Economics Airline Industry

Topics: British Airways, Airline, Economics Pages: 7 (2602 words) Published: December 18, 2011
Part 1 The Characteristics Of The Airline Industry Preface Introduction The Primary Characteristics Competition Within The Airline Industry The Secondary Characteristics – The Tertiary and Quaternary Characteristics – Part 2 PESTEL Of The Airline Industry Conclusion References PART 1 The Characteristics Of The Airline Industry Preface Economics or Managing In The Global Environment, a subject everyone needs to be familiar with and most believe or think that they are, but at the end of the day, very few are competent and understand it’s deep meaning, intricacies and implications. These implications and meanings are for the Government, the people, the economy as well as for the observer ( a person observing the economy or industry in a foreign country ). I do have an economic background and therefore I understand the intricacies of all this and that a layman may find the perusal of economic charts or data statements confusing or ambiguous. Anyway that’s beyond the boundaries of this assignment. Having been given a free hand at choosing a business sector of my choice for this assignment and going on to highlight its key economic characteristics, the effect of the same on the sectoral development and paying particular attention to any global influences on this development, I shortlisted two sectors both from the leisure industry – hotels and aviation. Being deeply knowledgeable about both and having a keen interest on the subject made sense to me. For the purpose of this examined coursework assignment, we shall focus purely upon the aviation industry. The ECA guidance document states to mention, the geographical domain that you shall cover in this report. I am looking at the aviation industry on a world wide platform. I’m not looking at the United Kingdom or India or China specifically. Introduction – Not many inventions have changed how people live and experience the world as much as the invention of the airplane. It was the Wright brothers, Orville and Wilbur who on 17 th December 1903 changed the manner in which the world would travel forever. During both World Wars, government subsidies and demands for new airplanes vastly improved techniques for their design and construction. Following the World War II, the first commercial airplane routes were set up in Europe. Over time, air travel has become so commonplace that it would be hard to imagine life without it. The airline industry, therefore, certainly has progressed. It has also altered the way in which people live and conduct business by shortening travel time and altering our concept of distance, making it possible for us to visit and conduct business in places once considered remote [1] Air travel remains a large as well as growing industry. It facilitates the most vital process of economic growth, world trade ( free or restricted as the case might be ), international investment and tourism and is therefore key to the globalization taking place in many other industries. It makes boundaries smaller and shrinks national borders to almost make them seem non-existent from the sky at 35000 feet. The Primary Characteristics – Everyday thousands of aircraft go into the sky and come back onto terra firma. It’s like a process, it keeps repeating itself, thankfully successfully. But is it that simple. Is it only about passengers boarding, take off and being served an average meal with pride, landing, taxi and disembarking, immigration and collecting their baggage. No there’s a lot more to it. The key characteristics of the airline industry are several. There are micro as well as macro economic factors that affect the industry. It’s an industry that is quick to be hit by global events and slow to recover from them. The key economic characteristics of the airline industry are as follows The main feature of the airline industry is that it is not a monopoly or monopolistic competition but operates as an oligopoly. The reasons for the airline industry being an oligopoly according to a...
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