North American and European Airline Industry Essay -- Business Managem

atomic number 7 American and European Airline IndustryINTRODUCTIONThe Airline labor is one of the balls largest industriesgenerating over $300 billion in revenues in 2001 alone andadditionally has the second highest industrial growth rate, later thecomputer pains, with typical growth rates of 3-5% per annum overthe last 20 years (Humphreys, 2003 BA point book, 2002).For the purpose of this assignment, freight/cargo air hose business activitieswill not be considered as freight travel consists of provided 2 % of totalairline activity (see figure 3.1 and app eradicateix 1) (BA accompaniment book, 2002,ICAO, 2003). Furthermore, due to the nature of the airline industryand the Asian market place organism 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 businessenvironment.Th e past cardinal years has seen an unprecedented number of airlines,worldwide, filing for bankruptcy and many more would set out followedsuit had it not been for government intervention (Economist, 2002a).The main factors leading to their death and to the problems currentlyfaced by the airline industry in general, put one over their roots in theexisting economic and political climate, which according to IATA (2002) affect to remain challenging.1.1 Economic Forces facing the airline industrySince the performance/ lucrativeness 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 point levels of corporate activity etc) which fuelled demand for airtravel. It is not surprising that the posterior 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 variegatein 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 earth Traveller Plus a new business and economyproduct. These two markets of business and economy are perceived to bethe most demanding and profitable in the future and therefore BA haveadditionally positioned itself hale to take advantage of thesedevelopments (Economist, 2002b BA Fact book, 2002).Therefore, the penetration and consolidation of markets, damagemanagement and refocusing of culture and infrastructure assisted bythe collaboration available within its OneWorld Alliance are placingBA in a healthier position to survive the turbulence that lies ahead.FINAL THOUGHTSThe future of BA and that of many other airlines is going to depend onthe highly volatilisable political and economic situation facing the worldas seen in section 1. War in Iraq is creating an increased wizard 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 achiever within this sectoris going to be decidedly susceptible to the worlds events.