Question A Contents
1.0 Introduction page 3
2.0 Attractiveness of the budget airline sector page 3-4
2.1 The Far Environment page 3
2.2 The Near Environment page3-4
3.0 Is the budget airline industry attractive? Page 4-5
4.0 Appendix 1- BCG Strategic Environments matrix page 6
5.0 Appendix 2- Five Forces, or Six? page 6
Introduction
The national flag carriers who together accounted for the majority of passenger traffic traditionally controlled the European airline sector. These national carriers were protected by regulation allowing them to monopolise the industry.
However, over the past decade the industry has seen some drastic changes. European aviation has moved from a highly regulated industry, therefore having little or no competition, to a highly competitive single market allowing any corporation with an air operators certificate to demand slots at any destination. The historical dominance of the protected national flag carriers is now being eroded by more efficient low-cost airlines in the sector
Attractiveness of the budget airline sector
The Far Environment
In December of 1992 a tremendous political change occurred as the European Union passed legislation deregulating the airline industry.
Abduction of Europe
Europe Simulator
Election results since 1979Similar to the deregulation of the American industry a decade earlier, the new directive opened up the airline industry to competition.
There are many environmental influences affecting the budget airline sector. One of the major attractions in the United Kingdom is the strong sociological trend towards UK citizens travelling to holiday destinations in Europe . This trend of growth is estimated to continue and analysts have predicted the European low-cost market could grow by as much as 300% by 2004. With a large centralised population London stands out as one of the dominant markets for operations .
Other sociological trends are pushing towards customer flexibility. Traditional flag carriers have taken advantage of customers in the past charging...