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Strategic ManagementBackgroundThe global airline industry continues to grow rapidly, but consistent androbust profitability is elusive. Measured by revenue, the industry hasdoubled over the past decade, from £284 billion in 2004 to anestimated £575 billion in 2014, according to the International AirTransport Association (IATA).Much of that growth has been driven by low-cost carriers (LCCs),which now control some 25 percent of the worldwide market and whichhave been expanding rapidly in emerging markets; growth also camefrom continued gains by carriers in developed markets, the IATAreported. Yet profit margins are razor thin, less than 3 percent overall.LCCs such as Ryanair and EasyJet capitalised on the creation of asingle EU aviation market in the 1990s that allows airlines to operateservices on any route within the bloc.However, Britain’s exit from the EU has cast doubt over whether UKbasedcarriers will remain part of this arrangement, and throws upcomplications for overseas airlines that fly into British airports.Underlining investor concerns, stocks in the sector took a hammeringafter the referendum result.EU chiefs have warned airlines including EasyJet and Ryanair thatthey will need to relocate their headquarters or sell off shares toEuropean nationals if they want to continue flying routes withincontinental Europe after Brexit.Executives at major carriers have been reminded during recent privatemeetings with officials that to continue to operate on routes across thecontinent – for instance, from Milan to Paris – they must have a
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