NAME: HYRELL V.

ATENTO
COURSE: BSTM-T
SUBJECT: BASIC FINANCE
SUBJECT CODE: MS. JANNYLE OLANO

1.The driving and hindering forces that changed the European Union deregulated air
travel in the mid 1990’s, low cost airline companies decided to enter the European air
travel market and established business models that allow the companies to offer flights
at low cost. Through a focus on the cheapest passenger transportation from one point
to another, these companies aim to avoid all additional costs. Significant costs savings
are achieved, for instance, by only selling tickets on the internet, hence by passing
traditional, margin demanding travel agencies. In providing a real alternative that met
the prevailing travel needs, low cost companies steadily increased passenger numbers
and could sustainably position themselves in the market.

2. For me, I read here the change of their airlines by no longer accepting the cheap
price of ticket sales. They also no longer accept flights online or media. And also the
deregulation of European air travel market, the entrance of low cost airline companies,
declining sales and increasing cost sensitivity represent driving forces for national
carriers to change. Conversely, the investments related to setting up a low cost
business model and partly abandoning their current market positioning represent forces
against the change.