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Intensity of competition in a recently deregulated industry : the airline industry of the European Community

This thesis examines the liberalisation of the European Community's civil aviation industry and attempts to measure how effective this process has been in achieving its goal of increased competition and greater efficiency. Using the experience in the United States following deregulation of domestic air transport services as a template, the study employs Easton's model of political analysis and Porter's model of competitive forces as a framework for empirical research. This research was carried out with a representative sample of EC airlines, of their suppliers and customers, of providers of substitute services and of the industry's regulators. The results of the research were validated by personal interviews with leading stakeholders in the industry. The main Conclusions drawn from the research are that: i. liberalisation of the European Community air transport market has resulted in an influx of new entrants, an increase in the number of routes operated and a wider availability of discounted fares; ii. to the extent that competition has nevertheless been less fierce than anticipated, this is because the aims of liberalisation have been frustrated by a resistance to change on the part of certain Member States and by the European Commission's inability to prevent further grants of State aid to loss-making flag carriers. Inadequate infrastructure has also acted as a brake on competition; iii. customer choice is strongly influenced by frequency of service and by price. Those airlines which have set out to gain market share and which have pursued low price strategies have benefited most from liberalisation; iv. airlines benefit from selling to a large number of buyers and from having a wide choice of suppliers; V. the only threat of substitution to air travel within the European Community is from the High Speed Train and then only over comparatively short distances.

Identiferoai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:308647
Date January 1995
CreatorsO'Reilly, Margaret Dolores
PublisherUniversity of Surrey
Source SetsEthos UK
Detected LanguageEnglish
TypeElectronic Thesis or Dissertation
Sourcehttp://epubs.surrey.ac.uk/844062/

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