Compare the European airline industry at the beginning and at the end of the 1990s. What changed? How did airline companies react to these changes?

Question

What will be an ideal response?

Answer 1

? What changed:
o Whereas long-haul flights have been protected from the new entrants’
business model, the market for short-haul flights is highly competitive
regarding price, destinations and frequency between destinations
o Competition and rivalry changed in the industry as traditionally protected
markets were now open to everybody
o Buying power of customers: customers could now compare prices
? Reaction of airline companies:
o This part of the question allows discussion of developments in the airline
industry until today. In almost every region of the world (Asia, Australia,
Europe, North and South America), established airline companies sooner
or later adopted a low-cost business model that allows them to be present
and compete in short-haul and long-haul flights. This is mainly due to
society’s increasing travel needs.
o An interesting aspect for students is to comment on recent technological
changes (i.e. internet, voice-over IP communication, and video
conferencing) and how these have and will impact future travel needs in
the low-cost and premium air travel segment.