PESTEL ANALYSIS

Despite increasing liberalisation, e.g. the EU-US “open skies” agreement and an
upcoming one between the US and Japan, the industry is still highly controlled by
governmental regulations and single agreements, restricting free global competition. To
boost tourism, many governments regularly launch campaigns, e.g. the Japanese “Visit
Japan” campaign.

While economic recovery is expected to be slower in advanced economies, emerging

and developing economies should experience considerable growth, especially Brazil,
China and India. Additionally, China is already the biggest market of the industry in Asia
but still shows great potential for growth, and so does India. Still, repercussions
resulting in prolonged low consumer spending are likely, e.g. in Japan. Increasing oil
prices in the future will raise airlines’ already high costs further.

An ageing population in Western countries, e.g. Japan, makes the elderly an increasingly
important target group. While terrorism does not seem to have real long-term effects
itself, it necessitates high and improving security without annoying people and
discouraging travel.

Online booking will become more and more important and, combined with new ticket
technology will save costs. Technological progress promises increasing efficiency of
airplanes and alternatives to kerosene which are expected to be certificated until 2011
and employed as fuel blends in the medium term

As the interest in the environment increases, more restrictions on carbon emissions and
noise pollution like in the EU are very likely in the future