China Airlines
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The Rise of the Internet Economy – The internet and e-commerce has completely altered the airlines distribution (the booking and ticketing of passengers for air travel). With the advent of e-tickets, travelers can book tickets on their flights through the airlines websites or a third-party website (Orbitz, Travelocity, Expedia). This has allowed airlines to bypass travel agent commissions, nearly eliminate wasteful paperwork, and reduce airline staffs.
2. Globalization – Growth potential in the global travel market has led to a drive for globalization in the air travel industry. To facilitate international growth, U.S. airlines are lobbying for “open skies” treaties between the U.S. and other nations. These treaties are bilateral agreements that essentially deregulate travel between the involved countries, thus opening up certain markets to competition. The U.S. currently has signed more than 60 open skies treaties with nations around the globe.
3. Low-cost Competition – The rise of the low-cost carriers has forced a change in the competitive environment of the air travel industry. Southwest, JetBlue, and Airtran, among others, operate off of low-cost strategies that allow them to offer relatively low airfares. These low fares put pressure upon the entire industry and are forcing rivals to lower their costs and decrease their fares in order to stay competitive.