Name: Rosshell B.

Banzuela
Course: Bachelor of Science in Tourism Management
Subject: Basic Finance
Subject Code: BSFINA1-T

Professor: Ms. Jannyle Olaño

CASE STUDY: Transforming San Miguel

CASE STUDY QUESTIONS:

1.) Identify the driving and hindering forces that changed the European airline | industryb in the mid-
1990s.

2.) Compare the European airline industry at the beginning and at the end of the 1990s. What changed?
How did airline companies react to these changes?

1.) Driving forces in the mid-1990s for the European airline industry included the deregulation of air
travel, enabling low-cost carriers like easyJet and Ryanair to enter the market. This led to increased
competition and a focus on cost savings. On the other hand, hindering forces involved the resistance
and initial investments required by established national carriers to adapt to this new competitive
landscape.

2.) At the beginning of the 1990s, the European airline industry was characterized by expensive flights
from established carriers and slow state-owned rail options. By the end of the decade, the industry
underwent significant changes. The deregulation allowed the entry of low-cost carriers, transforming
the market dynamics. Established airlines had to react by adjusting their business models, often setting
up low-cost subsidiaries to remain competitive. This shift marked a move towards cost-effective
approaches, with a focus on internet-based ticket sales, reflecting a broader change in consumer
preferences.

In summary, the European airline industry underwent a significant transformation in the 1990s, driven
by deregulation and the rise of low-cost carriers. This shift led to increased competition, lower prices,
and changes in how airlines operated and marketed their services. Established airlines had to adapt or
face declining revenues.