AIRLINE WITHIN EU

Low Cost Schedule Airline within EU

Low Cost Schedule Airline within EU

Introduction

Market factors favour inauguration of a new airline to meet the requirement for low cost, higher-quality passenger and cargo service linking European Union countries with the rapidly expanding markets of South-eastern Europe and Turkey, and linking South-eastern European destinations, via Western European hubs, to trans-Atlantic and global destinations.

Air Europe will be planned around, and functioned utilizing, the most up-to-date electronic, informational, and aviation technologies to make sure low functioning and advertising costs, utmost competence in consumption of its possessions, and a high level of customer service and expediency. And it is this final constituent - devoting the airline, its employees, and its business to provide a high level of customer service and expediency, and economically meeting the needs, wants, comfort, and security of the traveller that will guarantee the Air Europe's quick acceptance in the marketplace and its long-term expansion and achievement. The route of this low cost airline would be from London to Paris (See Appendix).

Demand Patens from London to Paris

There are 377 flights per week fly out to Paris from London. The demand is very high and prices of fares are very high. The only competitor for Air Europe is Ryan Air. We are going to complete the Ryan Air in this industry. We would to achieve economies of scale by penetrating in the market. Demand factor of airline industry can be shown in following diagram.

Different factors play role into molding of an economical environment. The airline industry is a complex economical system that directly and indirectly gets affected by many factors. The driving force of this industry is of course demand - the peoples need to travel every day to different destinations.

Capital Requirement of Entry

The cheapest Boeing 737 jet costs more than £60M. Even if a new airline acquires a jet, it would need customers almost instantly to offset the costs of financing its jet and paying for skilled pilots, maintenance crew, and jet fuel.

Objectives of Air Europe

Air Europe will have as its primary objectives the following elements:

1. To establish and operate a new regional airline aiming specifically at linking Western Europe with the rapidly expanding markets of South-eastern Europe and Turkey, and connecting South-eastern European destinations, via Western European hubs, to trans-Atlantic and global destinations.

2. To provide facility and attract unmet demand in three key traffic categories: unserved and under-served routes on which high demand presently exists or can be formulated; serving key niche markets where requirement is either unmet or poorly served; and gathering peak traffic requirements on convinced key regional, seasonal, and uneven routes where very high load factors can be predicted despite existing, but lower-cost competition. (Rhoades, 2008)

Competitive Comparison

In comparing the suggested new airline to its rivals, there are at least two levels of association that should be measured; the typically lower-standard airlines, both listed and contracted, flying out of the Southeastern European region, and the higher-standard, more extremely regarded airlines operating out of Western ...