Singapore Airlines.the International Airline Industry .

The International Airline Industry .Singapore Airlines

Background

The airline industry has been limited in expanding because of national and international regulations. Even the dominant players in this market have only been able to keep their dominance over their own markets, except for United States. In United States, the state owned national flag carriers have been the key players of this industry. But in 1990, the competition started to increase in this industry. This was caused due to deregulation, privatization and advent of new technology.

During the nineties every major country in the world saw deregulation in airline’s industry. In 1978 United Stated deregulated its airlines and saw an increased competition in their local market. Similar thing happened to European Union when they disbanded their country specific barriers to free market competition among air carriers. Asia also followed the same route. Some regions in Asia quickly deregulated themselves. Many small national carriers in Latin America were privatized.

The emergence of free market competition was expected to be more dominant as many European Nations were discussing implementation of opening transatlantic market with USA where landing rights would be determined by free market forces, rather than regulation. The countries signed bilateral agreements between countries that enabled the airlines of those countries to provide landing and takeoff facilities for air carriers of those countries.

Privatization and deregulation made the airlines take a strategic positioning in the industry. They now had increased global reach and less regulation, so they could give more services in fewer prices.. Many carriers had to improve their services to keep up with the market. Profit margins were getting lower as the airlines were engaged in fare wars trying to give the best possible service in cheaper price.

As global barriers were relaxed, the airlines made alliances to serve new markets...