Report on Diamond Aircraft
Diamond Aircraft Industries Inc. is a General Aviation aircraft manufacturer that produces single and twin engine aircraft as well as single engine jet aircraft for the GA community. The following will be an analysis of the market environment for this organization, focusing on the Political, Economic, Social, Technological, and Environmental effects on the company.
Political Factors
Some obvious political factors that could have a significant effect on the market for general aviation aircraft producers include terrorism, deregulated marketing environment, and privatization just to name a few. For instance terrorism is having a major effect on the general aviation community. The Department of Homeland security is considering a proposal that general aviation airports would be required to have security assessments done looking for vulnerabilities and security risks (Lipton, 2007, pA11). Also all parked aircraft would be required to have ignition of propeller locks placed on them (Lipton, 2007, pA11). Another proposal is being made that could affect GA operators, specifically those flying charter, business or corporate (Lipton, 2007, pA11). Those traveling this way would be required to undergo terrorist-watch-list checks especially if they are flying into the U.S. from over-seas (Lipton, 2007, pA11).
Terrorism is the largest political factor affecting the market for general aviation aircraft producer. If the operators of these aircraft were required to go through the same level of security and scrutiny as passenger on large commercial flights even for short flights for personal reasons or recreational flying then the number of people willing to fly on GA aircraft or even the number of people willing to purchase these aircraft would suffer dramatically.
Economic Factors
The Economic environment plays a large part in the market for Diamond Aircraft. The sales of their aircraft could be affected by many factors in the economy. One such factor is the issue of user fees. The user fee has led to a near end to general aviation in other countries like Germany or Australia (Sickward, 2007, p20). The user fees are being proposed as a way to pay for the much needed upgrade of the current air traffic control system (Sickward, 2007, p20). However, most general aviators would prefer other methods to pay for it such as increased tax on fuel (Sickward, 2007, p20).
The general aviation business can also contribute greatly to the economy of the area surrounding an airport used by general aviation aircraft. A recent study done by the General Aviation Manufacturer Association showed that general aviation contributed more than $150 billion to the U.
The new trend in airline industry to use fuel efficient, high -tech aircraft is of a major concern for Air Canada. It has been under immense pressure to replace its fleet aircraft with more efficient Boeing 777 aircraft. However, the airline has purchased some Boeing777 aircraft, but these new purchases are used only for more profitable international routes depriving Air Canada’s domestic consumers of the facility. Furthermore, the varied fuel price has affected pricing policy significantly as its promotional policies are more price point based as compare to consumer based.
The terrorist attacks on September 11, 2011 prompted the world to reevaluate and drastically modify airport and airline security. “Four targets had been chosen, all iconic American buildings that would send a clear message of the depth of their hatred for the United States. All four planes crashed, killing all on board—terrorists, crew members, and passengers, along with hundreds who were killed inside the structures, on the ground, and the men and women who ran into collapsing buildings in an effort to try and save others” (Smutz 1). As Jason Villemez said “the decade after the 9/11 attacks reshaped many facets of life in America” (Villemez 1). Before the attacks, people did not think that large scale hostility towards innocent people in our country was remotely possible. Ever since that fateful moment, citizens in America are on their toes every day worrying about another attack happening. United States citizens have had to adapt and change in response to this fear of further terrorist assault on our country. One of the ways they have adapted is by changing their means of security concerning airline travel.
This paper describes our nation and the worlds mindset about airline terrorism before 9/11 and airline terrorism today. This remains a very real and deadly subject even though we don’t have as many incidents occurring at this moment in time. Still the potential for countless lives being lost in an aircraft accident from the actions of a terrorist or terrorist organization is still very real and innocent families across this nation and abroad remain the targets. Additionally, it will show that the security measures in place at airports prior to 9/11 were far less adequate, than today, and personnel responsible for airport security at the gates and throughout were either poorly trained or not trained at all when it came to hijackers and terrorist. This paper will also identify the extensive security measures, rules and training that have been put into place, which helped to curtail acts of terrorism onboard airliners.
After 9/11 there was a great increase in security nationwide. One major example of this is the number of agencies created as a result of 9/11. Among these agencies include the creation of the TSA (Transportation Security Administration), the DHS (The Department of Homeland Security), the ICE (Immigration and Customs Enforcement), and lastly the massive advancement of the US Coast Guard. Every one of the budgets of these agencies has doubled since 9/11. The creation of the transportation and security administrations primary goal is to improve the safety of all American Citizens traveling by plane. The TSA started implementing, new policies and new technological advancements.
The immediate financial repercussions of the terrorist attacks were astronomical. Makinen (2002) reports airlines received a $15 billion federal aid package. Additionally, insurance ...
On September 11th, 2001, four planes were hijacked, two planes hit the twin towers, one hit the pentagon, and one crash-landed in a field in Pennsylvania. Since then the government has been doing everything it can to help with security at airports, in airplanes, and in everyday life. Even though the government has been trying to increase security, terrorists have still been successful. Since 9/11, the government has taken many steps to increase security and decrease terrorism. However, security has increased, while terrorism has not decreased.
After September 11th, 2001, the airline industry experienced a significant drop in travel. The reasons for the airline industry downfalls also included a weak U.S and global economy, a tremendous increase in fuel costs, fears of terrorist's attacks, and a decrease in both business and vacation travel.
Elias, Bartholomew. "Aviation Security: Outlook." Issues: Understanding Controversy and Society. ABC-CLIO, 2014. Web. 2 May 2014.
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Government Support: - Boeing might seek government intervention in preventing Airbus from being able to sell to American airline companies thereby reducing the market availability for Airbus. But this could prove counter productive for Boeing as EC governments may retaliate in a similar manner
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Dixit, A. (2000). Growth of discounting in the airline industry: Theory, practice, and problems. (Order No. 9978379, Georgia Institute of Technology). ProQuest Dissertations and Theses, , 330-330 p. Retrieved from http://search.proquest.com/docview/304592352?accountid=8364. (304592352).
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The airline industry is very susceptible to changes in the political environment as it has a great bearing on the travel habits of its customers. An unstable political environment causes uncertainty in the minds of the air travellers, regarding travelling to a particular country.