Executive Summary "The airline industry is characterised as a mature, highly seasonal, capital-intensive, and price-elastic industry" (Cephas, 2000). However, the nature of competition with regard to European airlines is in a state of dynamism, particularly as a consequence of European deregulation. The subsequent evolution of a 'low cost' no frills market segment which engenders significant improvements in operating costs, has disturbed the balance of 'traditional competitive advantage'. Consequently, a number of established airlines have found it …
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…will grow strongly in the years to come, and airlines such as Lufthansa, Air France, KLM and SAS are likely to face increased competition. This might force them to review their own short haul operations, just like British Airways has done. British Airways has successfully managed change in the organisation, although still in open competition with other airlines, this will ensure they will remain proactive and ahead of competition in all aspects of their businesses.