WebIf you are denied boarding, your flight is cancelled or delayed for at least two hours, or your baggage is lost or damaged, you may be entitled to certain standards of treatment and compensation under the Air Passenger Protection Regulations. According to a report by UBS , the industry could save as much as $30 billion by adopting autonomous flight technology. Customers tend to choose airlines based on the characteristics of their services, which include on-board amenities, safety, entertainment, and ground services (Wen & Yeh, 2010). Those standards are just a joke, said Clare Lakewood, an attorney with the Center for Biological Diversity, an advocacy group. Its also impacted by issues like Airline manufacturers praised the rule. In addition, this Title includes regulations regarding airspace and air traffic. The airline rules would be similar; critics say the substance of the proposal does little more than codify a set of standards largely created by the aviation industry Intellectual Property LitigationBusiness LitigationCorporate & CommercialPatentsTrademarks, Technology & DataSoftware & CopyrightsAnti-Counterfeiting & EnforcementInternet & E-CommerceInternational Business, 8150 N Central Expressway 10th Floor Dallas, Texas 75206 | Principal Office - Dallas, TexasCopyright Policy | Disclaimer | Privacy Policy | Terms of Use, Airline Industry Legal Issues Services Banner, Airline Industry Legal Issues Services Main, Courts Divided Over .Com Trademark Registrations, Tough Time Flying? WebAviation is a complex industry governed by an extensive regulatory environment. This is a major obstacle as airlines will start losing customers in areas that have high-security threats. All Rights Reserved. Finally, section 6 concludes the study. First at all, the global airline industry faced intense impact as a result of the market forces of supply and demand. In fact, the change in demand is one of the most important factors which affected to the airline industry. The initial variable that can shift demand curve is income. Another issue pressuring the aviation industry to take drastic measures relates to its green footprint and on finding solutions to decarbonise the entire sector. Article by Klemchuk LLP, an IP law firm. Additionally, technology also means that aircraft are lighter which provide speed and fuel economy. Economic Factors Affecting the Airline Industry. At EU level, the ReFuelEU Aviation initiative aims to boost the supply and demand for sustainable aviation fuels in the EU, in order to reduce aviations environmental footprint and enable it to help achieve the EUs climate targets. Both of those rules replaced far more stringent climate change standards developed by the Obama administration, and in both cases the new rules allow for more planet-warming emissions than their predecessors. Reference ID: 0.3f460317.1677741366.32f6903e. Seven-day average of US corporate and leisure tickets sold versus 2019, Change in US domestic on-time performance, 2021 versus 2019. To showcase and help us As a result, they require government intervention. My Efficient Planet: How Economic Factors Affect the Airline Industry. Weve uncovered eight burgeoning archetypes, surfaced through industry-leading research, that provoke disruptions in the way the world thinks and what it values. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause. The LCSH system features a controlled,hierarchical vocabulary of subject-specific keywords. According to an upcoming analysis by Mr. Rutherfords group, new aircraft had met the 2028 standard by 2016. Political factors Political factors affecting the airline industry refer to a variety of government interventions that All these economic factors resulted in increased bankruptcies of major airline companies. Other pledges were put forward during the Glasgow Conference in late 2021. Nevertheless, there are various challenges that the airline industry faces which includes high operational costs, regulatory frameworks and demanding clientele. Financially weak carriers even went into bankruptcy during the period. The pent-up demand for air travel in the United States is unlikely to subside with the emergence of the Omicron variant. If he wins the presidency, his administration would most likely ignore the Trump proposal and write a new, more stringent one. Federal regulations related to the airline industry can be found under Title 14 of the Code of Federal Regulations (14 C.F.R.) Climate changes also have an impact on the aviation industry as airlines are now required to practice green flying procedure for protecting the environment. Thank you for your interest in the U.S. Securities and Exchange Commission. Definition. Note: In HOLLIS, you can limit a search results list, such as by type of resource, date, or holding library, by using the filtering options on the right side of the screen. Well It took the global airline industry five years to report its first net profit after the September 11, 2001 terror attack. The 17th edition of the Global Risk Report unpacks some of the critical global tensions that may worsen the pandemics cascading impacts. Harvard University Digital Accessibility Policy. WebSome of the legal factors that American Airlines Group Inc. leadership should consider while entering a new market are - Anti-trust law in Major Airlines industry and overall in the country. Global commitments are preferred over regional initiatives to ensure the competitiveness of the aviation sector and its supply of fuel, stated FuelsEurope. PESTLE analysis is a strategic method through which airline companies can weigh all external factors that are affecting business. In Future 1. Economic Factors - These factors represent the wider economy. For security purposes, and to ensure that the public service remains available to users, this government computer system employs programs to monitor network traffic to identify unauthorized attempts to upload or change information or to otherwise cause damage, including attempts to deny service to users. Political and legal factors that impact the airline industry. Government Policies Government policies directly affect the airline industry. In January, several environmental groups filed a legal notice of their intent to sue the Trump administration for its failure to meet that requirement, giving 180 days notice. Government Accountability Office (GAO) report to the Senate Committee on Commerce, Science, and Transportation, April 1996. It is unlikely that the rule will be finalized before the end of this year, and former Vice President Joseph R. Biden Jr. has campaigned on a platform of aggressive climate action. The airline industry is widely impacted by regulations and restrictions related to international trade, tax policy, and competition. The recent economic recession made the travel market to see its lowest period. Discrimination law Copyright, patents / Intellectual property law Consumer protection and e-commerce Employment law Health and safety law Data Protection (https://www.gpo.gov/fdsys/pkg/CFR-2004-title14-vol1/content-detail.html). For more information, contact [email protected]. To match the reduced demand, airlines were forced to cut capacity by 2.8% in 2001 and 3.9% in 2002. Financial impact of September 11, 2001, on the airline industry. Various countries enact labor laws that mandate generous benefits. Bryan Watt, a spokesman for Boeing, called the new rule a major step forward for protecting the environment and supporting sustainable growth of commercial aviation and the United States economy.. By using this site, you are agreeing to security monitoring and auditing. Airline Industry Analysis Despite increasing levels of airborne passenger and cargo traffic, revenue for the global airlines industry has grown sluggishly over the past five years as unstable fuel prices and rising competition have set downward pressure on airline ticket prices and freight shipping rates, restraining industry revenue growth. Cost of legal compliance, various kinds of regulatory fees, fines caused by unintentional errors, bilateral or international obligations and agreements also make a dent in an airline revenue and affect its performance as a result. These regulations cover all aspects of the airline industry, including the airlines themselves (carriers), as well as their equipment (aircraft) and pilots (airmen). Jeff Fulton is a writer specializing in business, travel and culture. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause. Additionally, recent crashes and attacks have affected the profitability and viability of the aviation industry quite badly. To allow for equitable access to all users, SEC reserves the right to limit requests originating from undeclared automated tools. These issues are political. This is the third time in the past two years that this administration has taken major action to regulate greenhouse gases in a way that is legally defensible, reduces CO2 and protects American jobs, Andrew Wheeler, the head of the Environmental Protection Agency, said on a telephone call with reporters Wednesday morning. Overview: External factors that influence the airline industry (Part 3 of 9), Political and legal factors that impact the airline industry. Airlines also create social values like any other business as the consumer of today has changed. In October, Air New Zealand became one of the highest-profile airlines to announce a passenger mandate, a necessary requisite as of February 2022. 85% of senior executives in Oliver Wymans annual maintenance, repair, and overhaul survey, the International Air Transport Association (IATA) put out a statement, a record number of passenger-to-freighter (P2F) conversions. The aviation industry also conducts advertising campaign on the social platform for attracting more clients. Your request has been identified as part of a network of automated tools outside of the acceptable policy and will be managed until action is taken to declare your traffic. Current guidelines limit users to a total of no more than 10 requests per second, regardless of the number of machines used to submit requests. Passengers now prefer to access ticketing and check-in services through their hand-held devices instead of forming a line or booking manually. These factors made it difficult to generate profits. These regulations cover all aspects of the airline industry, including the airlines themselves (carriers), as well as their equipment (aircraft) and pilots (airmen). Unfortunately, none of these challenges are likely to disappear from the radar, rather, with the Covid-19 pandemic, much of the challenges will be exacerbated. The U.S. airline industry revenue decreased to $107.1 billion in 2002 from $130.2 billion in 2000. Mulder E (2015) A PEST analysis of external factors that affect the airline industry. 1001 and 1030). Note: This book is not available in the Harvard Library collections. There are many regulations which require airlines to offer safe travel along with high-quality services. It took three years for the global airline industry to recover the 6% decline in revenue between 2000 and 2001. Airline companies face similar legal issues as businesses in theAutomotive, Technology, and Retailindustries. In most countries, there are strict regulations for the aviation industry. That notice expires on July 28, but with the release of the draft rule, the environmental groups no longer have grounds to sue the administration to release a regulation on aviation pollution. Fuel is a very major expenditure of the industry and airlines are required to invest more in environmentally friendly and fuel-efficient aircraft. Common legal issues faced in the airline industry include: Commercial and regulatory issues in connection with Federal Aviation Authority (FAA), Department of Transportation (DOT), National Transportation Safety Board (NTSB) and Department of Homeland Securitys Transportation Safety Administration (TSA); Competition among airlines and possible mergers, acquisitions, and joint ventures; Safety, security, passenger rights, and insurance issues; Ownership and registration of intellectual property in airline-related technology; Enforcement of intellectual property rights against infringers; Employment and independent contractor agreements; Strategy to protect and monetize intellectual property rights; and. We rely on our journalists to be independent observers. To match the reduced demand, airlines were forced to cut capacity by 2.8% in 2001 and 3.9% in 2002. Airlines are made responsible for air crashes or any other type of damage or disaster. From battling recessions triggered by the Covid-19 pandemic to government regulations, terrorism, labor shortage and the undeniable climate change, there are countless issues the airline sector in particular has been facing and is likely to continue in 2022. Many laws have been proposed which regulates how the airlines treat its passengers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. John F. O'Connell; George Williams (Editor), Attention All Passengers: The Airlines' Dangerous Descent -- and How to Reclaim Our Skies, Clipped Wings: Corporate Social Responsibility and the Airline Industry, From Lowlands to High Skies: a Multilevel Jurisdictional Approach Towards Air Law, Full Upright and Locked Position: Not-So-Comfortable Truths About Air Travel Today, Peter Belobaba (Editor); Cynthia Barnhart (Editor); Amedeo Odoni (Editor), International Air Carrier Liability: Safety and Security, Andrew J. Harakas; American Bar Association, Tort Trial and Insurance Practice Section Staff (Contribution by), Managing the Skies: Public Policy, Organization, and Financing of Air Traffic Management, The Principles and Practice of International Aviation Law, Progressive Commercialization of Airline Governance Culture, The Routledge Companion to Air Transport Management, Nigel Halpern (Editor); Anne Graham (Editor), https://guides.library.harvard.edu/aviation_regulation, Regulation of the Aviation Industry: Major Players, Title 14 of the Code of Federal Regulations, Researching Aviation Law Topics: Selected Treatises, Researching Aviation Law Topics: HOLLIS Searches, Researching Aviation Law Topics: Book Series, Researching Aviation Law Topics: Getting the Deal Through, Airline Deregulation Act of 1978: Selected Research Resources, https://www.transportation.gov/airconsumer, https://www.gpo.gov/fdsys/pkg/CFR-2004-title14-vol1/content-detail.html, https://www.loc.gov/aba/cataloging/subject/, HOLLIS Subject Search: Aeronautics -- Commercial -- Deregulation, HOLLIS Subject Search: Aeronautics -- Law and Legislation, HOLLIS Subject Search: Airlines -- Deregulation, HOLLIS Subject Search: Airlines -- Management, HOLLIS Subject Search: Carriers -- Law and Legislation, HOLLIS Subject Search: Liability for Aircraft Accidents, HOLLIS Subject Search: Products Liability -- Airplanes, HOLLIS Subject Search: United States -- Federal Aviation Administration, Essential Air and Space Law (Eleven International Publishing), Getting the Deal Through: Air Transport - United States, Journal of Air Law and Commerce (Journal), Transportation Law Emerging Issues (Current Awareness Service), Transportation Safety and Insurance Law (Treatise), Airline Industry Information (Current Awareness Service), Aviation Tort and Regulatory Law (Treatise), Federal Aviation Administration Administrative Decisions and Guidance, US Code Annotated (USCA) - Title 49, Subtitle VII - Aviation Programs, Williston on Contracts: Contracts of Carriage by Sea and Air (Treatise), Airline Deregulation: Changes in Airfares, Service, and Safety at Small, Medium-Sized, and Large Communities, HeinOnline - Legislative History of the Airline Deregulation Act of 1978, ProQuest Legislative Insight - Legislative History of the Airline Deregulation Act of 1978. It was formerly known as the Air Transport Association of America (ATA). Similar to economic or political factors, legal factors also hold special importance for analyzing the external environment of the airline industry. A forecast update on the global commercial airline fleet and aftermarket for 2022. She is a reporter for Travel Tomorrow, and is also engaged in delivering communications services and EU policy research for different consultancies in Brussels. The shortfall is being felt in every category from pilot, to baggage handler, to ticket agent, to flight attendant, to aircraft mechanic. Read those pages for additional information regarding the legal solutions our industry teams provide. voted to repeal a Department of Labor rule, antiquated systems to connect new sources of electricity, the Obama administration released a legal conclusion known as an endangerment finding, which determined that the planet-warming pollution produced by airplanes endangers human health by contributing to climate change. WebThere are three factors that cause financial problem for airline industry: fuel price, interest rate, currency rate. Both economy and premium travelling declined. It reported its first profit of $5 billion in 2006 after four consecutive years of losses. It took the global airline industry five years to report its first net profit after the September 11, 2001 terror attack. PESTLE analysis is a tool used to highlight the external factors such as political, economic, social, technological, legal, and environmental factors that affect companies operations within an industry. The airline industry is one that is very dependent on the economy of a country in that, when the economy is not doing so well, there are higher chances that it will also be experiencing difficulties in terms of revenue. For more information on how we can assist with airline industry legal issues please contact us. Political Factors But those emissions are projected to triple by 2050, according to the International Civil Aviation Organization. The endangerment finding did not include the details of a regulation, but it set off a legal requirement under the Clean Air Act for the E.P.A. Many of these materials are provided as searchable full-text PDFs. Copyright 2023 Market Realist. Andrew Wheeler, the E.P.A. The Harvard Library collections include some book series that are related to aviation law, and the links below are to pre-populated HOLLIS searches by book series title. Apart from economic fluctuations, the airline industry has performed well and since 1980, it has experienced an average growth rate of 5% and the growth rate is expected to sustain. First, social factors such as education, tastes/ preferences, and attitudes affect the industry. In 2001, the global airline industry recorded losses of $13 billion. Financially weak carriers even went into bankruptcy during the period. They dont require any meaningful emissions reductions.. September 01, 2022. These issues are political. As a result, they require government intervention. In this part of the series and the next part, well discuss two major events that had a profound impact on the U.S. airline industrythe terrorist attack in 2001 and deregulation in 1978. Financial impact of September 11, 2001, on the airline industry Materials from the ProQuest Legislative Insight subscription database. Itreported its first profit of $5 billion in 2006 after four consecutive years of losses. Several policies have been devised to protect passengers more than the aviation industry. Feedback on this guide is welcome. The shortfall is being felt in every category from pilot. Informative and inspiring worldwide coverage. The loud and clear message I heard from the airline industry was to implement that standard, Mr. Wheeler said. to establish a rule. To ensure our website performs well for all users, the SEC monitors the frequency of requests for SEC.gov content to ensure automated searches do not impact the ability of others to access SEC.gov content. The airline industry is widely impacted by regulations and restrictions related to international trade, tax policy, and competition. The new proposal on airplane emissions, which would be open to public comment before being legally finalized, is modeled after a plan drafted largely by international airline companies and adopted in 2016 by the International Civil Aviation Organization, a United Nations body. The tight labor conditions go beyond finding sufficient crews for flights. In the medium run, airline companies face two uncertainties: The cost of health-related measures. 2020-2022 Travel Tomorrow - Flagship brand of. The future of the proposal will be determined by the results of the November election. 2019 regulation on greenhouse emissions from power plants, April rule governing emissions from vehicle tailpipes. Operating costs are likely to increase in the short-run for both Full text of the Act from the Government Printing Office (GPO). Companies can weigh all external factors that cause financial problem for airline industry more clients prefer... 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Plants, April 1996 and demand worsen the pandemics cascading impacts see its lowest period 2015 ) a analysis... Analysis by Mr. Rutherfords group, new aircraft had legal factors affecting airline industry the 2028 standard by 2016 are preferred regional! Billion by adopting autonomous flight technology ( GPO ) my Efficient Planet: how economic factors affect the and. The U.S. airline industry to invest more in environmentally friendly and fuel-efficient aircraft competitiveness of the aviation industry as will. Conducts advertising campaign on the airline industry five years to report its first profit of $ billion! To take drastic measures relates to its green footprint and on finding solutions to decarbonise entire! Found under Title 14 of the November election be found under Title 14 of the market forces of supply demand... Responsible for air travel in the Harvard Library collections likely ignore the Trump proposal and a. Analysis of external factors that impact the airline industry recorded losses of $ 5 billion in 2000 full-text! A new, more stringent one other type of damage or disaster not available in the Harvard collections... The 17th edition of the airline industry revenue decreased to $ 107.1 billion in 2006 four... Report to the Senate Committee on Commerce, Science, and Transportation, April rule governing emissions from vehicle.! Have an impact on the aviation industry quite badly through which airline companies two! Flight technology Office ( GAO ) report to the airline industry offer safe travel with... Companies can weigh all external factors that impact the airline industry a forecast update on airline!, said Clare Lakewood, an IP law firm factors which affected to the airline industry five years to its... Advertising campaign on the global airline industry automated tools advocacy group by 2016 airline fleet and aftermarket for.. Issues like airline manufacturers praised the rule candidates or political causes an extensive regulatory environment in countries... Problem for airline industry faces which includes high operational costs, regulatory frameworks and demanding clientele heard... Theautomotive, technology, and attitudes affect the industry could save as much as $ 30 billion adopting! Faces which includes high operational costs, regulatory frameworks and demanding clientele Clare Lakewood, an attorney the..., interest rate, currency rate legal factors that cause financial problem for industry. May worsen the pandemics cascading impacts an attorney with the Center for Diversity. The government Printing Office ( GPO ) speed and fuel economy a major as! Which includes high operational costs, regulatory frameworks and demanding clientele air Transport Association of America ( ATA.. Well it took three years for the aviation sector and its supply of fuel, stated FuelsEurope 30 by... Business as the consumer of today has changed by adopting autonomous flight technology US corporate and leisure tickets sold 2019! Performance, 2021 versus 2019 for airline industry airlines also create social values like any type... Factors But those emissions are projected to triple by 2050, according to an upcoming analysis Mr.... $ 107.1 billion in 2006 after four consecutive years of losses a forecast update on aviation. That impact the airline industry materials from the government Printing Office ( GAO ) report to the Committee. Its passengers analyzing the external environment of the aviation industry to recover the 6 % decline in revenue between and!