Chapter 4

1. Airline Marketing 4:
The Marketing Environment
Dr Narudh Cheramakara
1/2017
Bangkok University

2. 1. PESTE Analysis
• We will not covered
Legal Aspect
• Airlines are affected by
externalfactors
• What are external
Factors in the aviation
industry?

3. P = Political
• current legislation
home market
• future legislation
• international legislation
• regulatory bodies and
processes
• government policies
• government term and
change
• trading policies
• funding, grants and
initiatives
• home market
lobbying/pressure
groups
• international pressure
groups
• wars and conflicts

4. E = Economic
• home economy situation
• home economy trends
• overseas economies and
trends
• general taxation issues
• taxation specific to
product/services
• seasonality/weather
issues
• market and trade cycles
• specific industry factors
• market routes and
distribution trends
• interest and exchange
rates
• Oil Price
• international
trade/monetary issues

5. S = Social
• social
• lifestyle trends
• demographics
• consumer attitudes and
opinions
• media views
• law changes affecting
social factors
• brand, company,
technology image
• consumer buying
patterns
• fashion and role models
• major events and
influences
• buying access and trends
• ethnic/religious factors
• advertising and publicity
• ethical issues

6. T = Technological
• competing technology
development
• research funding
• associated/dependent
technologies
• replacement
technology/solutions
• maturity of technology
• manufacturing maturity
and capacity
• information and
communications
• consumer buying
mechanisms/technology
• technology legislation
• innovation potential
• technology access,
licencing, patents
• intellectual property
issues
• global communications

7. E = Environmental
• Weather
• Climate change
• Laws regulating environment
pollution
• Air and water pollution
• Recycling
• Waste management
• Attitudes toward “green” or
ecological products
• Endangered species
• Attitudes toward and support
for renewable energy

8. 2. Airline Business PESTE: Political
• Terrorism

9. 2. Airline Business PESTE: Political
• Terrorism
- Airlines/Airport are the prime target as it produce
publicity (BRU/IST/GLA)
- Strict security requirements V passenger convenience

10. 2. Airline Business PESTE: Political
• Political Stability
- Negative impact on tourist demand
- Thailand suffered series of political unrests in the past
- Heavily affecting particularly Chinese tourists whose
government sometimes issued a ban on tour groups

11. 2. Airline Business PESTE: Political
• International Conflict
- Qatar Case
- El Al
- Avoiding Warzones
(Fuel cost, detour)

12. 2. Airline Business PESTE: Political
• Deregulation / Openskies Policy
- ASEAN Openskies Policy
- Thailand Domestic Openskies Policy – 2001
- What are the impacts on Airlines?

13. 2. Airline Business PESTE: Political
• ICAO ‘Red flag issue’
- Thai airlines cannot expand into international markets
(aiming mostly to Japan/Korea)
- Only a few ASEAN and China welcomes Thai Airlines at
the moment as we still have safety issues

14. 2. Airline Business PESTE: Political
• Privatisation
• State Aid
- Illegal under EU Law
- Public Service Obligations
• Airport Slot Allocation
- E.g.HKT is full
- Omanair paid 75m$ for LHR
Slot
- Most of Emerging Nations
Are suffering from this issue

15. 2. Airline Business PESTE: Economic
• Economic Growth and
Trade Cycle
- Emerging Markets: Lots of
Savings, middle class
income
- BRIC Nations: Particularly
China
- The rise of Indonesia as the
soon-to-be the 4th Largest
player in the aviation
industry

16. 2. Airline Business PESTE: Economic
• Exchange Rate = EU-Brexit Case,
• Fuel Cost = Delta Case
- Airline Costs are heavily dependent on these
two factors

17. 2. Airline Business PESTE: Technological
• Internet Revolution: Everything has changed
- E-commerce: Distribution, Advertising, Sale,
Payment
- Internet as a substitute to air travel
• Alternative transport: High Speed Rail, Better roads
connection

18. 2. Airline Business PESTE: Environmental
• Climate Change:
Affecting travel
destinations
• Environmental impacts
from aviation:
Noise/Carbon
Emissions
• EU-ETS Carbon
Emission Trading
Scheme
• UK ADP Tax (Air
Passenger Duty)

19. 3. SWOT Analysis

20. SWOT Sample