Company’s Description
Boeing is a significant airline company that acts within the international scope. Its mission statement is “People working together as a global enterprise for aerospace industry leadership” (Mission Statement, 2021, para. 1). Such a formulation exposes an important aspect of the business. It demonstrates that Boeing is more than just a manufacturer of mechanical goods. The firm values the development of long-term relationships between people and stakeholders. Then, the company’s vision statement is that Boeing is “designed to inspire and focus all employees on a shared future and to reaffirm that, together, we can meet the challenges that lie ahead” (Mission Statement, 2021, para. 7). The role of Boeing as an employer in influencing its personnel is the core topic of this claim. The corporation recognizes its leadership and inspiring capabilities’ significance in order to guide people to a successful future.
For years, Boeing has been the leading producer of commercial jetliners. “The Boeing 737, 747, 767, 777, and 787 families of airplanes, as well as the Boeing Business Jet range” (Boeing, n.d., para. 6), are all manufactured by the corporation today. The Boeing 787-10 Dreamliner, 737 MAX, and 777X are all product innovation activities. More than 10,000 commercial aircraft airliners are in operation across the world, accounting for about half of the global fleet. Boeing also has the most comprehensive freight fleet, with Boeing planes transporting almost 90% of the planet’s cargo. As of April 2022, Boeing’s market capitalization reaches $112.6 billion (CNN Business, 2022). At this point, it seems reasonable to turn to the analysis of the company’s environment.
PESTEL Analysis
In In the framework of legal factors, attention should be paid to recent changes in legislation in the field of air transport regulation. Among these are the updates of the Air Code and IKAO and IATA documents regulating the activities of international passenger transport. The main shifts relate, on the one hand, to market liberalization, expressed in the simplification of the system for obtaining permits for regular and charter air transportation and management (Boeing, 2021). On the other hand, regulatory and legal trends are aimed at combating the current problems of airlines. These are an increase in the shortage of qualified flight personnel, attempts to maintain the current level of pilots in airlines and security enhancements. All of this affects the airline’s activities in the literal sense through the implementation of measures required by law.
Within the scope of economic factors, attention should be paid to aspects characterizing the demand for air transportation and investment opportunities for the development of airlines. The decrease in the purchasing power of the population is a consequence of macroeconomic currency fluctuations and the pandemic, which leads to a decrease in the growth rate of international air travel from passengers. From airlines, there is an increase in leasing payments, as well as the cost of aviation kerosene, which leads to an increase in the cost of an air ticket for the end consumer (Boeing, 2021). The strengthening of the above negative phenomena is observed during periods of low demand for air transportation (winter season), where most of the flights are scheduled. The influence of this factor can be compensated by the development of domestic air transportation, as well as special events to stimulate business tourism.
The influence of political factors can be reduced to the following points. There is a high degree of government control of the passenger air travel industry in many countries. State influence is exercised not only through the control of airline admissions but also through incentive programs for the development of air traffic. An actively developing direction at the moment is regional air traffic, both long-haul and medium-short-haul flights (Boeing, 2021). The identification of environmental factors is also associated with the strengthening of state control in the field of air transportation, especially around large transfer hubs of airlines. Airlines are required to replace energy-intensive and non-environmentally friendly parts of aircraft, such as installing winglets on Boeing. It should be noted that this is not about updating the air fleet but about modernizing the company’s existing aircraft.
Sociocultural factors are associated with a change in the structure of demand for air travel and the transformation of airline business models. The increase in demand for air transportation is stimulated by government policy and the setting of transparent tariffs in pricing for a number of destinations, which allows for attracting new categories of passengers with different price sensitivities. Hybrid models, combining different classes of service within one flight, is the way for airlines to expand the list of passenger segments served (Boeing, 2021). A separate factor is the perception of the airline in the eyes of the passenger, formed by the level of flight safety. Its assessment and improvement are among the first points in increasing the efficiency of all air carriers.
The increase in the level of costs within the framework of technological factors is associated with the expansion of the aircraft fleet. In addition, the digitalization of the industry is associated with the process of air transportation, which consists not only of back-line processes but also the front-line, which consists of pre-flight, flight, and post-flight passenger services (Boeing, 2021). Moreover, obtaining a wide profile of information about customers is important for an airline not only when implementing IT solutions but also when reconfiguring business processes. In particular, here we are talking about the creation and adaptation of a personalized pricing system for the company’s flights.
References
Boeing. (2021). The Boeing Company 2021 annual report. Web.
Boeing. (n.d.). Boeing in brief. Web.
CNN Business. (2022). Boeing Co. Web.
Mission Statement. (2021). Boeing mission and vision statement analysis. Web.