The Airline Industry and its Management Challenges

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“What is the biggest managerial challenge facing the airline industry in the 21st century?”

The biggest managerial challenge facing the airline industry in the 21st century is the competition between short hauled flights and other nodes of transportation. This is an issue that is developing mainly in places such as China, USA, and Europe. Air travel is a huge form of transportation in China. With over 33 certified Airlines, and 20 of them being domestic, the Chinese rely heavily on air travel in order to reach destinations throughout the nation. However, China also became home to the world’s longest high speed railway network, expected to cover a total distance of _____ after completion. This is certainly a managerial challenge that is currently facing the Chinese airline industry. Regular commuters are more likely to consider high speed train over air travel for numerous reasons. The ticket prices are more affordable in comparison to air fares, while still providing facilities and services that are similar in quality. Airports can be considered a hassle due to the extreme security procedures, especially when travelling short distances. This issue can influence passengers to take the “stress-free” route of high-speed rail. For example: it is predicted that 60 percent of China’s journeys of less than 800km, will be carried out by high speed rail, following the completion of the railway network in 2020. Therefore posing a major threat to short hauled flights, but having very little impact on long-haul flights over 800km. In fact, the integration of air travel along with high speed rail services will result beneficial for major airports (for example Hong Kong, Shanghai, and Beijing International Airport), because the profit margins of domestic charges are much lower than for international flights. Consequently, this would cause further competition for the smaller air ports and short hauled flights, as most of their business is domestic. The opening of the latest...
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