EOS Airlines, World's First All-business Class Carrier: Low-cost Model in Long-haul Air Travel?



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Code :BSM0028

Year :
2005

Industry : Transportation

Region : USA

Teaching Note:Available

Structured Assignment :Available

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Transatlantic Commercial Aviation: The Competitive Scenario Commercial aviation is an industry where fixed investments are substantial, demand is unpredictable and is subject to events beyond its control like an economic downturn or a war. The operators have to purchase or lease highly expensive assets (such as aircrafts, landing rights and airport terminals) and hire highly skilled (and therefore expensive) labor. In spite of all this, the returns are rarely reasonable or sustained. The transatlanticmarket possesses all the above characteristics. Commercial service across the Atlantic began after World War II...

Eos: The Low-Cost Model in Long-Haul Business Travel? Eos was founded in 2003 by a group of entrepreneurs led by Dave Spurlock (Spurlock), an American, who was the director of strategy at British Airways. Eos operates between John F. Kennedy International airport, NewYork and Stansted airport, London. Stansted is the UK's leading 'no-frills' airport and is close to Canary Wharf business district and The City, London's financial district. The airport is 40-minute train ride fromcentral London. Stansted is well connected with other parts of the UK and Europe by the low-cost carriers like Ryanair and easyJet. Eos' eastbound flight departs JFK at 7:05 p.m. and arrives at Stansted at 7:30 a.m.; westbound flights depart Stansted at 10:30 a.m. and arrive at JFK at 1:29 p.m. Eos flewits first flight on October 18th 2005, two weeks ahead of its initial plan...

The Concerns "The aviation business attracts an endless stream of enthusiasts eager to start up their own airline but aviation is notorious for destroying, rather than creating, capital". Sir Adam Thomson, the late chairman of defunct British Caledonian Airways, once remarked, "A recession is when you have to tighten your belt; depression is when you have no belt to tighten. When you've lost your trousers - you're in the airline business". Before Eos, two specialist airlines were started between NewYork and London. In the early 1970s, Freddie Laker started Skytrain, a discount airline offering rock-bottom prices...

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