An evaluation of the attractiveness of the budget airline sector

The concept started in the 70s by the American domestic carrier Southwest as a way to offer cheap airfares to consumers, since then more low-cost airlines started to proliferate gobbling market share to the point that even major carriers had to establish their own subsidiaries that offered lower fares to regain lost customers. The impact of low-cost carriers to the aviation industry has been tremendous. The deep market penetration of low-cost airlines caused conventional carriers to cut flights, close hubs and even abandon service to some cities. In Asia and the Middle East the low fare sector has dramatically grown in the last decade and there are no signs that the expansion would be curtailed.

An evaluation of the attractiveness of the budget airline sector

The Internet Industry Few inventions have changed how people live and experience the world as much as the invention of the airplane.

During both World Wars, government subsidies and demands for new airplanes vastly improved techniques for their design and construction. Over time, air travel has become so commonplace that it would be hard to imagine life without it.

The airline industry, therefore, certainly has progressed. It has also altered the way in which people live and conduct business by shortening travel time and altering our concept of distance, making it possible for us to visit and conduct business in places once considered remote.

An evaluation of the attractiveness of the budget airline sector

The airline industry exists in an intensely competitive market. In recent years, there has been an industry-wide shakedown, which will have far-reaching effects on the industry's trend towards expanding domestic and international services. In the past, the airline industry was at least partly government owned.

This is still true in many countries, but in the U. The airline industry can be separated into four categories by the U. Department of Transportation DOT: Cargo - These are airlines generally transport goods.

Airport capacity, route structures, technology and costs to lease or buy the physical aircraft are significant in the airline industry. Other large issues are: Weather - Weather is variable and unpredictable.

Extreme heat, cold, fog and snow can shut down airports and cancel flights, which costs an airline money. Fuel makes up a significant portion of an airline's total costs, although efficiency among different carriers can vary widely.

Short haul airlines typically get lower fuel efficiency because take-offs and landings consume high amounts of jet fuel.

The attractiveness, or potential profitability, of the airline industry as a whole in and the budget sector in particular, should first be considered in order to investigate the issues Stelios Haji-Ioannou was facing when entering the industry/5(6). In Ryanair’s case it determines if the European budget airline industry is an attractive one. (see: Figure A6) 1) The Threat of Entry The low fares industry, especially, with established leading players as Ryanair, is really hard to enter. THE ATTRACTIVENESS OF THE BUDGET AIRLINE SECTOR COMPARING MEASURES OF ATTRACTIVENESS IN THE BUDGET SECTOR Analysis of Demand and Competition Financial Analysis Industry Specific Modelling SUMMARY PART B EASYJET'S STRATEGY DELIBERATE V. EMERGENT STRATEGY /5(4).

An estimate of the amount of money already received for passenger ticket sales and cargo transportation that is yet to be provided. It is important to find out this figure so you can remove it from quoted revenue figures unless they specifically state that ATL was excluded.

Low Cost Carriers in the Aviation Industry

This indicator, compiled monthly by the Air Transport Association ATAmeasures the percentage of available seating capacity that is filled with passengers. Analysts state that once the airline load factor exceeds its break-even point, then more and more revenue will trickle down to the bottom line.

Keep in mind that during holidays and summer vacations load factor can be significantly higher, therefore, it is important to compare the figures against the same period from the previous year.

Analyst Insight Airlines also earn revenue from transporting cargo, selling frequent flier miles to other companies and up-selling in flight services.

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But the largest proportion of revenue is derived from regular and business passengers.Qatar airways, Singapore airlines, air India, jet airways, and gulf air as its competitors. Statement Of The Problem Biman Bangladesh being a relatively new airline .

A Checklist for Developing and Evaluating Evaluation Budgets 3 IV. Travel. Costs for travel may include anticipated expenditures for administrative activities. If borrowing is cheap, then the likelihood of more airliners entering the industry is higher.

The more new airlines that enter the market, the more saturated it becomes for everyone. 6. An industry analysis of the European airline industry Threat of new entrants 47 Airport slot availability 47 Predatory pricing as a barrier to entry 48 Frequent-flyer programmes 52 Economies of scale 52 Empirical study on barriers to entry 53 THE ATTRACTIVENESS OF THE BUDGET AIRLINE SECTOR COMPARING MEASURES OF ATTRACTIVENESS IN THE BUDGET SECTOR Analysis of Demand and Competition Financial Analysis Industry Specific Modelling SUMMARY PART B EASYJET'S STRATEGY DELIBERATE V.

An evaluation of the attractiveness of the budget airline sector

EMERGENT STRATEGY /5(4). If borrowing is cheap, then the likelihood of more airliners entering the industry is higher. The more new airlines that enter the market, the more saturated it becomes for everyone.

Brand name recognition and frequent fliers point also play a role in the airline industry.

Competitive Environment of the Airline Industry