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Vinay
Bhandari
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Until 1978, the CAB regulated the U.S aviation industry
The Airline Deregulation Act, 1978 The European aviation
industry was governed by individual
bilateral agreements
The deregulation of EU aviation began in 1987 and became a
singlemarket in 1993
By 1997, EU removed the final restriction by allowing
Cabotage
The transatlantic route was regulated by bilateral open
skiesagreement between the U.S and EU nations
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The US legislation restricted foreign ownership in domestic
airlines
to 24.9%, while Europe limited non-EU ownership to 49%
London's Heathrow airport is an epicenter for major shifts on
the
transatlantic routes
The open skies pact opened up Heathrow to more competition
The business class on transatlantic routes had emerged to be
a
profitable segment for established as well as new players
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Established by Richard Branson, in 1984
It is the second largest long haul airline and third largest
Europeancarrier
Its entry to BCO market was in 2007
After open skies agreement, virgin was open to more
competition
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Transatlantic routes represented 60% of the global traffic
andaccounted for an annual revenue of $22 billion for both US and
EUairlines
Liberalization of transatlantic air services- open skies
pact
The business class emerged as a profitable segment
1500 premium travel passengers each day on the transatlantic
route
Trend for BCO picked up after the 9/11 attacks
Success of Privatair created a niche market for BCO airlines on
thetransatlantic routes
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Extensive network
Quality
Used Heathrow to attract business class travelers
Flexibility in timings for business travelers
Strategic alliances Very aggressive with volume discounts
Frequent flier programs
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Growing competition due to Open Skies Pact
Competition with small Niche Players
Fare Structure
Eos Airlines walk up round trip business class fare- $5400
Discounted fares - $2549
