The Influence of External Factor on Organization Capability of Schedulle Airline in Indonesia1

Derugalation in airline sector in 2001 and the issue of Airline Regulation of 2009 resulted in changes in the structure of airline industry in Indonesia.This changes led to the emergence of new scheduled airlines and thus caused tighter competition in this industry/business.The number of passengers kept increasing from year to year reaching the average growth of 15% annually within ten years. However, some scheduled airlines went bankrupt as a result of this. Airlines that were able to anticipate changes managed to survive or improve the performance of their companies while those failing to thrive had to face degrading performance. There were two variables used in this research consisting of External Environment and organization capability . The hypothesis of the research was that external environment could affect organization capability on Indonesian schedule airline. The Methodology of the research was Mix Methods and sequential explanatory. The respondents of the research were 34 executives of scheduled airlines . The analysis was done using PLS, and validity and reliability tests were done on the variables being studied. The result indicated validity and reliability of the instrument used. Meanwhile, the result of the test on the hypothesis was: The coefficient value of external environment against organizing capability of company was 0.447 with t calculation of 17.773 where t calculation value was bigger than t table of 1.96 and thus there was a direct positive effect of external value on organization capability Keywords: External Factor, Organization Capability, Corporate Performance, Scheduled Airlin