Concluding, it can be said that the global airline industry has become very competitive and is a very expensive business as well. To showcase and help us This years survey focused on three issues facing the aviation aftermarket: continuing challenges of labor shortages, cost management, and sustainability. 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. Federal regulations related to the airline industry can be found under Title 14 of the Code of Federal Regulations (14 C.F.R.) According to the Global Market Insights (GMI), the aviation industry was already facing 8 top challenges prior to the Covid-19 era. Well Fiscal policies such as excise taxes on airline tickets increase consumer 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. Researching These include fuel efficiency, the volatility of the global economy, passenger comfort and experience, airline infrastructure, global congestion, technological advancements, terrorism and climate change. 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 White Houses top medical adviser Anthony Fauci said in September that he supported a mandate for passengers too, but the travel industry was in disagreement and this remains a relatively uncommon measure worldwide. The airline industry is widely impacted by regulations and restrictions related to international trade, tax policy, and competition. Weve uncovered eight burgeoning archetypes, surfaced through industry-leading research, that provoke disruptions in the way the world thinks and what it values. A case in point has been the several flights cancelled due to the Omicron variant, causing havoc before Christmas. 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. Daniel Rutherford, program director for aviation with the International Council for Clean Transportation, said the standard would not require any new investment in fuel-efficient technology. We rely on our journalists to be independent observers. Note: This book is not available in the Harvard Library collections. Its also impacted byissues likewar, terrorism, and the outbreak of diseasessuch as Ebola. This increasing cost of doing business, facing competition from low-cost airlines, abiding with the rules and regulations imposed by the government as well as changes in the profile and demand of consumers have led the industry to make its external factor analysis for meeting the industry requirements. WebCommon legal issues faced in the airline industry include: Commercial and regulatory issues in connection with Federal Aviation Authority (FAA), Department of Transportation (DOT), In 2016, 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. This is mainly because Economic Factors. All companies in the airline industryincluding the top U.S. companies like Delta (DAL), United (UAL), American (AAL), Southwest (LUV) and JetBlue (JBLU)were negativelyimpacted by the 2001terror attack. This is mainly because of the risks associated and which can result in deaths or accidents or any irreparable damage. 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 itself, and is unlikely to diminish the industrys contribution to global warming. Insecurity or war factors that affect particular countries always have a negative impact on the airline industry. If you are an affiliate of Harvard Law School, you are welcome to contact us at research@law.harvard.edu for additional help. 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. These include supply decisions by oil suppliers, refinery expansion by oil companies and government decisions to open offshore drilling and fund alternate fuel research. Regulatory Bodies Mr. Wheeler said he was referring to a 2019 regulation on greenhouse emissions from power plants and an April rule governing emissions from vehicle tailpipes. 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. She is also quite enthusiastic about space ventures and the cosmos. Both economy and premium travelling declined. A forecast update on the global commercial airline fleet and aftermarket for 2022. These include fuel efficiency, Informative and inspiring worldwide coverage. Full text of the Act from the Government Printing Office (GPO). According to the International Air Transport Association (or IATA), the financial impact on the global and U.S. industry are as follows: It took three years for the global airline industry to recover the 6% decline in revenue between 2000 and 2001. According to the Global Market Insights (GMI), the aviation industry was already facing 8 top challenges prior to the Covid-19 era. The importance of technological factors can be understood from the heavy use of technology in the global airline industry. To match the reduced demand, airlines were forced to cut capacity by 2.8% in 2001 and 3.9% in 2002. Ecological factors impact the airline industry the most than any other 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? It reported its first profit of $5 billion in 2006 after four consecutive years of losses. 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. Operating costs are likely to increase in the short-run for both In addition, demand for air travel at 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. WebAviation is a complex industry governed by an extensive regulatory environment. Whether you are starting your first company or you are a dedicated entrepreneur diving into a new venture, Bizfluent is here to equip you with the tactics, tools and information to establish and run your ventures. Climate changes also have an impact on the aviation industry as airlines are now required to practice green flying procedure for protecting the environment. Environmentalists have long said aviation emissions need to be reduced to prevent the worst effects of global warming. The Trump administrations adoption of the aviation pollution standard appears timed to avoid a lawsuit that would compel it to begin regulating airplane emissions. 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. This means that reaching carbon neutrality in 2050 means acting today. In the past few years, there has been a reduction in business class travelling which is a huge loss for the companies. The future of the proposal will be determined by the results of the November election. This process involves huge finances; however, airlines cannot even compromise because even the passengers are held accountable for their carbon footprint. People may receive compensation for some links to products and services on this website. Fiscal policies such as excise taxes on airline tickets increase consumer prices, and that affects demand. He has worked in international sales, customer relations and public relations for major airlines, and has written for Demand Studios since May 2009. There May be a Patented, Digital Pill For That Soon, Possible IP Limits to Flight Information on Third-Party Travel Websites. Below is a list of selected treatises on this topic that are available from the collections of the Harvard Library. One such example is a PESTEL (Political, Economic, Social, Technological, Environmental and Legal factors) framework which is discussed below. That way, companies could continue to sell American-made planes abroad. (https://www.gpo.gov/fdsys/pkg/CFR-2004-title14-vol1/content-detail.html). 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. 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. 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. This section specifically discusses the US law of air transport. Materials from the ProQuest Legislative Insight subscription database. Dept. Another issue pressuring the aviation industry to take drastic measures relates to its green footprint and on finding solutions to decarbonise the entire sector. These issues are political. 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. According to the International Air Transport Association (or IATA), the financial impact on the global and U.S. industry are as follows: Latest Southwest Airlines Co News and Updates. Article by Klemchuk LLP, an IP law firm. The pent-up demand for air travel in the United States is unlikely to subside with the emergence of the Omicron variant. In 2001, the global airline industry recorded losses of $13 billion. Passenger traffic decreased by 5.9% year-over-year (or YoY) in 2001 and 1.4% in 2002. 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. Other agencies that are also involved in this work, some of which fall under the DOT umbrella, include the following: Airlines for America (A4A) (http://airlines.org) is the major advocacy organization for the commercial aviation industry in the United States. Automation is yet another factor affecting the airline industry as people make use of Skype features or hold a conference call instead of travelling. Marsh McLennan is the leader in risk, strategy and people, helping clients navigate a dynamic environment through four global businesses. The links below are to sources related to this topic that are available in the Westlaw subscription legal research database. Economic Factors Affecting the Airline Industry. Click a link to view its search results. As the single most important cost, policies affecting both fuel supply and price greatly affect airline viability. WebDemand for air travel is also affected by factors such as economic conditions, war or the threat of war, fare levels and weather conditions. PESTLE analysis is a strategic method through which airline companies can weigh all external factors that are affecting business. The U.S. airline industry revenue decreased to $107.1 billion in 2002 from $130.2 billion in 2000. Critics say the proposal does little more than codify a set of standards largely created by the aviation industry itself. Now passengers prefer those airlines which are providing extended services at low fares. In this section, we will have a look at the external factors affecting companies in the airline industry. In most countries, there are strict regulations for the aviation industry. They dont require any meaningful emissions reductions.. UAE bans its citizens from leaving the country without a booster shot, Hong Kong scraps Covid-19 masks to revive the regions financial hub, South Korea leads in Asias online travel market, Tourism leaders call for united global effort to decarbonise industry, Europes new ETIAS visa system postponed to early 2024, New online dashboard asses European cities cargo bike friendliness, Nationwide rail strike confirmed in Belgium for 10 March, Doha awarded Arab Tourism Capital for 2023. 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 In Future 1. According to an upcoming analysis by Mr. Rutherfords group, new aircraft had met the 2028 standard by 2016. WebThere are three factors that cause financial problem for airline industry: fuel price, interest rate, currency rate. The airline industry is widely impacted by regulations and restrictions related to international trade, tax policy, and competition. General 1.1 Please list and briefly describe the principal legislation and regulatory bodies which apply to and/or regulate aviation in your jurisdiction. Getting the Deal Through is a subscription database that provides information about applicable law in several business-related practice areas for multiple jurisdictions. Several policies have been devised to protect passengers more than the aviation industry. For more information, contact opendata@sec.gov. Anyone can read what you share. WebPolitical- legal factors As pursuing to develop globally, Singapore Airlines has to consider political factors in Singapore market and other countries as well. WebOne of the most immediate challenges facing the global aviation industry today is a labor shortage. These regulations cover all aspects of the airline industry, including the airlines themselves (carriers), as well as their equipment (aircraft) and pilots (airmen). All Rights Reserved. Additionally, recent crashes and attacks have affected the profitability and viability of the aviation industry quite badly. Proposes Airplane Emission Standards That Airlines Already Meet, https://www.nytimes.com/2020/07/22/climate/airplanes-climate-change.html. of Transportation looking into practices of travel websites and question of whether flight information is proprietary and protectable by the airlines. These factors made it difficult to generate profits. Booking.com awaits Supreme Court ruling as the USPTO appeals previous decisions finding BOOKING.COM, though a combination of generic terms, can be protected through trademark registration. Political Factors Nevertheless, there are various challenges that the airline industry faces which includes high operational costs, regulatory frameworks and demanding clientele. In this series well use the Political, Economic, Social, Technological, Environmental, and Legal (or PESTEL) framework to analyze the airline industry. Click the linked book title to view the book's record in the HOLLIS library catalog. Please contact Jennifer using the contact information above. Other pledges were put forward during the Glasgow Conference in late 2021. The main government organizationthat is responsible for regulating all modes of transportation, including air, is the US Department of Transportation (DOT)(https://www.transportation.gov/), a federal executive agency. 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. administrator, before a Senate committee hearing in May. 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. Political and legal factors that impact the airline industry. 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 passenger airline industry is affected by the following factors. Monetary policies determine interest rates and an airlines ability to purchase aircraft. Global commitments are preferred over regional initiatives to ensure the competitiveness of the aviation sector and its supply of fuel. Jeff Fulton is a writer specializing in business, travel and culture. Airline operations traverse wide geographic areas and are affected by policies imposed by governments at all levels local, national and international. 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. The links below are to sources related to this topic that are available in the LexisAdvancesubscription legal research database. WebThere are several factors that can positively affect the aviation industry and boost its growth such as the rise in purchasing power with the middle class and rapidly growing youth population, favorable demographics, economy flights/ Low Cost Carriers (LCC), growing tourism industry of India and a rise in passengers traveling by air within and Air travel and the aviation-centered economy have begun to soar back to pre-pandemic levels, with U.S. airlines reporting record bookings for summer travel in June 2022. AirlinesAutomotiveBlockchain TechnologyConsumer ProductsCosmeticsCryptocurrencyCybersecurityDigital ArtsDigital MarketingEcommerceEnergyFashionLuxury BrandsHealth TechnologyProfessional ServicesReal Estate DevelopersRestaurantsRetailSoftwareSporting GoodsTechnologyTelecommunications. Analysts and environmentalists said the neither the existing United Nations standard nor its formal adoption by the United States would do anything to lower aviation emissions because the airline industry met that standard years ago. Please declare your traffic by updating your user agent to include company specific information. Why political and legal factors impact the airline industry. The airline industry is widely impacted by regulations and restrictions related to international trade, tax policy, and competition. Its also impacted by issues like war, terrorism, and the outbreak of diseasessuch as Ebola. These issues are political. Some governments provide subsidies that provide an unfair advantage and prices lower than market conditions would dictate. Failing to be tech-savvy can result in loss of clients. The New People Moreover, airlines also struggled with increasing labour demands from the part of employees. 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