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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Introduction:In the beleaguered commercial aviation industry, saddled with low return on investment, a new airline has started operations in October 2005. The new airline, Eos is operating as all-business class airline between London and NewYork. Experts opine that if the business model of Eos succeeds, it would put pressure on the profitability of many network airlines in the premium, long-haul business segment. Industry analysts are skeptical about the success of the new airline, given the typicality of the industry, "Such produce has, in a sense, to be consumed before it can be unpeeled. Once the aircraft succeeds in leaving the ground, any unconsumed produce - empty seats - immediately and irretrievably goes rotten. The same dilemma does face other service industries such as theatre and hotel managements. But the special problem of the airline industry is the very large capital investment that it has to make in order to persuade its rather fickle customers to consume".

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