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Organisational Behaviour and theExternal Environment of Airline Industry
The External Environment
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,SWOT analysis stated by Valentin (2001 [online]) focuses on internal strengths and
weaknesses of an organisation along with external opportunities’ and threats facing
the business. SWOT is argued as a performance indicator as well as main
distinguisher to underline company’s smart objectives (See Appendix 1). This report
assesses the external environment factors influencing organisations decision-making
within the airline industry.
Each year consumers’ tendency to travel abroad increases. Bowman (2017 [online])
identifies that EasyJet served up to 430,000 passengers in one month which
amassed over £100 million in revenue, showing the willingness of consumers to
travel using low-cost airlines which are affordable and offer adequate service. In
addition, R.M.Z. (2013 [online]) explains that customers’ benefit from using
“Skyscanner” website, which offers customised choices and best flights deals.
Skyscanner store data of British Airways amongst other airlines, providing key
information regarding baggage allowance, booking fees and airline operation in
general (Skyscanner, 2017 [online]). This impacts on airlines managerial control
areas such as price adjustments, network planning, locations and other travellers’
preferences (Skyscanner, 2016 [online]).
Boyd (2017 [online]) confirms that, airline passengers in 2016 accumulated £5.2
million worth of wastage, with most of rubbish ending up in landfill. This amount of
waste is forecasted to double over the next 15 years and is a threat to the
environment. An approach by America’s United Airlines to minimise wastage was
switching to biodegradable paper cups. According to Springer (2017 [online])
Emirates Airlines caters 180,000 prepared meals to serve on board for 400 daily
flights across the world. Due to fierce competition companies are concerned about
customer satisfaction, leading to stock more food than required during the flights.
LeBeau and Reid (2017 [online]) reported that “The world wants to fly” emphasising
the growth in demand due to an increased middle class in countries such as China
and India (See Appendix 2). Boeing largest global aircraft manufacturer predicts Asia
to request 16,000 new airplanes which is almost 40% of the global demand over the
next 20 years. The opportunity to expand across the globe attracts another
manufacturing giant Airbus, calculating over 4700 aircraft orders to Asia in 2017
(Statista, 2017 [online]). As a result, airlines approach is to grow regionally in support
2|Page
, of civil aviation policies (Chandrakanth, 2015 [online]) as well as invest $1.2-1.5
trillion by 2030 in airports infrastructure (IATA, n.d. [online]).
Implied by Katz (2017 [online]) after Brexit vote, the pound weakening hit on EasyJet
shares considerably falling 7 months post Brexit, along with British Airways parent
company IAG shares decreasing by 20% one day after the referendum (Zhang, 2016
[online]). Gerrard (2017 [online]) identifies that carriers such as IAG and Ryanair
won’t be affected by the changes in border between the European Union and United
Kingdom since both are based outside the UK, whereas EasyJet is a British based
airline, therefore requiring an application to allow service to operate within the EU
controlled territory.
Management and Leadership
Leadership and management skills are vital for managers discussed by Asrar, (2017
[online]) to monitor and regulate employees’ performance, development and direction
towards achieving a particular organisational goal. Leadership involves senior-
managers influencing relationship and enforcement of personnel in their best ability.
Numerous managers around the globe simply don’t have the fundamentals to carry
out the tasks required in order to lead their business (CMI, 2014 [online]).
Different circumstances request peculiar leadership approach, for instance British
Airways managerial control is vital to meet targets in productivity and growth. Alex
Cruz the Chief Executive Officer of BA described the impact of the disruption on
honeymoons and long-planned family holidays as a misfortune and pledged that the
airline would follow all applicable compensation rules. Cruz, was left in turmoil with
the company experiencing IT system failure, which led to delays and cancellations in
excess of 75,000 passengers over the May bank holiday weekend (BBC, 2017
[online]). Cruz denied that the negligence occurred due to outsourcing in foreign
countries (Batchelor, 2017 [online]). CEO Alex Cruz is held responsible for the BA
actions, leading to a profuse public apology for the various computer glitches which
took place at Heathrow and Gatwick airports (Ross, 2017 [online]).
Carolyn McCall the CEO of EasyJet was chosen as one of the most successful
leaders ranking one of the top five chief executives in the Financial Times Stock
Exchange 100 Index (Nuttall, 2017 [online]). According to Callander (2015 [online])
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