Airline Industry Analysis 3

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The World Airline Industry
A European Perspective
(Case Study)

MCS-M-160
International Strategy

Student Name: Siyuan Li
Student ID: 2800712
Unit Coordinator: Robin John

Question 1
Through PESTEL analysis, identify the major external environmental drives influencing the airline industry. Since the end of the case (2003), to what extent have these driving force changed?

Question 4
Analysis the business model of the low cost airline, discuss their competitive strategies, and their future prospect in the Europe airline industry?

Contents

Introduction…………………………………………..4

PESTEL Analysis…………………………………….5

Future Development on

Airline Industry ……………………………………..8

Business Model of
Low Cost Airline…………………………………….9

Competitive Strategy………………………………..10

Future Prospects for
European Airline Industry………………………….11

Conclusion……………………………………………13

Bibliography…………………………………………14

Introduction

Airline is a large and growing industry, and it is also the most fiercely competitive sector. It facilitates international trade, world economy growth, tourism and international investment. Therefore it becomes one of the major industries in the world. However, airline as a fast growing industry, which has significant relevance with external environment and could directly affect the profitability and operation. PESTEL analysis gives a certain overview of the different Macro-Environmental factors that the company has to take into consideration (Wikipedia 2005). This assignment will through PESTEL analysis to point out the major external environment drivers influencing airline industry and explain the future change of these driving forces.

World airline industry is divided into major and low cost airline, either in US or in Europe. However the business models for both are radically different. This assignment also will focus on low cost airline and analyse the business model, competitive strategies,

Bibliography: John, R. Cox, H. Grimwade, N& Letto-Gillies, G. 1997 Global Business Strategy. London. International Thomsion Business Press. P179 James Doran, 2008 New York, Gardians Fuel costs kill off a US airline every week MERCER Management Consulting, 2002. Impact of Low Cost Airlines – Summary of Mercer Study Porter, M Porter, M. E. 1996. What is strategy? Harvard Business Review, November-December, 61-78 Rigas Doganis, The Airline Business in the Twenty-first century, London Thomas, G. 2005. To Frill or Not to Frill. Air Transport World, October, 34 Ben Russell, The Independent Political Correspondent, 2007 Wikipedia, 2005 Pest Analysis. http://en.wikipedia.org/wiki/PEST_analysis (access date 22/10/08)