The paper "Singapore International Airlines Issues" is a perfect example of a Business Case Study. There were two major problems in the international airline industry. The first problem was the congestion of airports and the other problems were the allocation of slots. Developed airline companies opposed the deregulation of the airports and the allocation of slots. The airline industry was regulated and it was hard for individual airlines to enter any global market, they wished to enter as priority was given to national airlines (Ka-Fu 2005). The Convention for regulating aerial navigation was formed in the year 1919 and also International Air Services Transit was formed in the year 1944 which allowed planes to fly in other country’ s airspace and could land anywhere for instance to refuel.
However, the US wanted free entry to all destinations while airlines such as Emirates Airlines opposed this move. The Hong Kong slot allocation was based on off-peak and peak slots (Ka-Fu 2005). Domestic airlines like Cathay Pacific and Dragon Air were allocated the highest percentage of slots compared to other airlines like Emirates. For example, both airlines had a total allocation of 53.80% and 45.61% off-peak and peak slots respectively as shown in the diagram below; The contribution of Emirates Airlines is that it enabled to increase the demand for airline services.
Passenger traffic increased by 7.4% between the years 1980 and 2001. Emirates Airlines took part in establishing the best ways to allocate the slots. It advocated for the retention of the slots by 50%. Further, Emirates Airlines contributed by trying to establish the best way to allocate slots to airlines so that the airports could be used efficiently (Ka-Fu 2005).
It did this by advocating to end the rights of allocating slots by auctioning 10% slots every year. What went well about the contribution of the Emirates Airlines is that the airline improved its slot at the Hong Kong Airport slots allocation. However, this could have been improved by entering into strategic alliances so that the joint alliance could acquire more slot allocation. The European Union banned the slots, although this flourished the grey market at Heathrow airport. The European Commission accused the UK airlines and its government by backing the grey market move. Part 2 Characteristics of China’ s Airline industry pre-2001 The development of China’ s industry began by importing 12 small airplanes from Hong Kong.
Later, more planes were imported from the UK, the Soviet Union, and the US. Civil Aviation Administration of China (CAAC) controlled the Air force of China. The main characteristics of the Airline industry in China include the following; First, the Chinese airline was regulated by the CAAC. By the year 2001, there were 11 airlines under its control and supervision. However, with the recent liberalization of the market, the airline industry is moving towards an open industry (Sha 2002).
In March the year 2001, the airline industry gave the first green light to air ticket discounts which accounted for about 405 of the domestic routes. In addition, CAAC controlled the pricing of the Chinese airline industry. The organization had the authority to approve any price made by airlines flying at specific routes. CAAC was vested with this responsibility due to the liberalization of the Chinese airline market so that it can regulate the operations of the airlines (Sha 2002).
The Chinese industry is also characterized by radical developments in the years of 1980s. By the year 1999, there were 1122 routes that were domestic and there were 64 international routes. There were a total of 26 airlines in China (Sha 2002). Moreover, the Chinese airline industry grew by 9% in the first months of 2001 despite the slowdown of the US economy and the international air market. This growth is associated with the concept that China was delinked from worldwide and regional cycles.
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