SWOT & PESTEL Analysis of Blue Air Airways: A Comprehensive Report

Executive Summary

The report was based on the airline “Blue Airways”. The report performed SWOT & PESTEL analysis on Blue Air Airways and then later discussed how the PESTEL factors influence the threats and opportunities of the business. Later, the report addressed the strengths of Blue Air for analysing weaknesses and threats that are affecting the business. The discussion was also on various leadership styles. The leadership styles that were included in the report are Autocratic, Authoritative, Pacesetting, Democratic, Coaching, Affiliative, and Laissez-Faire styles along with one advantage and one disadvantage. According to Blue Air Airways, the Democratic Leadership style is the most applicable leadership style for achieving the target of having a fleet of 50 aircraft in the upcoming 3-4 years, for building its reputation as one of the leading brands in the airline industry in Romania, to become the Ultra-Low-Cost carrier preferred by the passenger & to provide digital-first services to fulfill the needs of the passengers. In the end, the discussion was on the response, obligations, and responsibility in Blue Air Airways' ethics & social responsibilities in the whole process.

Introduction

This report will be based on Blue Air Airways. In this report, SWOT and PESTEL analysis will be done. The report will be analyzing the effect of the PESTEL factors that influence the threats & opportunities of the organization. The discussion will further carry forward in commenting the Blue Air Airways addressing the strengths to overcome the weaknesses and threats that are affecting the opportunities. The report will also discuss various leadership styles along with commenting on the relatable leadership style in favour of Blue Airline for achieving its objectives. At the end of this report, the ethical and social responsibilities of Blue Air Airways will be discussed.

Company Profile

Blue Air Airways is the Romanian LCC. The headquarters of the organization is situated in Bucharest. The hub of the organization is located in Henri Coand? International Airport. Blue Air Airways is Romania’s largest airline by the passengers scheduled that are flown. In the year 2017, the airline carried above 5 million passengers and there was an increase of 40% above 3.6 million passengers from the passengers flown in the previous year. Blue Air Airways have fifty-seven destinations that are scheduled.

1. SWOT Analysis & PESTEL Analysis

SWOT Analysis

Strengths –

1. Blue air Airways has created a successful culture among the distributors; therefore, the distributors help the organization in promoting their services along with goods. These distributors also help in investing in the staff related to sales and demonstrate how the clients can gain all the benefits from Blue Air Airways.

2. Solid distribution network: Blue Air Airways has recognized a steady supply chain over the period that can cover abundant of its market potential (Vlados 2019).

3. Excellent New Market Presentation- Blue Air Airways has obtained excellent experience in growing as well as entering in the international markets apart from Romania market. This expansion and knowledge helped the organization in regaining the sources of revenue and diversified economic impacts along with recession in the market where it serves.

4. Blue Air Airways is highly focused on sustainability in the market as an organization on fuel-efficient flights and invests in carbon-reducing footprints. This is helping the organization in strengthening its image in the market.

Weaknesses –

1. The organization’s structure is only continuous when the busines model of the organization is consistent, but Blue Air Airways have restrictions lacking the organization from development in all the surrounding segments.

2. The organization’s integration in various cultures are not that effective, although, Blue Air Airways is effectively capable of handling small business but it does carries high failure experience in the part of organization integration with various working cultures.

3. Blue Air Airways is highly dependent on the domestic market of Romania, although it has international routes being over-dependent on the local market is one of the weaknesses of Blue Air Airways

4. Because of upgrading skills and evolving innovation in the services provided in Blue Air Airways. This created a set benchmark for Blue Air Airways in whole Romania. Therefore, the organization is needed to maintain its high investments and maintenance is the biggest weakness.

Opportunities –

1. The market enhancement will lead towards the concentration including its competitor's advantage will consent Blue Airways in improving competitiveness compared to many rivals.

2. The government green campaign likewise creates an encouragement for federal and state government companies to purchase Blue Air Airways goods.

3. Growing market and great customer services are some of the best quality of Blue Air Airways therefore, bringing technological and digitalization innovation will increase the brand name of Blue Air Airways.

4. Expanding the portfolio of the services like providing premium services will help the organization gain high revenues from the existing & local markets. As these premium services will help the organization attracting high business with quality services.

Threats –

1. The local and international markets for all the profitable goods are seasonal but there is also occurrence of the unlikely terms during the peak times. The profitability of the organization varies from short- and medium-term effects (Gürel and Tat 2017).

2. The lack of skilled labor in some international markets gives high challenges to Blue Air Airways' stable growth in profits within these markets.

3. As the organization have their operations in many countries, there might be price fluctuations varying from one country to another especially in different markets globally, the main reason can be because of the political environment violation.

4. The organization is gaining high competition in the market, being a low-cost airline, there is high competition and maintaining its reputation in the market as many airlines are operating along with niche segments making a huge loss for Blue Air Airways.

PESTEL Analysis

Political Factors – In most countries, there are tough regulations for the airline sector. Many policies are devised for protecting the passengers	Economic Factors – Both premium and economy travelling are declined. Blue Air also needs to cope up with rising fuel prices
Social Factors – Blue Air needs to meet all the evolving demands of the clients Another factor that is affecting the organization is automation, as clients prefer skype meetings in place of traveling.	Technological Factors – The preference of the passengers is to access check-in services & access ticketing with the devices such as mobile and laptop instead of dealing with all these manually. Increasing advancements of technologies will help the company in gaining profits via enhanced services and safety.
Environmental Factors – The organization needs to consider the fuel expenditure as it needs to invest in fuel-efficient and environmentally friendly aircraft. There is also an impact of climate changes on the airlines as it needs to practice procedures “green flying” for environment protection.	Legal Factors – Many laws are devised for air safety and traffic and also for the passenger’s security. Airlines also offer many regulations that offer safe traveling with great-quality services.

The PESTEL Analysis indicates that Blue Air airways need to overcome the political factors as the political factors have set very high expectations for the airlines, the airline is focusing on being one of the best airlines in Romania, so it needs to consider making good connections with political factors so that they won't hamper the airline in accomplishing its target, along with that the organization also needs to consider above the Environmental Factors, as the passengers nowadays check all the points before choosing the airline they want to fly in, so being environmental friendly is a necessity for the organization. The organization needs to work considering all the legal and social factors by advancing their technological factors in overcoming the barriers in achieving their target (David, 2019).

2. Evaluating changes in PESTEL factors influencing Opportunities and Threats.

Political factors are one of the factors influencing the opportunities in the market towards the positive side. This will help the organization to open up with all the new markets as they will gain an agreement with the government. The Technological factors also play a huge role as they will help Blue Air Airways to practice various pricing strategies in the international or new market. The legal factors will influence the opportunities of Blue Airways by putting the new taxation policy leading them to do their business in profit-driven mode. Blue Air Airways will be able to maintain their loyalty towards the customers and get their loyalty in return. Same technological changes also possess a threat to the organization as the development of the new technologies by the rivals will impact the organization in long term. The social factors have an influence on the threats of the company as the varying demands of the clients for bringing tech-savvy applications or in other words online channel, these all threats are influenced with the technological factors where the physical infrastructure is driven model of the supply chain. Liability laws from the various organization in legal factors also have an impact on Blue Air Airways of exposing in front of various claims in liability giving changes in the policies in considered markets. The threat of currency fluctuations in various countries is handled by the organization using the strength of good capital returns in expenditure without having any impact on the opportunities such as unrestricted cash flow stability helping in investing the segments of the product (Abebe et. al., 2020).

Strengths to Deny Threats and Weakness Affecting the Opportunities

The organization uses its strong distribution channel to overcome its demand forecasting weakness and keeping inventory at a very high level in comparison. Blue Airways also uses its providing customer satisfaction at a high level as its strength for beating the treats of changing customer’s behavior as the organization believes that loyalty is the best factor that attracts the customers (Vigna et. al., 2018). The other threats faced by the organization impacting opportunities such as new technology providing an opportunity for practicing the pricing strategy by using its superb new market performance in the new markets. Blue Air Airways also used its strong unrestricted cash flow for overcoming its investment in the latest technologies to give tough competition to the rivals (Pramitha, Wasito, and Ozali 2018).The weakness of maintaining its reputation in the market even after facing huge competition from the companies can be covered by strong distribution channel control by the airlines, this will help the organization in dealing with all the high-maintenance and extra cost with the help of local suppliers of fuel, aircraft, etc. The threat of highly profitable goods and customers in the seasonal period can be diminished with the help of great market performance strength of the organization where the organization can give extra-ordinary offers, discounts, coupons, additional services for attracting the customers towards the airlines and regain the growth of customers towards the airline. The threat of lack of skilled labor in the organization because of the global competition, the organization is focusing on training their new employees and building their skills, so that their skills are developed and the employees stay loyal with the organization for a long period. Blue Air Airways use their strengths very effectively and efficiently to overcome its threats and weaknesses so that these threats and weaknesses of the organization won’t hamper the brand image and goodwill created by the employee.

3. Leadership Styles

There are various leadership styles used by different leaders according to the situations. Majorly, there are 7 leadership styles –

1. Autocratic Leadership style – in comparison to all other leadership styles, this leadership style states – “Do as I Say”. Unlike other leaders the leaders under this style the leaders believe that they are the smartest ones and know about everything in comparison to other leaders. In today’s era, this leadership style does not work towards success.

Advantages	Disadvantages
Strong encouragement to the leader	Employees exploitation

2. Authoritative Leadership style –Under this style, the leaders believe in stating “Follow me”. This style represents strong and confident leaders who built the whole way and build expectations along with engaging with them by motivating & energizing the followers.

Advantages	Disadvantages
The leaders under this leadership style bring clarity, by making the employees understand the organization's strategic goals.	The leaders under this style may appear to be overbearing.

3. Pacesetting Leadership style – The leaders under this style is mostly indicative and state “Do as I do”. These leaders set the pace as if there is a race going on. This style is effective in today’s era, as they get the tasks done and drive towards the results. But the limitations are this style can hurt the members of the team, as it applies to stress working (Gandolfi and Stone 2017).

Advantages	Disadvantages
This leadership style helps the organization in achieving its goals quickly.	This leadership style makes the employees feel unmotivated, stressed, and overwhelmed.

4. Democratic Leadership style – this is the most effective leadership style under which the leaders seek the opinion of the team members. The leaders state “What do you think?”. This style benefits in gaining the trust of the team along with promoting team spirit. Under this style, there is coordination and cooperation among the team members.

Advantages	Disadvantages
It allows communication in a free-flow among the leader and employees.	The maintenance of secrecy is hard to maintain

5. Coaching Leadership style – unlike all the other leadership styles, under this style leaders open the hearts & doors for the team members. According to them, each person carries power in themselves. The leaders coach the people’s views as a reservoir of talent needed for development.

Advantages	Disadvantages
With the help of this leadership style, employees are aware what are the expectations of the organization with them.	Mentoring under this leadership style is not always the correct approach.

6. Affiliative Leadership style – Under this style, according to the leader “people come first”. Among all the leadership approaches this leadership style brings and connects the leaders with the team members, as this style encourages harmony by forming a collaborative relationship within the team members.

Advantages	Disadvantages
Leaders can quickly resolve conflicts in the organization	This leadership style can lead to a low team level of productivity.

7. Laissez-Faire style – This leadership style is totally opposite of the autocratic leadership style. In comparison to all the other leadership styles, this leadership style involves very little oversight. If compared it can be said that an autocratic leader in a firm is a rock on all the issues whereas the leader in the Laissez-faire style lets the team members coordinate with the present (Gandolfi and Stone 2018).

Advantages	Disadvantages
It encourages creativity, innovation, and personal growth in the organization	Leaders under this leadership style hold less accountability.

Suitable Leadership Style for Blue Air Airways

The appropriate leadership style for Blue Air is the Democratic leadership style, as the leaders in Blue Air seek opinions from the leaders so that they can improve their working process. Blue Air is known for the impeccable safety in the flight journey record, indicating the coordination with the team's cooperation. The leaders gain the trust of the employees as they promote the team spirit in the employees. The leaders also allow creativity that allows the members to grow & develop and also leading the organization to achieve its target in developing the Ultra-Low-Cost Carrier of their choice, this will help the organization in approaching the center of the passengers in providing the needs of digital-first services. This leadership style will allow the participants in the company to include themselves in decision-making procedure, the team members are encouraged for participating, leading to increasing the involvement feeling, satisfaction & recognition. This will allow the employees to participate with enthusiasm and know that they matter in the team. This will also allow the team to come up with many important valuable points, ideas. Blue Air is targeting to become the Ultra-low-cost-carrier in Romania, this target can only be achieved when there is internal togetherness in the organization, this leadership style will help to resolve the conflicts in the organization by efficiently solving the problems that occurred in the organization related to the target (Cote 2017).

4. Suitable leadership style for meeting objectives of Blue Air Airways

The objectives of Blue Air Airways are

1. To target a fleet of 50 aircraft in the upcoming 3-4 years, for building its reputation as one of the leading brands in the airline industry in Romania.

2. To become the Ultra-Low-Cost carrier preferred by the passengers

3. To provide digital-first services to fulfil the needs of the passengers

As all the objectives of the organization are clear and the organization wants to achieve this objective in the upcoming 3-4 years, then the organization must use a Democratic leadership style, as under this leadership style, as the objectives are clear for all the employees and now leaders can ask the employees how these objectives can be achieved, the leaders under democratic leadership style will consider all the employees in decision-making. The employees will get the opportunity to exchange their ideas, views, and opinions freely. There is encouragement in the employees to take initiative and participate in the discussion. This process will help in focusing on equality in a group where the ideas freely flow, this will give the employees to work freely where the leaders are still there for guiding and controlling the tasks. This leadership style will help in gaining effective results from the group. This will help the organization to gain its objectives along with the accomplishment of the set objectives of Blue Air Airways. This process will help the whole group is being engaged throughout the process. The leaders can encourage, motivate and reward the employees from time to time for gaining quick and effective results (Peker, Inandi, and Gilic 2018).This leadership style will help the organization possess the objectives with intelligence, honesty, creativity, fairness, competence, and courage. The leaders of Blue Air Airways inspire respect and trust among the employees of the organization. The decisions are considered by following the values and morals of the organization. Employees will also feel inspired in taking action and give their best contribution to the team. The leaders will get unique and diverse opinions as they will not abandon any employee while they are sharing any of their ideas or views. For providing digital-first services to fulfillthe needs of the passengers, the leaders will need to work with the technical team of the organization where they have to make such apps in the organization that promotes the handy approaches or use of the app in which the passengers feel comfortable in using the app, the innovative approaches are needed to adopt by the organization, for doing so the leader can ask the opinions of the team members and consider their views for developing the unique application for friendly use (Chukwusa 2019). By asking the views of the team members will help both the team and organization to create an innovative application, the discussion can also be on what problems may raise while creating the application or while later using it and at the same time, the group can also discuss how these issues can be solved while making the application. Another objective of the organization is targeting the fleet of 50 aircraft in the upcoming 3-4 years, for the leaders must work in coordination with the advertising department along with the technical team. The leaders will ask the team members about how they can study the market in knowing the views of the passengers and how they can build advertisement campaigns promoting the reputation of Airways. The team leaders can ask to conduct surveys to know the preference of low-cost-carriers and needs from the low-cost-carriers, what are the preferred destinations of the passengers, what % people prefer internet booking etc. All these objectives can be easily achieved in the set period with the help of democratic leadership styles without putting pressure or workload on the employees (Bakare and Ojeleye 2020).

5. Responsibility, Response & Obligations in social and ethical responsibilities

Ethical Responsibilities of Blue Air Airways –

Blue Air Airways has developed their business progressively through considering all the ethical responsibilities in the industry, they consider their passenger travelling through confidentiality, fairness, and honesty. The organization focuses on taking responsibility by meeting all the obligations. The organization also believes in telling the truth to the passengers, they don’t hide the details or make fake promises to their clients (Cheng and Shen 2020).Blue Air Airways believes in keeping its promises and avoid any kind of harm to the people travelling by Blue Air Airways. For example- if any celebrity is traveling by Blue Air Airways then the airways have to hide their confidentiality and not expose the celebrity to the world. Another ethical obligation is providing safety to the passenger it is the basic aviation profession’s need. Blue Air Airways is very specific about the concerns of the customers, for example- if any passenger feels uncomfortable during their flight, the cabin crew ensures their best to make that passenger comfortable in their travel. The ethical behavior by Blue Air Airways includes anonymity and confidentiality, informed consent, voluntary participation, communicating the results, the potential for no harm, etc. The organization makes sure to not harm any of the passengers by any means. They ensure that all the passengers travelling with the airline receive the best support, respect, and safety until they safely reach their destination (Soriano and Castaño 2020).

Social Responsibilities –

Blue Air Airways sense its social responsibilities majorly confronting 7 concern areas – they are towards the environment, customers, employees, and investors.

Their social responsibility towards the environment includes cutting costs by saving energy and eliminating waste, enhancing the morale of the employees, and helping them better in attracting quality staff. They believe in bringing a competitive edge by putting the organization at the forefront of regulatory and technical development. The organization believes in being integrated socially active thinking for their production plans & marketing efforts. For example – the organization is focusing on designing such products that are environmentally friendly and in areas they are potentially booms (Chang, Ji and Arami 2019). The organization’s responsibility towards the customers is to provide quality services and fair prices according to consumer rights. The shareholders are encouraged when the organization makes the best of the money for them. The objective is clear that the organization must follow the trusts of ethical investments apart from just financial returns. The ethical responsibility of Blue Air Airways is to make their employees work through team coordination, professionalism, mutual respect. The employees must follow hygienic approaches in the organizations such as they must through all the coffee cups in the bin instead of putting them on the table. The company must ensure that the employees believe in their commitment to treating them with politeness and decency. The employees must be treated fairly and honestly and they must not be arbitrarily rejected. Blue Air Airways believes that if it will treat the employees fairly then they are likely to come back to the same organization later, and in the long run for performing best in the industry they need experienced staff (Park 2019).

Conclusion

This report summarized by doing the PESTEL and SWOT analysis of Blue Airways. The report focused on how the Pestel factors were influencing the threats & opportunities of the business. The report identified that the Democratic Leadership style was the best leadership style for Blue Air Airways for accomplishing its objectives. The report, however, also discussed various leadership styles and further commented that Democratic leaders are best for the organization for growth in new markets. In the end, the report concluded by stating various ethical and social responsibilities of the organization towards the investors, employees, clients, and shareholders.

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