How Can Ryanair Maintain Its Dominance in the European Low-Cost Airline Market - Dissertation Example

The airline industry has always been a large and significant industry with a considerable growth rate. The industry is dynamic in nature considering the fact that its trends change in accordance with the economic condition of Europe. The profitability of the airlines is strongly tied to economic trade and growth (Stanford, n.d.). From the year 1950, till 1960, the airline industry has experienced an average continual growth of around 15 %. In the later years, the industry has experienced a growth of around 5 % to 6 %.

Several reasons were responsible for this sharp decline in the growth rate. As the ‘deregulation’ was introduced in the airline, the competition has become more intensified with more flexibility in the airfare values. As a result, with the increase or decrease in airfares, air traffic has also changed significantly (EconomyWatch, n.d.). As per the industry trends, during the period of 2000 -2002, the airline industry enjoyed a profit of around 6 %. However, in recent years, due to the economic downturn, airline companies have experienced a considerable slowdown in the number of passengers.

In the European countries, there are a number of norms and conditions which govern the airline industry, which is laid by the government considering the political, economic environments as well as safety of the passengers in the industry. Since its inception, the airline industry has gone through several amendments both on the supply as well as demand side. Factors like political, economic, social, technological, environmental, and legal forces. The industry has come a long way from state-owned air carriers to a dynamic and free-market industry.

In the early years, airlines were regulated by state bilateral agreements. However, the deregulation process and the privatization process have changed the airline industry in a significant way. In the year 1997, European deregulation has come into force.