Marketing

2.1 External Analysis / Macro environment

The macro environment analyse the factors that affect the industry in which the company operates within.

a) Political and Legal factors

|Factor |Effect on Airline Industry |Implication |
|Trade union increasing pressure on Airlines |Pilots demand higher wages what would |Loss of capital |
| |probably increase fares or decrease profit. | |
|European Union Expansion |Bigger market. |More competition |
|Abolishment of Duty-free sales within Europe |Loss of a current market – Low cost Airlines |Influence on staff payment |
| |sell Duty-free products inside the aircraft. | |
|Government regulations are increasing |Taxes on fuel emissions increasing. |Effect on the whole industry |

The rise in taxes can affect the company`s cash flow and increase fares and the European union expansion could create new opportunities for more business.

b) Economical factors

|Factor |Effect on Airline Industry |Implication |
|Instability in the world`s economy |Europe and US facing an economic slowdown due|Instability on costs and fares. |
| |the US crisis on mortgages. | |
|Fuel prices increasing |Higher costs. |Effect on the whole industry. |
|EU Commission Rulings