Airline Industry Competition Analysis

Competition Analysis 1
COMPETITION ANALYSIS
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Competition Analysis 2
Introduction
This paper examines the airline industry competition based on a system of hub and spoke
of full cost airline. The destinations under this analysis are Europe (London, Manchester,
Glasgow, Paris, Amsterdam, Millan, Munich, Heraklion, Athens and Mosco) and Asia (Delhi,
Mumbai, Dubai, Goa and Abu Dhabi). The focus is to present more in-depth research to reveal
the competition between these regions. Specifically, it highlights the airlines are flying between
India and London and the competitors and also between London and Larnaca, and Larnaca and
India. Thus, analysis of airline industry competition between Asia and Europe.
Competition between these regions
The Europe-Asia airline industry seems likely to be a genuinely innovative and global
changing market (Rupp and Liu 2017). The potential for organic growth in the two areas stays
limited save for a handful of smaller airlines with niche linking opportunities such as Finnair and
LOT or Norwegian. JVs are slowly becoming increasingly common and hence bring both
challenges and opportunities since they overlap because of European-Asian market convergence
(Hannigan, Hamilton III and Mudambi 2015).
The industry has in a nutshell, been two markets, a segment from Europe to North Asia
and the other Europe to Southeast Asia. With few exemptions, neither Europe nor Asia served as
a hub for one another, as opposed to Asia-North America or North America-Europe whereby
each region’s geography remains close sufficiently that European airports can be a hub for the
region.
Northeast Asia remains a hub for Southeast Asian traffic to and from North America. The
legacy airlines are thus facing new and stiff competitors on transatlantic routes. Such airlines like
Primera Air, Norwegian Air Shuttle, and British Airways are in stiff competition. The low-cost

Competition Analysis 3
Ryanair has grown to become the biggest and cheapest Europe’s airline. Others include Virgin
Atlantic, United Airlines, American as well as Delta Air Lines.
The presence of Primera and Norwegian have resulted in decreasing market share of the
big airlines. The state airlines of the Gulf have increased their control of air travel market
between Asia and Europe to the detriment of European and Asian Airlines. The Gulf airlines’
travel capacities have disproportionately grown. Such companies like Etihad, Qatar Airways, and
Emirates have their capacities increased; for example, Emirate has gone through a four-fold
increase in Abu Dhabi and five-fold in Dubai (Belobaba, Odoni and Barnhart 2015).
The Asian airline boom has been accompanied by increasing competition. Whereas Asian
airlines are witnessing comparatively strong growth, Europe’s debt crisis and global economic
uncertainty have continued to threaten airline profitability in the West. The airlines in Asia are
increasing capacity at a fast clip on international routes (Dai, Liu and Serfes 2014).
Many Airlines are flying between India and London. These include Airways, Etihad
Airways, and Singapore Airlines and Lufthansa flights); United flights (Air Emirates flights
(Qatar Canada, Aeroflot, Kuwait Airways and Qantas flights) and China Eastern flights (Brussels
Airlines, Air Mauritius, Eva Air and Korean Air flights).
Many rival Airlines are flying between London and Larnaca. These include British
Airways, Emirates, and Qatar Airways are the biggest.
There are many competing Airline flying between Larnaca and India. These include Air
France, Lufthansa, British Airways, Emirates, Gulf Air, Alitalia, and Austrian.

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References
Belobaba, P., Odoni, A. and Barnhart, C. eds., 2015. The global airline industry. John Wiley &
Sons.
Dai, M., Liu, Q. and Serfes, K., 2014. Is the effect of competition on price dispersion
nonmonotonic? evidence from the us airline industry. Review of Economics and Statistics, 96(1),
pp.161-170.
Hannigan, T.J., Hamilton III, R.D. and Mudambi, R., 2015. Competition and competitiveness in
the US airline industry. Competitiveness Review, 25(2), pp.134-155.
Rupp, N.G. and Liu, N., 2017. Product quality choices and competition: Evidence from the US
airline industry.