asia. The company has developed a reputation for outstanding cabin service and takes pride in its history as a pioneer in the Gulf airline industry and as an example of cooperation between governments. Gulf Air traces its origins to Gulf Aviation Company, which was established in Bahrain by a young British aviator, Freddy Bosworth. Bosworth had captured the local community’s interest in flying via sightseeing trips and soon set up a commuter service between Bahrain, Doha, and Dhahran with his single airplane.
Bosworth secured backing from a group of local businessmen and registered Gulf Aviation Company on March 24, 1950. Operations started on July 5. British Overseas Airways Corp. (BOAC) acquired a 55. 5 percent interest the next year. Most of the airline’s business was charter work for oil companies. The company started out operating rather small aircraft. Its first plane, the Avro Anson Mark 1, seated seven people. It was replaced in 1951 by the de Havilland Dove, which had room for one more person. The Dove flew for Gulf Air until the 1960s.
The Business plan on Easy Jey and Ryan Air Financial Analysis
Comparing Gearing of Easy Jet & Ryan Air26 Horizontal Analysis27 Easy Jet28 Ryan Air29 Comparing Easy Jet and Ryan Air using Horizontal Analysis30 Balance Sheet30 Income Statement32 Vertical Analysis of the Balance Sheet34 Easy Jet34 Ryan Air35 Comparing Easy Jet and Ryan Air Using Vertical Analysis of the Balance Sheet36 Conclusions & Recommendations38 References41 Appendix41 ...
Gulf Air was also using four-engine de Havilland Herons, which could carry more people and cargo and fly them farther. The scheduled network grew. Abu Dhabi, Al-Ain, Kuwait, Muscat, and Sharjah were connected in the 1950s. In the 1960s, Bandar Abbas, Bombay, Dubai, Karachi, Salalah, and Shiraz were added, while Fokker F27 turboprops replaced older model aircraft in 1968. This was an especially significant year because it marked the beginning of in-flight service for Gulf Air, an area that would become one of the pillars of the company’s reputation. Environment Analysis Government Regulation
The airline industry in United Arab Emirates has always been fraught with regulation from both domestic governments and the United Arab Emiratesan Union. Before the 1980’s there existed heavy restrictions on competition in this industry imposed by individual countries trying to protect their national airlines. A liberalised bilateral agreement in the 1980’s between Ireland and the UAE was a huge stepping stone for the deregulation of the industry. Also during the 1980’s the E. U. set about deregulating the industry and an array of liberalisation measures followed that were to be applied throughout its territories.
The result of the E. U. implementations has been that since 1997 any E. U. airline can operate anywhere within the E. U. without restriction. More recently the E. U. is trying to forge a bilateral agreement with the US to replace the individual agreements tat have been already made between some individual states and the US. Also, an area that has received much publicity lately is the Subject of State Aid. The E. U. has the power to control any aid given to a business if it encourages discrimination or is contrary to competition unless the aid has been sanctioned by the E. U.
In such cases where aid has been given the E. U. can order repayment of the amount given. The latest decision by the United Arab Emiratesan Commission regarding the case at Charleroi meant that Gulf Air must payback some of the aid granted by both the Walloon Region and BSCA. This part of the aid was regarded as State Aid1 which is no longer allowed under E. U. competition law. It concluded however that some of the aid given was legitimate and did not have to be repaid as it was compatible with the private market investor principle. This decision has farther reaching implications than the repayment of aid however.
The Term Paper on Industry Analysis: Airline Companies
The airlines industry contains diverse types of players that compete in distinctive niches each with different business models. Airline companies owned by the State characterized the airlines industry into the 1980s. Because of privatization, this model no longer exists in Europe or in the U.S., but it is still present in Asia and Africa. Standard airline companies offer scheduled flights with ...
The Commission hopes that the decision will ensure “full competition between carriers out of regional airports” and “that the advantages granted at a particular airport are not discriminatory and benefit from a greater transparency. Competition and Antitrust Law also plays a significant role in determining the boundaries of the industry. “It is a general principle of UAE competition law that no agreement may be concluded between two or more separate economic undertakings that prevents, restricts or distorts competition in the common market or any part of the common market.
Such an arrangement may nevertheless be exempted by the United Arab Emiratesan Commission, on either an individual or category basis. The second general principle of UAE competition law is that any business or businesses having a dominant position in the common market or any substantial part of the common market may not abuse such a dominant position. Gulf Air is subject to the application of the general rules of UAE competition law as well as specific rules on competition in the airline sector.
Since Gulf Air is an UAE Carrier by nationality it is also subject to the rules and regulations of the UAE government. The three primary regulators for the airline industry in Ireland are the Department of Transport, the UAE Aviation Authority and the Joint Aviation Authority. Competition Since the introduction of all the previously mentioned liberalisation measures and competition policies, competition in the airline industry exploded, especially in the last ten years. Also, with more of these measures on the horizon it is likely that competition will continue to grow s new entrants seek to take advantage. However, even though there have been an abundance of new entrants many have not lasted. This is mainly due to the reactions of the existing players who ousted many of them with sustained price competition and other such measures. Also the slot system in operation in many major airports meant that new players couldn’t get a strong foothold from the beginning. External Forces The airline industry has always been susceptible to changes around it and the last few years have thrown many obstacles in its path.
The Essay on Korean Air and China Airlines
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From the outbreak of Foot and Mouth in the UAE to the SARS epidemic in Asia, from the terrorist attacks of 9/11 to the War in Iraq, all of which caused a global economic downturn, the industry has had a torrid few years and most of the major airlines have been running at a loss. Income elasticity of demand for air transport is high meaning a small decrease in GDP will cause a disproportionately larger decline in flying. Also with stricter ruling on state aid the major airlines have well and truly suffered leaving huge gaps of opportunity for the smaller low-cost airlines. Industry Analysis
The Core Business The Company operates a low-fares scheduled passenger airline serving short-haul, point-to-point routes primarily between Ireland and the Gulf Air In operation since 1985, the Company began to introduce a low cost operating model under a new management team in the early 1990s. Gulf Air operates 74 aircraft including 41 Boeing 737-800 “next generation aircraft, 21 Boeing 737-200, 6 Boeing 737-300 (Buzz Fleet), 6 BAE 146 (Buzz fleet), the Company offers approximately 475 scheduled short-haul flights per day serving 84 locations in the Gulf Air, Ireland and continental United Arab Emirates.
Offering widely-available low fares, Gulf Air will have carried more than 23 million passengers during the calendar year 2004. Milestones achieved so far this year include overtaking Easyjet to become United Arab Emirates’s largest airline in terms of passengers, overtaking British Airway’s UAE/United Arab Emirates traffic to become “Britain’s favourite airline”, selecting two new bases at Rome and Barcelona, cumulative after tax profit margin which continues to be over 20% and a closing cash balance of €1. 12 billion.
The Business plan on Strategic Marketing Management Of Turkish Airlines
... in 1996, allowing new scheduled competition from charter airlines. At the same time, ... needs and wants, would attract more passengers looking for enjoyable and influential ... aviation crisis following the Persian Gulf War and would not break ... worldwide unit costs equating with low cost carriers sales and distribution ... preference and convenience in the air travel industry. 5. Competitive Rivalry. ...
By generating an average scheduled flown passenger load factor of approximately 78% and average scheduled passenger yield of UAER0. 052 per available seat kilometer (“ASK”) and focusing on maintaining low operating costs (UAER0. 038 per ASK), Gulf Air achieved a net margin of 28% on operating revenues of UAER843 million for the fiscal year ended March 31, 2003. The market’s acceptance of Gulf Air’s low-fares service is reflected in the “Gulf Air Effect” – Gulf Air’s history of stimulating significant growth in annual passenger traffic on the new routes it has entered since 1991.
On the basis of the CAA Statistics and statistics released by the International Civil Aviation Organization (the “ICAO”), the number of scheduled airline passengers travelling between Dublin and London increased from approximately 1. 7 million passengers in 1991 to more than 4. 4 million passengers in 2002. Each international route Gulf Air has entered since 1991 has recorded significant traffic growth in the period following Gulf Air’s commencement of service, with Gulf Air capturing the largest portion of such growth on each such route.
Although a variety of factors contributed to this increase in air passenger traffic, including the relative strength of the UAE, management believes that the most significant factor across all its United Arab Emiratesan routes in such growth has been Gulf Air’s low-fares service. SWOT Analysis Strength • Brand name: Gulf Air through its 14 years in the LCC market has developed a very well recognised brand name. • Benefits from low airport charges: These aid the low cost base Gulf Air benefits from. • Has first mover advantage on regional airports.
