Analyze and Evaluate Attempts by Air France-KLM to Develop a Low-Cost Airline Across Europe
Analyse and evaluate attempts by Air France-KLM to develop a low-cost airline across Europe.
Abstract
Airline is an important industrial in European economy, with the liberalization and deregulation of European market, it is filled by a number of small-sized and large-sized airlines, recently, the model of low cost carriers is widely spread from America to Europe, the success attracts rivals to adjust business models to enter this market. Air France-KLM also attempts to adopt this strategy. This essay will use PESTEL and stakeholder theory, as well as corporate social responsibility (CSR) concept to analyze general environment and specific environment including customers and suppliers. Main ideas are Air France-KLM (FK) should concern CSR behavior especially including social and environmental perspective to conduct low-cost strategy rather than only consider economic perspective which is short-term financial performance, because it could not bring a sustainable development for company. Furthermore, FK should have operational resilience and strategic resilience under the uncertainty of dynamic environment, and integrate CSR as a organization culture which will become a competitive advantage. The general environment analysis could provide reference for other companies, and analysis of stakeholder theory and CSR concept will give a guidance for sustainable development of companies.
Air France-KLM is owned by French airline (Air France) and Dutch airline (KLM). It is the largest airline company in the world, while the profit is continually decreasing in Europe within recent 5 years (Market Line 2014). It is positively seeking a path to maintain competitive position in European airline market. Two largest competitors are Ryanair and EasyJet in Europe who operate low-cost strategy which learn from Southwest in US, and they rapidly capture market share. Air France-KLM is planning to use same strategy to compete with them.
Environment is a significant indicator
Abstract
Airline is an important industrial in European economy, with the liberalization and deregulation of European market, it is filled by a number of small-sized and large-sized airlines, recently, the model of low cost carriers is widely spread from America to Europe, the success attracts rivals to adjust business models to enter this market. Air France-KLM also attempts to adopt this strategy. This essay will use PESTEL and stakeholder theory, as well as corporate social responsibility (CSR) concept to analyze general environment and specific environment including customers and suppliers. Main ideas are Air France-KLM (FK) should concern CSR behavior especially including social and environmental perspective to conduct low-cost strategy rather than only consider economic perspective which is short-term financial performance, because it could not bring a sustainable development for company. Furthermore, FK should have operational resilience and strategic resilience under the uncertainty of dynamic environment, and integrate CSR as a organization culture which will become a competitive advantage. The general environment analysis could provide reference for other companies, and analysis of stakeholder theory and CSR concept will give a guidance for sustainable development of companies.
Air France-KLM is owned by French airline (Air France) and Dutch airline (KLM). It is the largest airline company in the world, while the profit is continually decreasing in Europe within recent 5 years (Market Line 2014). It is positively seeking a path to maintain competitive position in European airline market. Two largest competitors are Ryanair and EasyJet in Europe who operate low-cost strategy which learn from Southwest in US, and they rapidly capture market share. Air France-KLM is planning to use same strategy to compete with them.
Environment is a significant indicator
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