The Effects Of Air Travel On The Year After Year

Overall, the five forces model suggests that the overall intensity of competition in the airline industry is likely to be severe. Back in the early 1980 's competition was very intense. During the late 1980 's the monopolization of major routes by a few major carriers, the limited availability of free landing spots at major hubs and the emergence of limited brand loyalty and tacit price agreements have all helped reduce the intensity of competition. However, as already mentioned, slumping demand in the early 1990 's plunged the industry once more into a severe price war. Airline travel is a commodity-type product, with limited potential for differentiation.

increase. Despite the increased costs of tickets due to these surcharges, demand for air travel

Two elements are working against air travel at present. First, the industry is experiencing a cyclical slowdown that has its origins in the Asian financial crisis. Second, with the days of deeply discounted fares over, fewer first-time travelers are entering the market.

There also could be a decline in leisure time travel due to the terrorism that took place on 9/11. A dejected economy can also have an adverse effect on travel. New government regulations could also make air travel more costly since there are not very many areas that an airline can reduce its costs so they would have to increase prices. Technology is taking a step forward via ticketing and Southwest airlines allows passengers to check in online up to 24 hours in advance.

Over time many transactions have changed. For example, as previously mentioned within the tourism industry the supply and demand varied within different sectors of those markets. As a result, many third party companies saw opportunities to expand their companies by providing travel assistance. As the price decreases, the supply for flights will decrease and the demand for flights will increase. These third party companies negotiate deals with the various airlines that will be most beneficial for the parties involved. Of course, there have been different trends that have grown based on vast time periods. The impact is measured based on the supply that

Although the company has been able to gain a competitive advantage by distinguishing themselves from the competition, it still remains a difficult industry to compete in. Because the competition is very high it is simple for customers to look elsewhere for a better deal. The product is air travel and there are many competitors offering the same destinations. Airfares and rates vary and the competitors are always pushing to lower rates in order to fill empty seats and ensure profits.

The airline sector had already been suffering a slowdown as a result of lower economic growth and cutbacks in business travel. Then, at the moment the

The International Airlines industry will benefit over the next five years, as the number of tourists significantly rises up every month. Especially, there are more and more people from China are visiting Australia, which will provide Qantas with a great revenue. However, the competitors of Qantas, with low-cost tickets, can have a big pressure on Qantas and lead to decrease in price. Although, there will be a greater demand from Australians and international travellers to purchase tickets from this industry. The demand of the company is planning to rise at an annualised 1.2% over the next

The price of an airline ticket has changed much than what it was years ago. “The average cost of a plane ticket within the U.S. plunged 9.1 percent to $315 during the first three months of 2009” (Johnson, J.) People can now travel cheaper and faster than they could before commercial airplanes became a reality; whether it is a vacation to Hawaii or a trip to see the Great Wall of China. This also allowed more immigrants to come to United States as it was viewed as hope for the poor, for them it meant a new life and freedom. Also, businesses have used airplanes as a method to communicate with one another and the American culture has been influenced by cultures from around the world. Participation in events in foreign countries such as Tour

If the price of airfare increases the demand for air travel will fall. Less people will be able to afford the higher prices for air travel.

The airline industry is very sensitive to the state of the economy. People will choose to spend their discretionary income elsewhere when times are tough and will most likely not pay top dollar if they must fly.

The airline industry is one that has rapidly evolved both with regards to technology and product offerings. This paper argues that technological advancements, deregulation and competitive pricing and marketing strategies are what have driven change in regards to JetBlue. The paper goes on to explain how each of these factors affects and drives change in the other three. Deregulation occurred to increase competition; competition in turn affects innovation in marketing and pricing as well as technology, yet this process has no specific order with regards to where the change starts as innovation and competition, can then affect the way the market is regulated. The paper begins by giving a history of pricing strategies and how the deregulation that occurred in 1978 revolutionized the business and it's pricing. It then goes on to the industry analysis which discusses how travel agencies affected pricing due to the percentage that they took from sales. Yet with the advent of the Internet, brick and mortar travel agencies became basically obsolete as more and more passengers began choosing the cheaper online alternative. This new technology cut out the middleman, and also allowed airline industries to diminish their own costs by diminishing personnel, as they developed company websites from which the passengers could purchase flight tickets. The Internet also allowed airline companies to develop dynamic pricing models, where they could monitor their competitors'

Since the airline industry is a direct product of market conditions, it is greatly affected by all externalities. Many people noticed a decline in travel after the September 11th tragedy occurred due to safety concerns. When there is a huge increase in fares that definitely interferes with the demand for travel; it causes the price of tickets to continue to rise since a clear correlation between supply and demand exists. When the economy is doing well in terms of the employment rate, and when the dollar is strong people have the tendency to travel more (Jerram,1998).

The implications of this analysis are that the focus on the Chinese market is justified. The Chinese air travel industry is booming, and indeed this is fueled by that country's rapid growth and the increased demand for

The growth of airline industry in any country is directly proportional to its GDP growth; the greater the business activity, the more air travel and the higher the GDP of the country. The demand