In this master thesis, the subject "Arabic Airlines in the European Market - Strategies, Consequences and International Market Changes and Challenges" is accurately represented and analyzed by the author, whereby different methods are used.
The aim of this work is to show the extent to which Arab companies have changed the European airline market in recent years, including the opportunities, possibilities and risks that arise for European and Arab companies. For this purpose, the ten largest companies in the European and Arab market are briefly presented and compared with all key business data. In the Arab market, this includes Qatar Airways, Emirates, Etihad Air-ways, Oman Air, and Saudi Arabic airlines, Gulf Air, Royal Jordanian Airlines, Fly Dubai, Air Arabia and Middle East Airlines. In the European market, the following companies are considered in more detail: Turkish Airlines, Lufthansa, Swiss Int'l Air Lines, British Airways, Austrian Airlines, Air France, Aegean Airlines, KLM, Virgin Atlantic and Finnair. With the help of Porter’s five forces, first the Arabic airlines are analyzed, being closely examined in the following areas: threat of new entrants, threat of substitute products or services, bargaining power of customers, bargaining power of suppliers and intensity of competitive rivalry. Subsequently, the European market is analyzed based upon globalization drivers developed by George Yip. The distinction is made based upon the following points: market drivers, cost drivers, government drivers and competitive drivers.
The results of these investigations highlight that the Arab companies are still very young on the market, only existing on the market for a maximum of a few decades. By contrast, European companies have already been present on the market for much longer. However, the Arabian airlines have very quickly gained enormous market power and large market shares, backed by the vast financial reserves of state-owned enterprises. These companies not only have the financial background that reflects a great advantage over all other international airlines, but also other important advantages that favor a growth in the market. [...]
Table of Contents
1 Introduction
1.1 Problem Definition
1.2 Objectives
1.3 Structure of the paper
1.4 Research Methodology
2 Porter’s five forces and Globalisation Drivers from George Yip
2.1 Porter’s five forces
2.1.1 Five Forces model
2.1.2 Analysis
2.1.3 Advantages and Disadvantages
2.2 Globalisation drivers of George Yip
2.2.1 Globalisation drivers model
2.2.2 Analysis
2.2.3 Advantages
3 Information of European and Arabic airlines
3.1 Arabic Airline Market
3.1.1 Qatar Airways
3.1.2 Emirates
3.1.3 Etihad Airways
3.1.4 Oman Air
3.1.5 Saudi Arabic airlines
3.1.6 Gulf Air
3.1.7 Royal Jordanian Airlines
3.1.8 FlyDubai
3.1.9 Air Arabia
3.1.10 Middle East Airlines
3.2 European Airline Market
3.2.1 Turkish Airlines
3.2.2 Lufthansa
3.2.3 Swiss Int’l Air Lines
3.2.4 British Airways
3.2.5 Austrian Airlines
3.2.6 Air France
3.2.7 Aegean Airlines
3.2.8 KLM
3.2.9 Virgin Atlantic
3.2.10 Finnair
4 The Influence of Arabic airlines on the European Market Global Strategy of Arabic Airlines
4.1 Development of the airline market
4.2 Analysis of the Arabic Airlines by Porters five forces
4.2.1 Threat of new entrants
4.2.2 Threat of substitute products or services
4.2.3 Bargaining power of customers
4.2.4 Bargaining power of suppliers
4.2.5 Intensity of competitive rivalry
4.3 Analysis of the European market by George Yip’s Globalisation drivers
4.3.1 Market globalisation drivers
4.3.2 Cost globalisation drivers
4.3.3 Competitive globalisation drivers
4.3.4 Government globalisation drivers
4.4 Market entry Strategies
4.4.1 Sprinkler Strategy
4.4.2 Waterfall Strategy
4.5 Empirical Study
4.6 Strategic globalisation forecast planning
4.6.1 Boeing
4.6.2 Airbus
5 Results, Critical Analysis and Recommendations
5.1 Results
5.1.1 Porters five forces Analysis
5.1.2 Yip’s Globalisation drivers Analysis
5.1.3 Empirical Study
5.1.4 Market entry Strategies
5.2 Critical Analysis
5.2.1 Porter’s five forces Analysis
5.2.2 Yip’s Globalisation drivers Analysis
5.2.3 Empirical Study
5.2.4 Market entry Strategies
5.3 Recommendations
5.3.1 Porter’s five forces Analysis
5.3.2 Yip’s Globalisation drivers Analysis
5.3.3 Market entry Strategies
6 Conclusion and Outlook
6.1 Conclusion
6.2 Outlook
Research Objectives and Thematic Focus
The thesis aims to analyze how Arabic airlines have reshaped the European aviation market by leveraging their unique strategic advantages, financial backing, and specific market entry approaches, while evaluating the competitive responses of European carriers.
- Strategic comparison between Arabic and European airline management models.
- Application of Porter’s Five Forces to analyze the competitive environment of Arabic airlines.
- Implementation of George Yip’s Globalization Drivers to assess the European airline market.
- Investigation of Market Entry Strategies, specifically the "Sprinkler" versus "Waterfall" approaches.
- Analysis of empirical customer satisfaction data regarding Arabic airline services.
Excerpt from the Book
Threat of new entrants
New entrants create additional capacity in an industry, including for each industry and their customers. Through the pursuit of profit and the high capital equipment of the new entrants, declining market prices and thus the profitability in the industry occur. Porter explains that the reasons for the market entry of new and additional competitors depend on the expected reactions of existing competitors, as well as the existing entry barriers (particularly important). Michael E. Porter distinguishes the following seven reasons for differences and barriers to entry:
Operation of scale
Product differentiation
Capital requirements
Government policy
Cost advantages
Distribution channels
Conversion
An important point that must always be considered in this context is that the various barriers to market entry have different properties, which can be changed continuously. Companies cannot always influence these changes, although the strategic decisions can continue to exercise a great influence on them. Depending on the size or resources and skills of the company, they are able to make entrance barriers heavier or lighter than others. Indeed, the age and experience of companies in certain areas such as marketing certainly holds great importance.
Summary of Chapters
1 Introduction: This chapter outlines the problem definition, research objectives, and the methodological approach of the study regarding the airline market changes.
2 Porter’s five forces and Globalisation Drivers from George Yip: The theoretical foundation is established by detailing the Five Forces model for company analysis and Yip's drivers for global market assessment.
3 Information of European and Arabic airlines: This section introduces the top ten key players in both the Arabian and European markets, providing business context and fleet data.
4 The Influence of Arabic airlines on the European Market Global Strategy of Arabic Airlines: The author applies the theoretical frameworks to analyze market development, competitive rivalry, and specific entry strategies used by airlines.
5 Results, Critical Analysis and Recommendations: This chapter synthesizes the research findings, offers a critical discussion of the study's results, and provides strategic recommendations for industry stakeholders.
6 Conclusion and Outlook: The study concludes by summarizing key insights and providing an outlook on future market trends and strategic necessities for European airlines.
Keywords
Arabic Airlines, European Aviation Market, Porter's Five Forces, George Yip, Globalization Drivers, Market Entry Strategies, Sprinkler Strategy, Waterfall Strategy, Competitive Rivalry, Air Travel, Airline Strategy, Market Power, Customer Satisfaction, Long-haul Flights, Airline Alliances
Frequently Asked Questions
What is the fundamental focus of this thesis?
The work focuses on the transformation of the European airline market due to the rapid growth and strategic influence of Arabic airlines.
Which theoretical models are central to the analysis?
The research primarily utilizes Michael Porter’s "Five Forces" model for competitive analysis and George Yip’s "Globalization Drivers" to evaluate market internationalization.
What is the primary objective of the research?
The objective is to understand how Arabic airlines achieved rapid growth and influence, how their strategies differ from European counterparts, and how these changes impact the competitive landscape.
How is the empirical part of the study conducted?
The author conducted an online questionnaire involving 113 participants to gain insights into customer perceptions and satisfaction regarding Arabic airlines.
What topics are covered in the main section of the paper?
The main section covers market entry strategies (Sprinkler vs. Waterfall), competitive dynamics, governmental influences, and the impact of state-owned financial structures on market expansion.
Which specific airlines are analyzed in detail?
The thesis examines the top ten airlines from the Arabian region, such as Emirates and Qatar Airways, and major European carriers including Lufthansa, British Airways, and Air France.
Why are Arabic airlines considered to have a competitive advantage over European firms?
The research highlights significant advantages such as state-funded financial backing, lower tax burdens in their home countries, and the lack of restrictive flight regulations like night-flight bans.
How does the "Sprinkler Strategy" differ from the "Waterfall Strategy"?
The Sprinkler strategy involves entering multiple international markets simultaneously, whereas the Waterfall strategy involves a sequential, market-by-market expansion approach.
What conclusion does the author reach regarding the starting thesis?
The author concludes that the initial premise—that young regional companies cannot displace established giants—is unconfirmed, as Arabic airlines have successfully emerged as dominant global market players.
- Quote paper
- Julia Teigeler (Author), 2015, Arabic Airlines in the European Market. Strategies, Consequences and International Market Changes and Challenges, Munich, GRIN Verlag, https://www.grin.com/document/316547
