European Budget Airlines Case Study

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European Budget Airlines Case Study

European Budget Airlines

 

Type of Industry

Aviation

Headquarters

All over Europe

Sales/Revenue

$22.5bn approx.

Area Served

Across Europe

Number of Stores

NA

Competition

Air Lingus, Air Baltic, Air Italy, Blue Air, City Jet, Condor, Flybe, Wizz Air

USP

Low cost flights

Target Group

People of all ages striving for accessing low budget flights for travel and business purposes

Products

Flights

Website

NA

European Budget Airlines Case Study Introduction

The market of budget airlines should be considered as an emerging one. This holds true for the budge airlines in Europe. Amid highly competitive expensive airlines operating in the European market, the growth and prosperity of budge European airlines deserves special mention. The primary objective of conducting the European budget airlines case study is to properly evaluate how budget airlines have succeeded in drawing the attention of millions of Europeans and how they have been able to sustain their growth, expansion and development. A thorough SWOT and PESTLE analysis is essential in order to strengthen the European budget airlines case study.

European Budget Airlines SWOT Analysis

Strengths

One of the primary strengths of European budget airlines, as revealed by the European budget airlines case study, is that, they have lower unit cost that impacts largely upon their cost-efficiency. Owing to the low unit cost, it has become quite easier for European budget airlines to offer lower fares to their customers. Such offering has added to the strength of the business of European budget airlines. Moreover, as revealed by the European budget airlines case study, low fare has contributed to the growth and expansion of the customer databases of many European budget airline companies. Besides, it has been observed that owing to the cost-effective approach, European budget airlines have been able to maintain a strong market hold, holding on to a market share that should be deemed higher than their high budget counterparts.

Weaknesses

The European budget airlines case study has revealed that, seasonal earning is one of the major weaknesses of European budget airlines. This means that European budget airlines do not have proper access to perennial earning, and this again adds to their weaknesses from the financial perspective. Moreover, it has been observed that, due to the need of maintain a lower fare, majority of European budget airlines have to resort to the process of operating with lower frequencies than their high-budgeted competitors. Moreover, the European budget airlines case study has revealed that, for the sake of maintaining a low budget, it often becomes difficult for European budget airlines to offer quality services that are provided by high-budgeted European airline companies.

Opportunities

The emerging markets of Central and Eastern Europe provide growth opportunities to European budget airlines. The European budget airline case study has revealed that the growing demand for budget airlines in Central and Eastern Europe has provided opportunities to European budget airlines to spread their wings in the concerned emerging European markets. Moreover, it has been observed that European budget airlines have got ancillary growth opportunities. In this respect, it has to be noted that implementation of loyalty programs and policies, alluring more customers, can eventually sustain the profitability of European budget airlines in the long-run. Besides, as the European budget airlines case study reveals, liberalization of the European economy will also allow growth opportunities to the European budget airlines in particular.

Threats

External market events like inflation can be considered a threat to the overall business of European budget airlines. Moreover, as revealed by the European budget airlines case study, growth of fierce completion in the European budget airline industry can also pose serious threats to the smooth operating of many European budget airlines in the future. Also, improvement is service offering on the part of high-budgeted European airlines can again complicate the business rivalry for the European budget airlines in the long-run.

European Budget Airlines PESTLE Analysis

Political Environment

The unstable political environment of Europe can be detrimental to the long-term growth and development of European budget airlines. The European budget airlines case study has revealed that risk of military invasion and undue political skirmishes can result in closure of many air routes, and this can be a risky proposition for the business of many budget airlines operating in Europe. Moreover, it must be noted that high level of corruption at the levels of regulation in consumer services sector can also negatively impact on the businesses of majority of European budget airline companies. Unrestrained bureaucracy and undue intervention of many European governments in the business of travel and leisure industry can again put the profitability of many European budget airlines at stake.

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Economic Environment

Unstable economic environment of Europe could play a detrimental role impacting the profitability of budget European airlines in a thoroughly negative manner. Excessive market interference of majority of European governments can also jeopardize the businesses of many European budget airlines in the long-run. Moreover, stringent (and often oppressive) trade and tariff regulations have the potential to diminish the growth opportunities for European budget airlines both in the short- and long-run. Besides, slow economic growth rate in different European markets can also add to the problems faced by majority of European budget airlines.

Social/Socio-Cultural Environment

The skill levels of the demographic can come to the aid of European budget airlines in terms of ensuring their business growth and expansion in the future. The notable cultural shift in European societies towards growing affection for budget air travels should also be considered an advantage for the European budget airlines in terms of business expansion and profitability. Moreover, as revealed by the European budget airlines case study, the scope of properly managing a diversified workforce has allowed many budget airline companies in Europe to retain and nurture talents. This may add to the business strengths of such airline companies in the future.

Technological Environment

The affinity of European budget airlines to introduce new technologies in their business process can ensure future growth and business prosperity. Moreover, it has to be noted that following the example of technology implementation carried on by their high-budgeted counterparts, European budget airlines can eventually incorporate innovative technologies to improve customer service and customer experience (leading to procurement of new customers both in the short- and long-run).

Legal Environment

Stringent legal framework and strict contract enforcement policies often put European budget airlines in trouble. Moreover, the uncompromising policies of intellectual property protection though providing protection to European budget airlines in the short run can eventually put the business growth of several key players within the industry in the long run at stake. Moreover, stringent anti-trust laws and their quite-often wrong implementations have also put the prosperity of some of the budget airlines in Europe in the past. Besides, huge taxations have often compelled many European budget airlines to become temporarily non-complaint with laws of the land.

Environmental Factors

The compulsion to alleviate their carbon footprint has forced my European budget airlines to minimize the frequency of their flight operations. This has, on the one hand, contributed to a greener economy, and, on the other hand, hampered the business prospects of many European budget airline companies.

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