The Economic and Strategic Issues of Airlines in a Regulated World
Airline is a highly regulated industry in every country. Domestic air-routes are preserved for the domestic airlines only. This regulatory constraint effects success of an airline a lot.
In the scenario, technological advancement in the airline industry can not provide desired benefits to the airline company because it can not compete effectively with other. The reason is that there is no feeder traffic from other country.
Past Two Decades of Airline Industry:
The Asia Pacific Region and Singapore Airlines
The region is important for commercial air travel. The industry of the region has steady growth and economy is growing rapidly.
SIA is born on 1 May 1947 with an air craft having capacity of five passengers and tri-weekly flights.
It had expanded its operation with comet jets in 1962.
After passing long way of severe competition, it is well-known as symbol of international service. It celebrated its golden jubilee anniversary on 1 May 1997.
The Influence of External Factors and Past Events:
The Chicago Convention was signed in 1944, failure of which results in various bilateral Air Service Agreements. The negotiation was made on various issues.
In a country which has a single airline, the negotiation is biased towards benefits os national airlines. Open skies Agreements
Some Recent technological developments are: Electronic booking system, Yield management system, Modern planes, Flight entertainment, and internet booking system.
Sticks and pay disputes are extremely costly.
Unbalanced Distribution of Traffic
Singapore located at centre of Asia pacific.
Out of 1000 airports in 182 countries, 45% of air travel is made in 25 airports of 17 countries. 50% of international cargo is handled in 15 airports of 12 countries.
Unfair exercise over traffic