United Airlines: Economic Environment Essay

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Presenting United Airlines Economic Environment

There is a severe cultural problem at United Airlines, according to a number of reports. For the business to provide greater customer service, staff involvement, development, and motivation must all be improved. The corporate culture of the corporation has come under scrutiny as a result of a string of PR issues. Then, it should be stressed that being stuck on an airplane during a flight is unpleasant enough, particularly in the economy. Even worse is being stuck inside a plane that is idle on the runway. When an unplanned land in Goose Bay resulted in a 16-hour delay for passengers, United Airlines came under fire (Mattheus, 2019). Passengers must have yearned for the amenities of hotels or houses when cooped up in an aircraft on the tarmac. Moreover, thousands of passengers experienced delays in 2012 as a result of technical issues with United Airlines (Mattheus, 2019). The company had to deal with irate passengers at a period when it was attempting to recover from negative feedback on similar errors in earlier months.

The issue of overbooking is a contentious one in the airline business. Clients who purchase flight tickets fear the possibility of having their planes canceled due to overbooking procedures. United Airlines made several modifications in 2017 in response to harsh criticism of its overbooking strategy (Mattheus, 2019). The overbooking strategy was not abandoned, as some news coverage of the incident appeared to suggest. The rule was changed such that crew members may not remove customers from aircraft to make room for United Airlines staff members unless their presence was deemed critical to the airline’s ties.

The depicted issues of the company’s environment resulted in many problems. For instance, United Airlines’ attendants began protesting outside of airports to denounce the anticipated personnel reductions. They believed the proposed personnel reductions would have a severe impact on passenger service and safety. What is more, many individuals sold their shares after a passenger was forcefully ejected from the company’s aircraft in 2017. They refused to own United Airlines shares, which is a pressing economic factor for any firm. The corporation lost 255 million of its market value soon after the event (Mattheus, 2019). Hence, financially and in terms of public perception, the occasion had serious repercussions.

Comparing United Airline’s Economic Environment to the Global One

Decision-makers in the airline industry must continuously adapt their tactics and come up with new ways to reduce costs and boost earnings in order to stay above ground. These challenges include growing rivalry and consumer needs, labor shortages and workers’ strikes, and variances in fuel prices. Then, appealing to Rostow’s theory essentials (Rostow, 1959), it seems that the airline industry is under the influence of the age of high mass consumption. This implies that broad consumer demands should be met by mass production. In the case of the economic environment of the airline industry, mass service provision should be of high quality and correspond with the risk factors listed above.

United Airlines’ economic environment does not tend to overcome such challenges and simply aims to serve the maximum number of clients possible without paying the necessary attention to the nuances and ambiguity of modern challenges. This is visible from its issues with the software, poor corporate social responsibility, and lack of customer trust. Using Galbraith’s ideas (Grether, 1968), the fact that a business actor simply broadens its arena for service provision (growth) does not mean that this arena’s requirements are met properly. Thus, United Airlines’ environment cannot be considered acceptable, taking into account the features of the industry’s developed one.

References

Grether, E. T. (1968). Galbraith versus the market: A review article. Journal of Marketing, 32(1), 9–13.

Mattheus, H. (2019). The Travel.

Rostow, W. W. (1959). The stages of economic growth. The economic history review, 12(1), 1–16.

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