Last Updated 27 Jul 2020

Loss of market

Category economics, Market
Essay type Research
Words 566 (2 pages)
Views 283

In European countries, a growth rate of 4% to 6% is expected by 2010. Considering this growth rate, we can infer that a few more airlines may enter the market and increase competition. In terms of small airlines like Aer Arann and other similar airlines that are in their development phase, this is a potential danger that can result in the loss of market share to smaller airlines because of the hyper competitive low fares they offer.

Airlines such as Aer Arann are sensitive to market share losses such as these since a large part of their revenue is because of the savings that they make possible through outsourcing of their maintenance mechanisms. Not only this, but a recent policy designed by the European Union does not give airlines that are going in loss to attain subsidiaries from governments (ebfonline. com, 2008). In other words, it will become next to impossible for an airline to survive if it begins to go in loss because the government will no longer remain a support system it can bank upon.

In these circumstances, the wise choice would be to carry on with the recent trend in the airline industry to form operational alliances and partnerships in order to decrease cost and increase revenue. Airlines around the world are beginning to enter into alliances and forming partnerships in order to gain access to new markets while improving revenue volumes from markets where the airlines are already present. Air Arann and Aer Lingus One of the many competitors that Aer Arann has is Aer Lingus.

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Aer Lingus is one of the most significant of all of Aer Arann’s competitors because a large part of Aer Arann’s revenue is from domestic operations in Ireland (fundinguniverse. com, 2008). Aer Lingus is the official national carrier of Ireland. Aer Lingus is considered to be a corporate giant in Ireland due to the large volume of sales that it manages to pull in (Spiritus-Temporis. com, 2005). For the same reasons, Aer Lingus as to bear the burden of taking care of the expectorations of Ireland and the Irish.

Aer Lingus is expected to maintain an accommodating approach towards Ireland and therefore, it is pressed from all sides as it competes against airlines ranging from the largest of airlines to the smallest of airlines. It would not be wrong to infer that Aer Lingus has learned a lot from its experiences in the past and has evolved in to a significantly improved airline after having nearly collapsed in 2008. It was this incident that led to the transformation of the carrier in to a privatized service provider.

With only two services to offer, Aer Lingus keeps all in-flight embellishments to a minimum and is one a direct competition to Aer Arann. However, the recent deal between Aer Lingus and Aer Arann has changed the equation quite a bit (Cork Airport, 2008). By this deal, passengers who get off an Aer Lingus aircraft can board an Aer Arann plane and vice versa from Cork Airport with through-check luggage and pre-clearance facilities. References Aerarann. com. (2008). About Aer Arann.

Retrieved February 12, 2009, from http://www. aerarann. com/about_us/aboutus. htm Bisignani, G. (2008). Think Again: Airlines. Retrieved January 11, 2009, from Foreign Policy. com: http://www. foreignpolicy. com/users/login. php? story_id=3333&URL=http://www. foreignpolicy. com/story/cms. php? story_id=3333 Black Pool Borough Council. (2008, December 4). Aer Arann keeps Dublin flying high. Retrieved February 12, 2009, from visitblackpool. com: http://www. visitblackpool. com/? OBH=513&ID=304

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Loss of market. (2018, Aug 26). Retrieved from https://phdessay.com/loss-of-market/

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