Introduction Delta Airlines is a top competitor in airlines transportation. They provide air travel service to hundreds of destinations all over the world.
Over the years Delta has invested time, money and energy to draw more customers and give them a better overall traveling experience. There are macro environment factors that affect every industry. Changes in these factors can affect the competitive advantage and profitability of the airline industry. One way to analysis these factors is by using the PESTEL framework. PESTEL stands for Political, Economic, Social, Technology, Environment and Legal factors that an industry identity’s and reviews. Today I will apply the PESTEL framework to Delta Airlines.Political FactorsDeregulations Delta Airlines became one of the top competitors in the airline industry since the 1978 signing of the Airline Deregulation Act. This act transformed the Airline Industry from just being competitive in service, to now being competitive in other ways, like low cost travel.
Delta doesn’t promote low cost fares but invest in higher quality service for their passengers with rewards system. The Airline Deregulation Act removed the governments control over market entry’s, fares and routes. This act allowed airlines to create business models that would open routes that would include international and domestic networks for Delta Airlines and compete for more than just service. Tax Policy Every country that Delta travels to has their own tax policy. These tax policies support trade, employment and economic growth. This could negatively affect the economy. But some countries offer enticements for airlines and some have higher cost verses revenues.
Economic Factors9/11 and Recession of 2007The economic factors that Delta has dealt with is the terrorist attack of 9/11, and the recession of 2007 that caused a decline in air travel and a decline in revenues for the airplane industry.Inflation and Interest Rates Delta Airlines is continually changing in inflation and interest rates. This is due to the supply and demand of each country that they travel too. It is also due to the income levels of the passenger that fly Delta.Social FactorsValue AddedDelta has looked for ways to add value to customers travel experience, because as society changes, so must the way airlines do business.
The attitude and shared beliefs of society play an important role in how airlines like Delta, service the demographics of each area that they provide air travel service, too.Technological factorsBooking FlightsIn a world of continued changing technology, the airline industry has reaped the benefits of technology. Instead of travel agents booking flights, now you can go to Delta’s website, or websites like Travelocity, and Expedia.
com to book flights.Wi-Fi and Available MoviesAnother way technology has advanced the airline industry is by offering Wi-Fi on the plane. This allows travelers to work, play games, and communicate with family members while away.
Delta offers in flight movies that can be watched for your enjoyment and entertainment.Environmental FactorsMore Fuel EfficientlyFuel prices have fluctuated through the years causing airlines to pay higher for fuel, which in turn cost the customer more for air travel. In 2016, Delta wanted more fuel-efficient planes, so they began to phase out MD 88 airplanes and purchased Airbus A321(Star Tribune). Theses Airbuses are more fuel efficient and will reduce the cost to maintain them, passing the savings on to the customer.Legal FactorsSecurity MeasuresDelta airlines, like other airlines were negatively affected by the terrorist attacks of 9/11. That attack led to security measures put in place to better protect the customer. One of those measures was creating Transportation Security Administration (TSA).
The TSA was established to provide tighter security for the airlines and airline security. Another security measure was the establishment of the Advanced Imaging Technology (AIT), this software showed the image of the person being scanned on something as small as a laptop computer. These measures were put in place to protect flights from potential terrorists. These measures were put in place to ease travels fears but has created some anxiety about the time it takes to get through all the security to travel. As you can see through the PESTEL framework, Delta Airlines have overcome negative impacts such as the deregulation, 9/11, and Recession of 2007. They have continued to evolve with the new technology and social issues in the economy.
They will continue to be one of the leading airlines for years to come. ReferencesDelta Airlines Inc, PESTEL and Environment Analysis (n.d.). In Fern Fort University. Retrieved September 16, 2018, from http://fernfortuniversity.
comPainter, K. (2016, April 29). Delta Airlines Orders More Airbus to Replace Aging Fleet. Star Tribune.Security Screening (n.d.).
In Department of Homeland Security. Retrieved September 16, 2018, from https://www.tsa.gov/travel/security-screeningTaxation (n.d.). In Airlines Magazine.
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