The European Airline Industry

Paper Summary:

This paper explains that deregulation of the airline industry is one major step in attempting to have a free and competitive market, one which benefits customers, airlines, governments, and the community at large. The author points out that the liberalization of the airline industry has resulted in the birth of low-cost scheduled airlines, primarily aimed at providing cheap alternate modes of transport for the average citizen, thus increasing passenger traffic. The paper relates that one of the results of deregulation has been the privatization of airports, which were traditionally operated by the government; Heathrow, Gatwick, and Stansted airports in the United Kingdom are some examples of airports totally under private management.

Table of Contents
The European Airline Market
Deregulation of the European Airline Industry
Low-Cost Airlines
Hub and Spoke System
Airlines Consolidation
Privatization of Airports
Sustainable Aviation

From the Paper:

"European airlines are limited to a single market and thus often have to depend on a single hub for intercontinental services. This means that the companies cannot offer routes as they wish and may lose out on profitable opportunities. On the other hand, an US airline can have several hubs from where they can offer intercontinental services to several locations based on alliances with other airlines. Post de-regulation, airlines have the liberty to fix and revise fares as they wish. It could be seen that close to 85 percent of the commuters travel on reduced fares within the Union. On some routes, the fares are still higher and this deprives passengers of low cost options. Another drawback is the duplication of flight services on busy routes and lower size of aircrafts to increase frequency. These initiatives have increased the fuel consumption per passenger, raising energy conservation and environmental issues. Critics point out that the short-term and profits oriented approach of the private airlines is the main reason for this situation and governmental intervention is therefore required to stem further deterioration."

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• Case Study # 106353 : "Human Resources in the Airlines Industry"

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