COMPETITION AND INDUSTRY ANALYSIS: AIRLINE INDUSTRY

INTRODUCTION

Airline industry in UK carries 129 million passengers annually and 1.1 million of cargo is transported through air per year. The airline industry in UK has given employment to 234,000 people. Contribution of the industry to the national income of UK is £ 18.4 billion. It also contributes £ 7.8 billion to the exchequer in taxation. Tax paid by the airlines industry is more than the average national tax in UK. Departing passengers pay Air Passenger Duty (APD) which works as a trade barrier to the development of the airline industry of UK as well as to the economy of UK (BATA, 2012).SCOPE

There is a big scope in the airline industry in UK. Nine out of ten flights from the airport of UK are international. Air transport is public transport and is beneficial for the economic development of UK. Airline industry is also helpful in the development of other businesses as it connects people internationally and also attracts the investments inwards. Statistics shows that 40 % of the trade of UK with non – EU nations are done through air transportation. All these things indicate that there is big scope of further development in the aviation industry (Stanford, n.d.).

GROWTH

Airline industry is large and growing industry. If we take international statistics we find that in last decade the industry grew at a rate of 7 % per annum. International air transport association (IATA) has forecasted that the airline industry will grow at a rate of 6.6 % per annum annually. The airline industry carried 1.5 billion people internationally last year. While looking at the facts of UK we found that UK becomes a destination for the visitors from overseas and people who are coming to UK per year contributes £ 14 billion to the national income of UK. People who are travelling to the UK for non business purpose i.e. to meet friends and relatives are increasing and make the growth of aviation industry in UK stronger (Stanford, n.d.).KEY PLAYERS AND MARKET SHARE

There are many players in the aviation industry of UK. Name of some of them are given below with a brief description.

1. British Airways: This is the main airline of UK which can meet all the demand of the passengers. It provides better facilities as well as competitive prices. Online booking is also available for British Airways. Website: www.britishairways.com
2. VLM Airlines: It focuses mainly to the regional locations e.g. Amsterdam, Brussels, Antwerp and Luxembourg etc. Website of the company is www.flyvlm.com
3. Jet2.Com: It is a low cost airline which mainly goes to the major European countries. It has also cheap flights to Amsterdam, Paris, and Prague etc. Website: www.jet2.com
4. Virgin Atlantic Airways: It is another active airline company in UK which has made online booking very easy for the passengers. Website: www.virgin-atlantic.comApart from above the other players in the market are Monarch Airlines, Ryan Air, Easy Jet, Astraeus, Aer Lingus, bmi British Midland, Aurigny, Brussels Airlines, Eastern Airways and Qantas etc. All these companies have their market share according to their potential. Leading companies in the market share are Flybe 29.8 %, British Airways 19.9 %, Easy Jet 19.3 %, BMI 8 %, and Ryan Air 7.26 %. The market share of Easy Jet has increased as the company has acquired GB Airways for £ 104 million (CAPA, 2010). Market share of all these companies are given with the help of a pie chart below:

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