Magazine article Management Today

Good News for Fliers

Magazine article Management Today

Good News for Fliers

Article excerpt

|You ain't seen nothing yet.' This is the message for airline passengers and beleaguered aviation executives alike. The already ferocious competition will step up several degrees through the '90s. Battle has already commenced. Giant US carriers such as United and American, flushed with their victories at home, are moving onto the global stage. A new battle of the Atlantic looms between the American and European carriers (see Air Wars p48). The decision by the European Commission to open its skies to free competition by the mid-'90s will pave the way for an American style free-for-all.

Many airlines will crack under the pressure. Amalgamations will be rife and trans-national carriers will eventually dominate the major routes, leaving smaller competitors to winkle out new routes and markets. However turbulent life becomes for airlines, more competition is good news for passengers. The American experience of de-regulation has shown that it forces down fares dramatically. Passenger numbers have soared and air travel is now a mass transport business. In Europe, prices are already tumbling. The absurdity of a short-haul flight being more expensive than a transatlantic one will become a distant memory. Prices are also falling on transatlantic routes (British Airways is now offering a Gatwick-to-Dallas return flight of 259 [pounds]).

Increased competition in Britain has been hugely beneficial. A decade ago, BA was renowned for appalling service, but a ruthless attention to quality has paid dividends. BA now regularly wins awards and plaudits for its service. On the domestic front, too, competition has resulted in better service. Meals on shuttle flights appeared miraculously when British Midland mounted an aggressive challenge to BA.

The competition is also good news for the aerospace industry as its old defence cash cow dries up. …

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