From Icarus to Airbus 380, the dream of the "flying man" seems to be universal. During the 20th century this dream was becoming real through the development of the plane and airline companies which manage it. The rising need to travel has obliged the authorities to regulate this market by rules and agreements. The last trend is the "open skies" agreements which deregulate between two countries some of commercial, logistic, strategic and economic points of airline company organization. In 2005, a major "open skies" agreement about Trans-Atlantic aviation has been signed with difficulty by EU and US. By focusing on business issues, my study deals with the change this agreement will bring for airline companies, according to the key question of the case study: "What strategies might airlines adopt in this new regulatory environment?" As an answer, I have decided to divide the study in three parts.
[...] We will not attend in a direct competition. Conclusion We have seen that airline companies have adopted a new strategy since the end of the 20th century due to a new business, economic and legal environment. The major act for deregulation, the US-EU “open skies” agreement, confirms this path. The aircraft market could become more and more competitive but I think that the three great alliances are able to control it by taking over the smallest companies and by being present on the whole segments. [...]
[...] To conclude, the agreement will claim big investments from the countries on facilities and security. The months following the signature of this agreement, will be critical for the countries. The best word to introduce this is anticipation. On the other hand, this new agreement will decrease the national's sky control and therefore increase the European's sky control. The sky being an essential part of countries' borders and identity, this agreement is also the first step to a European Identity regarding passengers travelling, new routes and air security. [...]
[...] Indeed, the airline companies have a wide range of possible routes and need to focus on the more profitable. If in theory, it will be good for competition, the reality has shown that the market is more closed. Therefore the biggest companies share the most profitable routes by tacit agreements, so the smallest are unable to compete with these and are obliged to goes on small segments. That is why we can see the emergence of low costs companies. Source: InterVISTAS Low cost companies focus on short-distance carrier and develop original routes. [...]
[...] The new agreement will open the national sky to other companies coming from different countries. They will be able to create routes inside cities from the same country. While countries are going to lose a part of their sky's ownership, they obviously lose a part of their identity. Moreover, such an agreement will have as a consequence the creation of new facilities as control towers, airport and security buildings. Because countries are losing a part of their sky, they will have to increase the level of monitoring regarding the sky, with the increase and the creation of routes. [...]
[...] Process, the next strategies According to the new Open Skies Agreement between United States of America and European Union, this third part deals with the strategies that airlines' might adopt. We decided to speak about three main points that are explained below. Consolidation Before dealing with consolidation it should be accurate to define this term. Consolidation is the act of merging many firms into one; it often refers to the mergers or acquisitions of many smaller companies into much larger ones. [...]
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