Reinventing The Airline Business: No Frills Ailines.

7910 words - 32 pages

1. The marketplace is changing radically as a result of major societal forces such as technological advances, globalization and deregulation. Customers increasingly expect higher quality and service and some customization.? How can this statement be justified based on the facts presented in the case study?2. Does the new model of reinventing the airline business give a sustainable competitive advantage?1.Executive SummaryIn 1978, only 275 million people took to the skies - a number that more than doubled to 600 million in 1997. Over those years, the number of competing airlines soared from 39 to 95 and adjusting for inflation, airline tickets are 37% cheaper today than they were before deregulationThe demand for international air transportation is a joint function of:*the business environment*the flow of tourists*the demand for airfreightWhile The main drivers for the acceleration of traffic are:*the rise of world GDP*globalization*increasing world trade and investment*higher percent of retired persons*liberalizationInternational tourism receipts and arrivals have been growing every year. During the decade 1990-2000 the number of tourists increased from about 450 million to 700 million. The increase in leisure travel is also caused by a rise in the percent of old age persons.The introduction of an open competitive aviation market in Europe has broadly been a success. The arrival of low fare carriers such as EasyJet, Debonair and Go illustrates a market in which competition is taking hold, and benefiting the passengers.The reduction in labour costs, combined with other methods of cost reduction such as Outsourcing and Franchising have shown to have decreased airline costs. The more radical strategy of 'No-frills' operations has been the most significant post-deregulation development and are now seen as benchmarks for firms to compete with.The single aviation market within the European Union has seen substantial growth amongst smaller and medium-sized scheduled airlines. The most noticeable instances of new entrant competition have been in the domestic markets and those larger EU states which, prior to the Third Package, had the most restrictive attitudes towards competition with their national carriers.2.The Airline Industrya.The marketThe airline industry is a $3.5 trillion a year business. The total scheduled air traffic carried by the 716 scheduled passenger service airlines and the 91 scheduled all freight service airlines from 185 contracting states of ICAO (International Civil Aviation Organization - ) amounted in 2000 to about 1,647 million passengers and to some 30.2 million tons of freight.*In 1945 the number of air passengers was meager 9 millions*It was 59,000 million in 1954*514,496 millions in 1974*1,027,856 millions in 1987In the year 1994) the 29 member airlines of the Association of European Airlines ( used a fleet of 2,225 airplanes to fly 311 million passengers and 5 million tons of freight...

Find Another Essay On Reinventing the airline business: no-frills ailines.

Case Study - EasyJet

4803 words - 19 pages differentiating into other business areas such as EasyCar, EasyHotels, etc. (EasyEveryhing) in order to compensate for possible threats and weaknesses. (Clark, 2004)11. FUTURE FORECASTS OF COMPANY'S POSITION AND KSFs SUSTANBILITYWhen referring to the analysis conducted for both the overall external environment of the industry in general, and the internal environment of the company it self, we can argue that EasyJet as a LCC no-frills airline has a

Scope for competitive advantage: Australian Airline Industry.

613 words - 2 pages of three business models 1) offering premium service at a full fare, 2) full service at average fares, or 3) low fares with no frills. The service could be varied by its on-board service, baggage handling, ticket and gate operations.Price policy: The low fare strategy pioneered by Southwest Airlines becomes a generic strategy within airline industry. Deregulation in most major international markets has led to harsh market share driven

Low-cost airlines success

992 words - 4 pages The phenomenon of low-cost airlines is relatively recent in the airline industry, and it was firstly introduced by Southwest Airlines, set up in 1067 and the only American airline that has been consistently profitable for the last thirty years . It took much more time to see the first low-cost, no-frills European airline, Ryanair, in 1991, which emulated the Southwest's budget model. "We went to look at Southwest. It was like the road to Damacus

Deregulation of Aviation

1679 words - 7 pages The airline industry has been subject of intense price competition since it was deregulated, and the result has been a number of new carriers which specialize in regional service and no-frills operations. These carriers typically purchase older aircraft and often operate outside the industry-wide computerized reservations system. In exchange for these inconveniences, passengers receive low fares relative to the industry as a whole. This research


1566 words - 6 pages Deregulation of the Airline IndustryThe airline industry has been subject of intense price competition sinceit was deregulated, and the result has been a number of new carriers whichspecialize in regional service and no-frills operations. These carrierstypically purchase older aircraft and often operate outside the industry-widecomputerized reservations system. In exchange for these inconveniences,passengers receive low fares relative to the

Southwest Airlines Strategic Plan

933 words - 4 pages satisfaction, employees' loyalty and work ethics Southwest continues to be the leader. At Southwest Airlines the company's mission and vision is as active as it was when the business first started in 1971, no surprise it was recognized as the number one place to work in 2014. Southwest was also name number one in Customer in 2013 by Airline Quality Rating and also received the Freddie Awards for Best Loyalty Credit Card and Best Customer Service

International Airline Industry

1590 words - 6 pages offer package tour type weekend breaks, focusing on golf, spa and leisure outdoor breaks and packages, themed around sport and music. The introduction of no-frills airlines has forced the larger tour operators the change their business ideas. The package though does not include the flight because under ATOL rules airlines are not allowed one full package but customers and directed to the Airline website for flights.Globalization and consolidation

The Airline Industry After 9/11

2113 words - 8 pages and labor. An estimate of up to 40% of an airline’s expenses is related to paying their employees. The airline industry not only transports passengers across the country and world but it also moves cargo from location to location. The largest segment for the airlines is general commercial passengers and business travelers. In 2004, there were 15 major airlines with 12 of those being mainly passenger carriers, the remaining three being cargo

EasyJet Marketing Research

3557 words - 14 pages Southwest of U.S pushed the first low cost model to against major airline at U.S. It includes:"Low fares; high frequency flights; point to point service; no free meals or drinks on board; no seat assignment; short flights; and flights to secondary airports." (Strategic direction, 2006)After Southwest achieved great achieve, at 90s EasyJet and Ryanair adopted the low cost model and expand the business across Europe market. The low cost model of Southwest

SWOT Analysis of Ryanair Holdings PLC

1200 words - 5 pages in the near future. Introduction Strengths Ryanair is known as Europe’s first low-cost, no-frills airline company. This alone is one of the company’s strongest selling points. It carries around 34 million passengers a year across 107 locations round Europe, totalling some 266 routes. The company has a leading market share on most UK and Ireland routes and around 43 percent of all Dublin-London and 45 percent of all other Dublin passenger

Southwest Airlines Risk Management

879 words - 4 pages revenue it generates. Southwest has dealt with this risk by pursuing a low-cost/low-price/no-frills strategy that features offering passengers a single class of service at the lowest price possible fares making air travel affordable to a wide segment of the U.S. population.One of the most noticeable risks faced by the airline industry is price wars that occur when one airline cuts fares on certain routes and forces others to follow suit resulting in

Similar Essays

Evaluate To What Extent Have The "No Frills" Airlines Coped Better In The Decline Of The Airline Industry Following The Events On September 11th

1709 words - 7 pages Evaluate To what extent have the "no frills" airlines coped better in the decline of the airline industry following the events on September 11th and explain what could have led to their continued success.Introduction.The decline of the air industry was evident even before the events of September 11th. The global economic slowdown had left airlines suffering from excess capacity as passenger numbers, especially lucrative business travellers

The No Frills Airlines Essay

1573 words - 6 pages matures, however, a potential over-supply of airline seats means that some no-frills airlines will struggle to survive.The report highlights the differences between the business models of the two most successful European no-frills airlines; easyJet and Ryanair. It analyses the economic performance of over 20 of Europe's charter and no-frills scheduled operators, benchmarking these against low-cost carriers in the USA. It also describes how the

Critically Evaluate The Assertion That "Auditing E Business Is No Different From Auditing Any Other Business"

1777 words - 7 pages Critically evaluate the assertion that "auditing e-business is no different from auditing any other businessFor me to be able to answer the question I must first understand what e-business is and how different it is to traditional business. An e-business is the delivery of information, products/services or payments via telephone line, computer networks or any other means. It is the application of technology towards the automation of e-business

The Rise And Fall Of The E Bay Reich Essay (2008) On E Bay By Richard Bilderberg. Works Cited, Appendix. No Attachments. Media & Business Studies: E Commerce

10718 words - 43 pages , templates and never properly addresses customer concerns. The most commonly used term to be found in the eBay templates is "proprietary" - The dictionary meaning for proprietary is something that is secret or privileged. When this term is used by the eBay staff it means "we have no idea what we are doing and you want us to tell you?" When the eBay staff is asked to justify a statement or decision that is contradictory to eBay rules, practices, or