Business Environment Analysis: UK Airline Sector Challenges Report

This report analyzes the UK airline sector, examining critical issues impacting its operations and sustainability. It begins with an introduction highlighting the dynamic nature of the aviation industry in the UK, followed by an overview of key challenges such as supply chain disruptions, economic and political instability (including Brexit and US-China trade disputes), increasing competition, talent management issues, regulatory compliance, and the slow pace of innovation. The report applies the PESTEL model, focusing on political and economic factors, and their influence on the industry. Furthermore, it assesses sustainability challenges, including environmental concerns (emissions, noise), safety issues, and employee retention. The report concludes with a reflection on the research process and suggestions for improvement, summarizing the key findings and their implications for the future of the UK airline sector. The report also references various academic sources to support its analysis.

Report
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Table of Contents
Introduction......................................................................................................................................3
Key issues affecting airline sector:.........................................................................................3
PESTEL model and two issues:.............................................................................................4
Key issues affecting business sustainability. Positive and negative impact on sustainability5
Reflection...............................................................................................................................5
Conclusion.......................................................................................................................................5
REFERENCES................................................................................................................................6
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Introduction
Aviation industry is changing very fast and is adopting as per the specific requirements of
external environment. UK has third largest aviation network across different parts of the world. It
provides large number of benefits to economy and growth of a particular country in recent years.
The present report is based on making analysis of the key issues that are affecting the present
airline sector and the way they are having an impact on the present functioning of various
airlines (Karaman, Kilic and Uyar, .2018). Further the impact on sustainability of airlines
industry is evaluated to achieve significant growth in coming future time period. There is
reflection to evaluate the issue sharing in the course of report and conclusion drawn based on
overall discussion of various issues discussed al through the report.
Key issues affecting airline sector:
Supply chain is one of the key issues affecting the present scenario of aviation industry.
There are supply chain stifles that is required to be keep up because of increasing demand and
the ramp up production activities on the aviation industry. There is presence of volatility in the
economic and geopolitical environment that is increasing and leading towards labour shortage in
the background of aviation industry (Baum and Auerbach, 2017). The aviation industry is
vulnerable to external factors that include economic conjunctures and political tension. In the
commercial aviation sector there is sustained economic growth and political stability that is
leading to underlying factors affecting the long term growth of air traffic. Though the global
economy has rise from the financial crises in the year 2007 and 2008 but still the economic
outlook is reasonable and remains very uncertain.
Political issues: The factors like US china trade is causing high amount of instability across
markets in world. The economies have started to show signs of potential silo down in economies
like china that is part of worlds largest economies have recently reduced their GDP growth
targets.
In Europe the financial markets have experience a series of disruption that is a major concern for
Euro zone countries ability and leading to higher budget deficit that is required to pay off the
sovereign debt obligations.
The aviation industry is facing series of challenges in coming future. Such as, uncertainty of
brexit has affected aviation industry. The no deal brexit has changed the overall political
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landscape that is ending up in biggest threats for the aviation industry in coming future time
period.
Economic issues: The situations of economic slowdown in may key markets is also resulting in
tightening of credit markets, extreme volatility and lower liquidity. There is uncertain volatility
prevailing in commodity, currency and equity markets. It is leading to slowdown in airlines
because of their intake strategies and cancelling of present aircraft orders. Further it has lead to
domino impact across the industry leading to multiple issues for this industry.
Higher competition in international and domestic markets: Globalisation and major aspects
have created a world that is incited with denotes because of its associated pros and cons. It
includes various aspects such as free markets, growing human capital and increasing of cross
border interactions (Jano, Satardien and Mahembe, 2019). In recent studies the major exploration
concern of globalisation is on culture. It is regarded as be of most common criticism in some
instances. Aviation industry brands line Airbus and Boeing are the players in wide body market
and are dominating the barrow border segment. In medium term there are opportunities for new
players in the aviation industry.
Managing and retaining of talent: With the influence of processes and technologies there is
focus on cost reduction so organisations in aviation industry require a engaged, talented and
specialised workforce in coming future time period. This issue is leading to work force shortages
in the aviation industry that is a challenge in coming future period.
Compliance with high amount of rules and regulations: In the airline industry there is a need to
comply with increasing regulations that includes aircraft design, pilot training and safety
regulations. These regulations are very critical for passenger safety and critical for operators.
Aviation industry is leading to a series of intellectual property portfolio that includes patents,
unpatented know how, trademarks, software’s, data and so on (Abbottand Bamforth, 2019). They
are part of various confidentiality agreements with suppliers and employees but such measures
are not enough to the misuse of intellectual property rights as it might pose a threat for aviation
industry in the coming time period.
No timely innovations: One of the major aspect of sustainability issues arising in the aviation
industry is because of no proper innovations that is leading to increasing demand from
passengers, it is pushing the aviation industry to adopt some new work processes is technologies
because of the conservative nature of this industry.
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Further outdated technologies are affecting the aviation industry and other business
processes that are a decade old. There is a need to upgrade such technologies regularly in order
to adopt suitable sustainable measures with respect to changing needs of external environment.
PESTEL model and two issues:
Pestle model is used for the purpose of analysing the changing external environment and its
overall impact on the present functioning of aviation industry (Dubinskii and Safonov, 2017).
The external environment is highly dynamic and is affecting the aviation industry both in terms
of developing threats and opportunities in the coming time period. For this purpose presently
there is analysis of two major factors of pastel model that is economic and political factors that
are affecting the aviation industry in below discussed ways:
Political issues: As per the various statistics 70 published by the statistics research department in
the year 2021. There is an approximately of 58% of British who are having issue from United
Kingdom leaving the European Union. This is a big track that has affected various industries in
different manner. In case of aviation industry there will be a complete change in the scenario of
functioning and legal rules and regulations when United Kingdom will be leaving European
Union. Another political issue is related with the US-china disputes that are leading to higher
amount of instability (Mehta and Sharma, 2020). The political issues are creating uncertainty in
terms of greater risk for delivery.
Economic issues: The global economy has been able to recover from the financial crisis that
took place in the year 2008. In Europe the financial markets are lacking the experiences which
are leading to high series of descriptions (Ibrion, Paltrinieri. and Nejad, 2019). There is high
amount of budget deficits and also presence of sovereign debt obligations which is leading to
higher uncertainty in the external environment. Aviation industry has been affected because of
tightening credit markets and high volatility in commodity currencies equity markets and credit
policies. All these are going to present multiple issues for the aviation industry in coming time
period.
Key issues affecting business sustainability along with positive and negative impact on
sustainability
Sustainability is define as conducting business activities and operations without negatively
impacting on community, environment and society. In addition to this, it is analysed that
sustainability within the business consider two categories that is the impact of business on
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society and the effect on environment as well. It is important for an industry to be sustainable as
it ensure that all services, processes properly address current environmental and societal issues
while maintaining profitability. It is determine that Aviation industry is facing many issues due
to sustainability which are as follows:
Environmental issues: Aviation industry is mainly rely on finite planet resources. The
load of natural resources is declining day-to-day, the airline industry is more emphasized on
enhancing the sustainability of air transport. It is analyzed that engine of aircraft found to emit
noise, heat and gases which are affecting on environment and causing climate change as well as
global dimming. In addition to this, some of the aircraft has been found to emit other gases
within the environment that involves nitrogen dioxide, nitric oxide and carbon monoxide. All
this aspect impact majorly in causing climate change in atmosphere. In many of the places,
Cirrus clouds have been observed because of over emission of water vapour from aircraft. This
entire environment related sustainable issues which are currently faced by airline industry
affecting on the environment in an adverse manner.
Safety issues: It is analyzed that in aviation industry there is a growing public safety
undertaking the transportation in airlines. In the present time, many of the airlines globally faced
fatal accidents that results as death of many passengers. In the past, many of the incidents take
place due to its responsibility of pilot or because of some technical issues within the craft. On the
other side, it has been analyzed that plane crash have rise because of shortages of fuel rage, bad
weather condition and so on. In many of the cases, customers and passengers on the aircraft have
faced terrorist hijacks and sabotages that have result in many bloodbaths as focusing on history
of aviation. This happened the cause of fallacy of security staff which are appointed for aircraft.
Moreover, this security issue is associated with the safety aspect of passengers. Thus, these
sustainable issues are faced by most of aviation industry in the recent time period and impact
negatively as well.
Employee retention: In the present time period, aviation industry is facing major problem
that is managing as well as retaining its staff members. The companies are not able to manage
their expenses and providing salary to its employees due to which they layoff many employees.
This issue develop negative mindset employees towards the brand and impact on the
sustainability in an adverse manner. It is important for aviation industry to focus on retaining
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talent so that it can provide quality and effective service to passengers which help in long term
sustainability at marketplace.
It is important for Aviation industry to deal with all the issues properly and focus on using
of gases that did not effect on environment. Along with this, it also help in maintain performance
and sustainability at marketplace.
Reflection
This report is based on analysing the different challenges that may arise in the course of
preparing a report. In present report there is analysis of the different types of challenges that is
faced by the aviation industry in the present dynamic environment. The issues that are faced in
this situation are identification of authentic and reliable sources for the purpose of collecting
relevant information. It is crucial in every report that the overall use of information is from
authentic and reliable sources only in order to maintain its quality. So because of some privacy
concerns some of the legal and political issues are not Cleary outlined on online mediums that
leads to inadequacy of information in certain situations that is one of the major challenges faced
in this report.
Apart from this there are some of issues related to managing the whole information so that it
can help in reaching towards relevant outcomes was also one of the identified challenges. The
purpose of organising the whole structure of this report is a crucial challenge and issue where the
available information is to dividing it as per specific requirement of the research. I have analysed
that I have to work on my present researching skills level that so could analyse the authenticity
of particular sources to be used in course of collecting information. I have to also improve my
present organising skills so that in future course of activities I am able to properly prepare the
required structure of report as per specific needs.
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Conclusion
From the above mentioned various aspects it can be concluded that aviation industry is
going through a continuous changes in recent times because of factors that are part of external
dynamic environment. There are many environmental, legal and political changes that are
affecting the aviation industry across UK. For this there arises a need to sustainable aviations that
can help in continuing the process of delivering of benefits along with economic well being of
managing the negative impact on external environment.
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REFERENCES
Books & Journal
Karaman, A.S., Kilic, M. and Uyar, A., 2018. Sustainability reporting in the aviation industry:
worldwide evidence. Sustainability Accounting, Management and Policy Journal.
Baum, H. and Auerbach, S., 2017. Strategic management in the aviation industry. Taylor &
Francis.
Jano, R., Satardien, M. and Mahembe, B., 2019. The relationship between perceived
organisational support, organisational commitment and turnover intention among
employees in a selected organisation in the aviation industry. SA Journal of Human
Resource Management, 17(1), pp.1-8.
Dubinskii, S.V. and Safonov, A.A., 2017. Composite-friendly approach to certification of
advanced materials and fabrication methods used in aviation industry. Journal of
Machinery Manufacture and Reliability, 46(5), pp.501-506.
Ibrion, M., Paltrinieri, N. and Nejad, A.R., 2019, October. On risk of digital twin implementation
in marine industry: Learning from aviation industry. In Journal of Physics: Conference
Series (Vol. 1357, No. 1, p. 012009). IOP Publishing.
Mehta, P. and Sharma, J., 2020. Exploring the linkage between emotional work and employee
wellbeing: a study of civil aviation industry in North India. International Journal of Work
Organisation and Emotion, 11(1), pp.21-40.
Abbott, M. and Bamforth, J., 2019. The Early Development of the Aviation Industry:
Entrepreneurs of the Sky. Routledge.
online
UK AVIATION INDUSTRY SOCIO-ECONOMIC REPORT, 2020 [online], Available
throughhttps://airlinesuk.org/wp-content/uploads/2016/02/SA-Socio-Economic-Report-Final.pdf
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