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UK Airline Industry May 6, 2011 Outline: Introduction……………………………………………………………………….…………… 3 UK Airline Industry Overview…………………………………………………………….……3 Macro Environmental Analysis……………………
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Portfolio
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Download file to see previous pages While such competition among scheduled airlines and low cost carriers (LCCs) is rather indirect, the travel preferences of passengers are what matters at the end. The global financial meltdown changed people's travel habits as they looked for cheaper alternatives to their previous destinations. Have the needs of travelers diverged or changed dramatically? Do they prefer cheaper prices or comfort and good service during the flight? Today it becomes vitally important to understand the consumers’ needs, requirements and expectations from the contemporary air travel services, which should become an integral part of airlines’ future strategies. UK Airline Industry Overview Recently all UK carriers, including LCCs, experience the increasing competitive threats, including potential to depress onboard loads and dilute yields, continuous and increasing pressure to reduce unit costs, need to maximize aircraft utilization, and all magnified by the global economic crisis. Though, at the same time opportunities for UK airlines include potential traffic stimulation, new markets and route access, new partnerships, and new business models. According to the research by White and Crasta (2010), there are four main purchase criteria of travelers while buying airplane tickets, including price of the ticket, convenient flight times, distance of the airport used by the airline, and brand of the airline. While all four criteria are important for travelers, the price occurred to be the most important factor among 80% of respondents while the rest 20% care more about brand name of the airline and convenient flight times. Throughout the world, British Airways is recognized as the leader in the service industry and as one of the companies which internal and external practices proved high quality service for the clients and care about the employees. Being the largest international scheduled airline of the United Kingdom, British Airways provides flights to more than 550 destinations at the most convenient times for its customers. Charts 1 and 2 in the Appendix show international versus domestic capacity share and international capacity of British Airways by region in 2011 accordingly. Macro Environmental Analysis PESTLE analysis described below will help to analyze the macro environment of the UK airline industry, including such factors as political, economic, social, technological, legal and environmental. Political Factors The current political environment in the United Kingdom is supportive to aircraft services providing loans and funds toward different social and environment projects and programs. Traditionally, many UK companies are based on trade unions, which recently increased their pressure inspiring employees’ strikes. Financial Times informed that 78.5% of BA employees voted for walkouts and strike ballots supported by trade unions as the result of news about merger between BA and Spanish airline Iberia (Groom, 2011). UK government turned their main attention toward the security issues of airplanes as the result of several accidents, which will increase the ...Download file to see next pagesRead More
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