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The Airline Industry in Europe - Report Example

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This report "The Airline Industry in Europe" outlines the brief history and challenges of the airline industry in Europe as well as its dynamics and trends. One of the significant factors which have been the driving force of the airline industry is technology…
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The Airline Industry in Europe
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Download file to see previous pages The European airline industry is dynamic as it changes its trends according to the general European economy. Starting from the year 1950 till 1960, the airline industry experienced a consistent annual growth of approximately 15 %. Later on, in the 80s and 90s, the airline industry consistently displayed annual growth ranging from 5 % to 6 %. The sharp decline in the annual growth rate happened due to several reasons; deregulation being one of them. With the introduction of deregulation, the airline industry experienced flexibility in the airfare values. As a consequence, the airfares saw a dip in its values by raising the air traffic.
In some countries, the Government regulates the airline industry. Even in the countries where the airline industry is privatized, it is required to comply with several norms and regulations laid down by the Government. All these norms have been established after taking into account consumer safety, political and economic conditions. According to the industry trends, it had been noticed that during the period 2000 to 2002, the airline industry was enjoying a profit of 6 % (Economywatch, “Airline Industry”).
The sector has seen several changes in both supply and demand sides. The driving forces governing the recent changes depend mainly on political, economic, social, technological, environmental, and legal forces. “The industry has evolved from a system of long-established state-owned carriers operating in a regulated market to a dynamic, free-market industry.” (Cento, “Introduction”) Until deregulation, few airlines used to fly in the European routes, and the airfares were regulated by state bilateral agreements. The process of deregulation and consequent privatization has considerably changed the industry.
The European deregulation initiative started in 1988 and it came into force in the year 1997. ...Download file to see next pagesRead More
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