Economic profile the airline industry essay

Airline Industry Overview The international airline industry provides service to virtually every corner of the globe, and has been an integral part of the creation of a global economy. The airline industry itself is a major economic force, both in terms of its own operations and its impacts on related industries such as aircraft manufacturing and tourism, to name but two. Few other industries generate the amount and intensity of attention given to airlines, not only among its participants but from government policy makers, the media, and almost anyone who has an anecdote about a particular air travel experience. At the same time, airlines were heavily regulated throughout the world, creating an environment in which technological advances and government policy took precedence over profitability and competition.

Economic profile the airline industry essay

I also hold a Bachelor in Business Information Management. My speciality is the application of information technology to solve problems in business and industry, and I have had two papers published in this area. Outside of my professional life, my interests include law and developments in financial markets.

I work as an analyst in a consultancy that provides business intelligence to several high-profile financial corporations. Impact of E-commerce on the Airline Industry Introduction E-commerce is defined as the purchase or exchange of goods and services over the Internet, between individual consumers, businesses or other organisations.

However, EDI required the usage of expensive and complicated private networks which nullified its impact on consumers and small enterprises.

The advent of the World Wide Web, which used the Internet and its low cost and ease of entry, radically changed this landscape to allow access by individual customers as well, thus revolutionising trade forever Rincon et al, The convenience of being able to purchase goods and services without time and geographical constraints has led to the rapid uptake of e-commerce, and one of the sectors at the forefront of the e-commerce revolution has been the air-travel industry.

Surveys show that these are among of the most popular of all transactions conducted online, and over the next few pages we shall examine why this is the case and take an in-depth look at the impact of e-commerce in the sector. E-commerce sector briefing- Impact on the airline industry A lot of the e-commerce principles and methodologies were actually pioneered by the airline industry.

The first exchanges of business-to-business electronic information owe their existence to the airline industry.

The availability of reliable low-cost communications through the Internet enabled airlines to calibrate consumer supply-and-demand cycles, produce multi-pronged product marketing strategies and practice dynamic pricing structures Smith et al,Interfaces.

 · Economic issues 42 The world economy 42 Labour costs 43 Oil prices 44 Fuel-efficient aircraft • What is the likely outlook for the European low fare airline industry? Delimitation As the thesis will look into the market for short-haul flights in Europe, it will only involve the Economic Profile of the Airline Industry The economic environment of the airline industry is a difficult one in which to operate. The industry is faced with stiff competition, high fixed costs, low differentiation, easy availability of substitutes and low cost of Industry Overview The airline industry is a large and growing the past years, air travel has been growing by 6% a year and scheduled airlines carried more than 1 billion passengers in The airline industry involves large capital requirements. For example, the requirements for aircraft, close monitor by the government regulations, competition from other tourist transport and

One of the earliest pioneers of e-commerce in the world was American Airlines, which developed the Sabre computer-reservation system to track seat availability across the hundreds of flights that it operated daily.

It did this almost 45 years ago! These have since evolved into GDS Global Distribution Systemswhich have consolidated information from airlines across the globe and in the process brought airlines, agents and consumers together in one big online marketplace.

These have expanded to include ancillary services such as hotel reservations and car rentals, thus providing customers with more convenience and value-for-money while at the same time helping airlines to improve efficiency and generate extra income.

During the s, American Airlines was faced with the problem of handling passenger numbers that were too great for the simple manual techniques used at the time — something like 26, per day. After five years of collaboration with IBM, they launched the Sabre automated reservation system, which decreased the average time of booking a reservation from 45 minutes to three seconds.

An evolution of the Sabre system is still in use today, and at the turn of the 21st Century was handling something like 12 million transactions per day.

Airline deregulation - Wikipedia

American Airlines continued to build on their lead in this field, and by the early 90s were the first major airline to introduce discounted fares for travellers who could be flexible with their requirements — all made possible by e-commerce technology. American Airlines were quick to capitalise on the potential of the Internet, which would be a vital step in gaining a march over their competitors.

But more tellingly, reservations for air travel increased six fold. The table below shows the results of a somewhat old study into the number of online bookings in the US airline industry over a five-year period around the turn of the century.

Online Bookings of Air Tickets Shon et al, It can clearly be seen that the trend towards online sales is increasing, and so is the amount of sales dollars or Pounds spent on these transactions. More useful statistics about the importance of the air-travel sector can be found in the results of a Spanish study into the impact of e-commerce on the travel industry.

The table below shows that four of the top five e-commerce websites are travel based. A survey by Barclaycard points that an increasing number of people prefer to use on-line check-in systems, including the latest mobile-phone based solutions, to check in and complete other formalities for their flights.

By tailoring distribution methods to market needs, the solutions provided by lastminute. Customers can provide additional specifications, like chosen airlines, and these are then coupled with car rental packages or deals on hotel rooms.

The customer thinks he is getting a good deal which in fact he is, considering the cost he would pay to purchase all the services independently but this also allows the supplier to make additional revenue from the added value of these bolt-on packages.Strategic Management of Wal-Mart - Introduction Wal-Mart Stores Inc.

is in the discount, variety stores industry. It was founded in , Bentonville in Arkansas which is also the headquarters of Wal-Mart. Wal-Mart operates locally as well as worldwide.

· Global Market • Airlines operang more than 23, aircra, providing service to over airports. •  · Also, the airline industry as a whole is vulnerable to economic cycles and big swings in bottom-line performance.

Global Airline Industry Program

If the consumers do not have the money to spend due to an economic slow down, airlines take a major hit in filling 8 Southwest Progress. Latest news, expert advice and information on money. Pensions, property and more. Published: Fri, 23 Jun 1. Who is/are currently the brand’s target market(s) and other important publics in the UK?

Profile these groups in as much detail as you can, given word-count restrictions.

Economic profile the airline industry essay

An Economic Profile Of The Airline Industry The purpose of this paper is to give an overview of the airline industry from different perspectives. The airline industry is the most international business that

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