The impact of the recession on companies' strategies in the Irish airline industry

Abstract

The airline industry is an industry characterised by rapid change, innovation and new technology. It is a dynamic growth industry which has undergone enormous change in recent years. The airline industry is inherently unstable as it is constantly affected by new developments and constraints. Increasing regulation, new low-cost carriers, on-line selling, growing competition and a worldwide recession are some of the challenges impacting the airline business at this time. In response, airlines have had to develop and implement new strategies in order to compete and survive in the current environment. This dissertation sets out to examine the challenges faced by the three Irish airlines; Aer Lingus, Ryanair and Aer Arann as a result of the current economic recession. The principle objective of this dissertation is to investigate and compare the strategic changes these three Irish airlines have implemented in response to the ever changing market place in which they operate. Management at these airlines must ensure that they employ effective policies and strategies in order to survive the current economic recession. The research for this thesis was conducted over a period of three months and it was conducted from a qualitative perspective due to the subjective nature of the research focus. The findings of this research indicate that the current economic recession has had a major impact on companies’ strategies in the Irish airline industry. Aer Lingus, Ryanair, and Aer Arann have all implemented changes to their strategies in an attempt to survive the current economic climate. Recommendations are then proposed to facilitate the airlines in their strategic making decisions, particularly during turbulent periods. However, such ecommendations can also be adapted and used in other service industries. This dissertation concludes with the suggestion that changes in the external environment can have a major impact on companies’ performance and all external forces must be indentified and dealt with to ensure success. Proposals for future research in this field are also indentified.