North American and European Airline Industry Essay -- Business Managem

northeastward American and European Airline IndustryINTRODUCTIONThe Airline effort is one of the instaurations largest industriesgenerating over $300 billion in revenues in 2001 alone andadditionally has the second highest industrial growth rate, ulteriorly thecomputer manufacture, with typical growth rates of 3-5% per annum overthe last 20 long time (Humphreys, 2003 BA feature book, 2002).For the purpose of this assignment, freight/cargo air passage activitieswill not be considered as freight travel consists of provided 2 % of total air passage activity (see figure 3.1 and app expiryix 1) (BA detail book, 2002,ICAO, 2003). Furthermore, due to the nature of the airline assiduityand the Asian marketplace macrocosm a lot smaller and internally focused, wewill concentrate on the North American and European markets whichbetween them, account for 65% of the market (see figure 3.1 andappendix 1) (ICAO, 2003). Section 1The main forces shaping the airline sectors global business environment.The past twain years has seen an unprecedented number of airlines,worldwide, filing for bankruptcy and many more would give followedsuit had it not been for government intervention (Economist, 2002a).The main factors leading to their destruction and to the problems currentlyfaced by the airline industry in general, stupefy their roots in theexisting economic and political climate, which according to IATA (2002) reside to remain challenging.1.1 Economic Forces facing the airline industrySince the performance/ advantageousness of the airline industry is closelyconnected to the economic cycle (BA Fact Book, 2002), the importanceof the global economic environment and the impact that it has on theindustry cannot be underestimated (see figure 1.1).This is evident from the performance of the industry during the late1990s as profitability soared on the back of a buoyant world economy(characterised by the hype generated by the technological revolution criminal record levels of corporate activity etc) which fuelled demand for airtravel. It is not surprising that the subsequent slump in air travelwhich began in the USA towards the end of 2000 and slowly spread toother parts of the world (Economist, 2001), corresponded to a alterin the economic forces as the knock on effects of the US economicslowdown infiltrated the global economy.One of the main consequences of the g... ... flights and theintroduction of humanness Traveller Plus a new business and economyproduct. These two markets of business and economy are perceived to bethe most demanding and bankable in the future and therefore BA haveadditionally positioned itself rise up to take advantage of thesedevelopments (Economist, 2002b BA Fact book, 2002).Therefore, the penetration and consolidation of markets, personifymanagement and refocusing of culture and infrastructure assisted bythe coaction available within its OneWorld Alliance are placingBA in a healthier position to survive the turbulenc e that lies ahead.FINAL THOUGHTSThe future of BA and that of many other airlines is going to depend onthe highly volatile political and economic situation facing the worldas seen in section 1. War in Iraq is creating an increased genius ofpanic in the worlds industries and therefore, an accurate forecast asto the airline industry development is somewhat convoluted and complexdue to the overwhelming sense of uncertainty that prevails. Therefore,BAs future positioning and its subsequent succeeder within this sectoris going to be decidedly susceptible to the worlds events.