2 Make a macro-environment analysis of the European airline industry based on the information in this case. troubleFlying has become so cheap that it has changed our daily lives. Five days of work on a job in Poland, a bachelor party in Riga, or monthly up and down to the second house in Spain for a family from London: it’s all possible. Yet the future doesn’t look that bright for many airlines. The COVID pandemic changed everything for the airlines, and the outlook for aviation has not improved since then. Cut-throat competition continuously keeps airline ticket prices low, and increasing environmental awareness might impact our travel behavior, while fuel prices are rising due to the uncertain political situation and the war in Ukraine.

Flying was the future While airline ticket prices were going down continuously, the number of air passengers worldwide doubled between 2000 and 2010 to a total of 2.5 billion annually in 2010. The growth in passengers leveled off after that, but until the COVID pandemic in 2020, it was still growing in Europe at about 5% per year. However, a clear shift could be seen: ‘traditional’ airlines became less relevant and the low-cost airlines started taking the lead.The increase in passenger numbers was caused by a number of factors. Due to the low cost of flight tickets, flying became so cheap that people went to their holiday destinations by plane when they would otherwise have taken the car or train. However, the increase was not exclusively based on choosing another means of transport; low-cost carriers also expanded the market.