Question

In strategic management, the purpose of the external assessment is to develop a list of opportunities that could benefit a firm and threats that should be avoided. What are the threats and opportunities has COVID 19  created for the airline industry? For example, DELTA AIRWAYS in the USA? Briefly discuss your answer?

Answer 1

The threats that COVID 19 has created for the airline industry are as follows:

• Many countries have imposed total lockdowns to stop the spread of COVID 19. Airline services have been completed grounded in such places which may lead to huge losses for the airline industry. Eg: India has imposed a 21-day lockdown, and all domestic and international flights are non-operational in the lockdown period.
• In places, where some airlines are still operating, there is a significant fall in the number of passengers., as most people have postponed their travel plans due to COVID 19.
• Airlines have huge liabilities like aircraft lease, the salary of pilots, air hostesses and other staff, which may become very difficult for them to manage.
• Even after the effects of COVID 19 are over, people may still be concerned about it and may keep their vacation or travel plans on hold.

The opportunities that COVID 19 has created for the airline industry are as follows:

• The time which COVID 19 related lockdowns have provided to the airline industry can be effectively utilized by airlines to streamlines their processes. Airlines can strategize during this time so that they can reduce costs and improve efficiency when their normal operations resume.
• Once the COVID 19 situation improves, there would a surge in business activities all across the globe. This will lead to a sharp increase in business and work-related travel.

Airlines like Dela Airlines and United Airlines have been affected very badly due to COVID 19. In order to reduce their losses and to retain their customers, they are offering benefits like waiver of flight reschedule fee and destination change charges.