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The UK Airports Industry - Term Paper Example

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The objective of the paper is to present a competitive analysis of the UK Airport Industry. The demand and supply conditions of the airport sector of UK is analyzed in terms of location and concentration. Entry and exit barriers help in determining industry attractiveness and future trends. …
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The UK Airports Industry
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Download file to see previous pages The UK has a history of pre-developed commercial airports located near ex-military airfields. As such, the number of airports in the UK has grown substantially over the years. Majority of these airports are for commercial operations. Most of these airports are located near high population regions such as, North West and North East England, which also lessens the distance between them. Concentration and location of UK airports also indicate easy access to the majority of the population. For instance, almost 70 percent of the total UK population can reach the airport within one hour. Also, the average gap between two to three airports across the UK is 2 hours. Industry experts suggest that these airports might grow or shrink in the future. At the same time, airport trends suggest otherwise. For instance, Durham Airport had served around 0.2 million people in 2010, compared to 0.9 million in 2006 (Marchant, 2007). Hence, it can be said that while the number of airports has increased significantly, customers count have gradually declined. These can be attributed to the increased competition due to close proximity, more choices among passengers, ease of travel and services offered by different airports. There are multiple ownership structures in case of UK airports, including wholly private, public-private, local government and mixed ownership. An example of a private-public partnership is Durham Airport. Cross-ownership can be seen in Bristol Airport, where Ontario teachers hold 49 percent of total share through various pension plan schemes (Marchant, 2007).  As noted above, the UK Airport Industry is characterized by highly concentrated airports, which heightens competition. However, the nature of services offered by these neighboring airports is different, creating certain barriers to direct competition. For instance, the services offered by an international airport will be fairly distinct as well as more equipped compared to those of domestic airports. Nevertheless, factors governing or controlling the UK Airport Industry have evolved over time.  ...Download file to see next pagesRead More
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