N832 International Hospitality And Tourism Assessment Answers

Answer:

Task 1:

Introduction

Since mid 1990s, UK has been experiencing the growth of a number of Budget Airlines. According to Bows?Larkin et al. (2016), the growth of the low cost carriers is considerably an aviation phenomenon. In this industry, the changes are slower, especially in case of the major carriers. Some of the low cost airlines like Ryanair and easyJet have undergone some of the recognizable changes in last two years for broadening the customer base. The study would specify the development of the budget airlines in UK. In other way, the growth of such budget airline has created the significant and recognizable effects on the interrelationships between the airline brands (Low and Lee 2014). It was noticed that some of the airline industries could make the significant profits by introducing the low cost carriers. On the contrary, many of the airline companies experienced failures as well. In this paper, the effectiveness of the budget airlines would be discussed. The identified success and failure experienced by the low cost carrier in UK will also be determined in this paper.

Development of the Budget Airlines within UK

History of Budget Airline

In the year of 1970, Sir Freddie Laker introduced the cheap ‘no frills’ transatlantic flights (Economist.com 2017). However, the venture failed to achieve the expected success. Nevertheless, it is important to mention that such idea influenced the airline industry to introduce the low cost carriers to make the flights affordable to the passengers (Bilotkach, Gaggero and Piga 2015). In the middle period of 1990s, UK experienced the significant growth in the developmental aspects of the budget airlines. In order to enhance the customer base, the airline companies started cutting down the fares. This strategic approach was quite challenging for the other airline companies to retain the organisational position in the competitive ground. The Europe Aviation Industry experienced the drastic changes when two airline companies started offering the lower fare prices to the passengers.

Ryanair, the Irish carrier was inspired by the Southwest Airlines in US that was offering the flying with only $10 and $20 fares. easyJet quickly took the advantage of deregulations after Ryanair adopted such low fare concept. easyJet brought the no-frills concept to Europe airline industry. The passengers who were using the higher amount of fare of the traditional airlines suddenly switch to the low fare. It was a revolutionary movement for the UK airline industry. On the contrary, Akamavi et al. (2015) argued that such initiatives of cutting down the fare of the airlines invoked the competition between the low cost carriers and their traditional rivals. The upstarts of the cut-price gained the significant advantage after such transformation. The budget airlines even followed a number of rules in establishing the destinations (Han 2013). It was noted that majority of the destinations were determined by focusing on the seasonal demands. The destinations of the budget airlines were even focusing on the leisure tourisms as well.

Success and Failure of the Budget Airlines in UK

The growth of Low Cost Carriers signified the market liberalization. The deregulation system in airline industry created the significant impact on the domestic aviation market in many countries. Therefore, the market-oriented airline services started following the international norms. easyJet and Ryanair took the advantage of formulating the common aviation area in European Union. These airline companies captured 41% of the seat capacity on the European scheduled services. David Mc A (2013) observed that in spite of introducing the different approaches in low cost carrier services, the common approach was to satisfy the customers’ expectations. The prospective is to identify the value of the airline passengers. The cyclical industry even needs to surge the fuel cost. In addition to this, the maintenance of the competitive advantage is necessary for surviving in the airline industry (Chang and Yu 2014). Therefore, the emergence of the low cost carriers helped some of the airline companies to achieve success. However, the emergence of the low cost carriers affected many of the airline companies that caused the frequent failure. Debonair, the renowned airline company was the first budget airline to collapse during 90’s (Budd et al. 2014). Debonair set the focus only to the business-related destinations including Paris in Europe. The airline company was dealing with the British Aerospace Plc aircrafts from the Luton Airport in London. The operational process of Debonair was ceased when it started to deal with the ‘no-frills’ approach by providing the enhanced services to the passengers (Iboro.ac.uk 2017).

UK airlines are currently stopped the program of serving the long-haul destinations. Thomas (2017) implied that in this competitive market, the budget airlines in UK are much helpful in ensuring growth of outbound short-break tourism services. The rise of such airline companies is stimulating the short-break tourists and ‘stag ad hen’ trips. This type of tourism facilities is even establishing the city breaks that attracted the UK passengers in a larger number. Therefore, it can be implied that the rise of the budget airlines signifies both the positive and negative consequence in UK (Quest 2017). The leisure tourism introduced to the UK passengers was quite beneficial for the airline company to ensure growth in the tourism sector. However, the improper management of the low cost carriers even caused the failure to the business and Debonair airline is the most significant example of such failure.

Conclusion:

The study provides the overview of the budget airlines in UK. It was noticed that the airline industry in UK was quite influenced by the low cost services introduced in US. In order to attract more UK passengers and strengthen the competitive edge, the UK airlines also utilized such strategies to make the significant profits. As a result, it was noticed that Rynair and easyJet could make the remarkable progress in ensuring growth in the airline industry. On the contrary, Debonair faced the significant loss by introducing the low cost carrier services. However, introducing the budget airline was quite commendable in terms of establishing leisure tourism in UK.

References:

Akamavi, R.K., Mohamed, E., Pellmann, K. and Xu, Y., 2015. Key determinants of passenger loyalty in the low-cost airline business. Tourism management, 46, pp.528-545.

Bilotkach, V., Gaggero, A.A. and Piga, C.A., 2015. Airline pricing under different market conditions: Evidence from European Low-Cost Carriers. Tourism Management, 47, pp.152-163.

Bows?Larkin, A., Mander, S.L., Traut, M.B., Anderson, K.L. and Wood, F.R., 2016. Aviation and Climate Change–The Continuing Challenge. Encyclopedia of aerospace engineering.

Budd, L., Francis, G., Humphreys, I. and Ison, S., 2014. Grounded: Characterising the market exit of European low cost airlines. Journal of Air Transport Management, 34, pp.78-85.

Chang, Y.C. and Yu, M.M., 2014. Measuring production and consumption efficiencies using the slack?based measure network data envelopment analysis approach: the case of low?cost carriers. Journal of advanced transportation, 48(1), pp.15-31.

David Mc A, B., 2013. Service quality and customer satisfaction in the airline industry: A comparison between legacy airlines and low-cost airlines. American Journal of Tourism Research, 2(1), pp.67-77.

Economist.com, 2017. Cite a Website - Cite This For Me. [online] Economist.com. Available at: <https://www.economist.com/news/business/21635001-low-cost-airlines-have-revolutionised-short-haul-flying-now-after-several-failed-attempts> [Accessed 25 Jul. 2017].

Han, H., 2013. Effects of in-flight ambience and space/function on air travelers' decision to select a low-cost airline. Tourism management, 37, pp.125-135.

Iboro.ac.uk, 2017. GaWC Research Bulletin 174. [online] Lboro.ac.uk. Available at: <https://www.lboro.ac.uk/gawc/rb/rb174.html> [Accessed 25 Jul. 2017].

Low, J.M. and Lee, B.K., 2014. Effects of internal resources on airline competitiveness. Journal of Air Transport Management, 36, pp.23-32.

Quest, R., 2017. Around the world by low-cost airline. [online] The Telegraph. Available at: <https://www.telegraph.co.uk/travel/advice/around-the-world-by-low-cost-airline/> [Accessed 25 Jul. 2017].

Thomas, N., 2017. From budget to business: how the low cost airlines are winning us over. [online] Telegraph.co.uk. Available at: <https://www.telegraph.co.uk/finance/newsbysector/transport/11059009/From-budget-to-business-how-the-low-cost-airlines-are-winning-us-over.html> [Accessed 25 Jul. 2017].