Economic:
The low unemployment rate reflected a relatively high growth rate of EU, and in this situation, consumers tend to spend more heavily because of higher disposable income and greater job security. (David 2004, p.133) However, the continuously high growth rate of economy might affect the market of low-price airlines. When customers are ready to spend more money, importance will be given to the quality and convenience of the services rather than price. In such a case, low-price airlines are inferior services in the whole flight market.
Social:
The high speed trains and cars available in Europe would cause a threat for the airline industry. Also with the Increasing travelling lifestyle and business travelling very few people would really worry about the expenses.
Technological:
The technologic development and increased use of the internet has only made life easier both for the customer and the company. It reduces the distribution cost for the company. Customers can easily compare prices and make decisions based on their preferences.
Environmental:
Growth in the airlines industry is continuous, though it affects the environment in terms of noise pollution, and solid waste, waste water and greenhouse gas release. There has been a growth in the number of air travelers and the world tourism organization predicts that there will be 1.4 billion inbound and outbound tourists arriving in 2020 into Europe. Partly due to this predicted environmental pressure, it has been observed that many European based airlines in the past decade have put many resources in improving the environment.
Legal:
The EU deregulation in air industry brought a much lower entry barrier for new companies and thus intensified the competition in air transport market.
Bibliography
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John Sloman and Mark Sutcliffe, 2004, Economics for Business. Third edition. Prentice Hall.
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Routledge. 1992. The Airport Business. Mackays of Chatham PLC, Chatham, Kent
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David Jobber, Principles and practice of marketing, 4th edition, 2004.
- Thompson, Arthur A, Jr., A. J. Strickland, and John E. Gamble. Crafting and Executing Strategy: The Quest for Competitive Advantage – Concepts and Cases. Boston, et. Al (2005)
- Towards the conformity of Infrastructure policy with European Laws: The case of government aid for Ryanair, Torsten Steinrucken; Sebatian Jaenichen
- Easyjet and Ryanair flying high on Southwest Model
- The Sustainability of Ryanair; Sean D. Barret
