The airline industry has been the most sought after in the transport sector. Various stakeholders both internal and external play significant roles to ensure the vision and objectives of the industry are achieved. Internal airline stakeholders include the functional management and the employees while external include the government, competitors and the media. In light with this, the study will explain how the government and the airline community as the key external critical stakeholders affect the profitability of the industry, why they affect the profitability and measures taken by the internal airline stakeholders in improving the profitability of the sector.
External Environment Stakeholders
Government establishes regulations and laws which are implemented to ensure the safety and reliability of air transport (Lin et al. 155). Favorable government airline regulations help to provide smooth flow in the air industry. By securing a stable government and political climate, investors are attracted into the airline industry thereby boosting the transport sector and service delivery. Moreover, airlines also adhere to the established airport’s organization rules to offer a safe and efficient airport system through providing leadership in airport safety, design, construction and operations (Lin et al. 153). State regulation on the use of baggage screening operations to screen for explosives and other dangerous items promotes the safety of the passengers. The government gives priority to the customers who are the key drivers of the airline industry and also help to raise revenue to the government.
Local communities are responsible for shaping the aviation industry as they are responsible for shaping the consumer of air travel service providers. The communities include various suppliers and airport interest groups such as ground transportation providers and air carriers (Lin et al. 155). Similarly, communities are obliged to ensure to balance the airport infrastructure and the service providers to ensure a secure, safe and reliable consumer travel environment. Furthermore, communities should work hand in hand with the internal airline stakeholders to provide access to safe, rapid and affordable air transportation services.
External Stakeholders and Their Influence on Profitability
Unfavorable government regulation negatively affects the airline industry and may lead to huge losses in air transport (Nabati et al. 235). Regulations such as high taxes by the government can scare away potential investors who can help to promote the growth of the industry. Additionally, the state may also impose harsh laws on the airlines for legal and financial compliance. Unstable government conditions may also hinder air transport in areas that have chaos or political uncertainty (Nabati et al. 235). Moreover, the government regulations such as quarantine laws may also reduce airline transport thereby leading to losses due to disruption of the route schedules.
Communities also may help to affect airline transport such as suppliers refusing to provide quality services or goods may make passengers to shun away from seeking air transport (Lin et al. 157). The airport service providers by availing proper services to air carriers such as fuel may help to minimize traffic volumes and help to reduce the fees paid. Additionally, residents in the region and particular residents near the airport also assist in providing a healthy and enabling environment on airline transport through minimized noise pollution and emissions (Nabati et al. 233). Furthermore, through the expansion of the nearby regions, the communities also maximize the number of destinations and also the frequency of accessing those services.
Internal stakeholders and improving profitability
Similarly, the airline management industry enhances the profitability of the sector through ensuring high security and safety of the passengers to increase the reliability of the transport system (Nabati et al. 256). The management should also find opportunities for new destinations and increase service frequency. The availability of sufficient infrastructural capacity also maximizes profitability by ensuring reliable and efficient service delivery. Similarly, the management should maximize customer satisfaction through ensuring quality goods and services such as timely deliveries and airport schedules (Nabati et al. 257). Providing a healthy environment around and inside the airline premises also attracts the public and the investors which may translate to generate revenue for the airline. Developing employees through employee training and workshops also ensure that the quality of service delivery and promotion of carrier development.
Lin, YiHsin, and Chris Ryan. “From mission statement to airline branding.” Journal of Air Transport Management 53 (2016): 150-160.
Nabati, Elaheh Gholamzadeh, Klaus-Dieter Thoben, and Morice Daudi. “Stakeholders in the middle of life of complex products: understanding the role and information needs.” International Journal of Product Lifecycle Management 10.3 (2017): 231-257.