Assignment Format

External Factor Evaluation (EFE) Matrix

Opportunities

* Airline market growth offers continual expansion opportunities for both leisure and business destinations

* Technology advances can result in cost savings, from more fuel efficient aircraft to more automated processes on the ground

* Link-ups with other carriers can greatly increase passenger volumes. By coordinating schedules, airlines can offer service to destinations via a code share agreement with a partner carrier

* Growing global air freight and logistics

* Growth in US airlines industry

* Passenger traffic in Asia Pacific

* International Expansion of Continental Airlines

Treat

* A global economic downturn negatively affects leisure, optional travel, as well as business travel

* The price of fuel is now the greatest cost for many airlines. An upward spike can destabilize the business model

* Terrorist attack anywhere in the world can negatively affect air travel

* Government intervention can result in new costly rules or unexpected new international competition

* Intense competition and price discounting

* Foreign currency fluctuation

Strengths

* Despite downturns, over time air travel continues to grow

* Public acceptance of air travel as both a fast and safe way to travel

* Airline staff is highly trained and experienced

* Airlines have the ability to segment the market allowing them the ability to establish different levels of service and make associated pricing decisions

* Operational performance (strong management team)

* Advantageous location of hubs

* Strong industry position or strong brand

Weaknesses

* Airlines have a high spoilage rate compared to most other industries. Once a flight leaves the gate, an empty seat is lost and non-revenue producing.

* Aircraft is expensive and requires huge capital outlays

* Large workforces spread over large geographic areas, including international points, require continual communication and monitoring

* While the business climate can change quickly, airlines have difficulty