Review Questions 1.7 The Real life' scenario titled 'Increasing competitive pressures faced by Asian airlines' in the section 'Australian organisations in the twenty-first century' highlights the turbulent competitive environment faced by many airlines. Explain how such events might impact the type of information provided by management accountants in those organisations. LO 1.3 REALLIFE REALLIFE INCREASING COMPETITIVE PRESSURES FACED BY ASIAN AIRLINES Demand for air travel continues to grow within the Asian region, highlighted by the fact that seven of the ten fastest growing origin- destination passenger markets for 2015 were located in Asia. Much of this is being driven by strong growth in China for both domestic and international travel. Despite this growth, the airline sector in Asia is highly competitive, with market participants facing a range of challenges and pressures stemming from increased globalisation and deregulation of the sector. For example, the three major Middle-Eastern airlines (Emirates, Qatar and Etihad) are adding significant capacity and pricing aggressively. Also, increasingly price-conscious customers have fostered the spread of low-cost carriers in the region, which now accounts for 54 per cent of capacity in South-east Asia. Such challenges and pressures place ever increasing pressure on passenger yielcs and squeeze airline profits. Established carriers have sought to respond to these competitive pressures in different ways. For example, Jetstar Asia has implemented a suite of strategies, including restricting capacity investment, boosting interline and codeshare traffic, and rationalising its network to focus on growing and underserved destinations. Other airlines, such as Singapore and Cathay, are looking to play to their strengths, by leveraging their strong brand and bolstering their service quality with updated aircraft and in-flight services, while trying to keep their costs down to remain competitive in a tough market Sources: Bagchee (2012); Park (2016); Ramchandani (2016); Tani (2015)