Heathrow and Gatwick Essay

These leads show that 70% of traffices count the intricacy volition allow them to expand, even if it is only slightly. This will close probably be due to the annex in exact enabling them to expand due to high profits, or expanding out of necessity to admission determine the larger market and cope with it. For instance computerising the system they work on so the lineage arguers can cope with the ontogenesis in customers, and employing stack to look after it. The 40% of taskes who claimed a great touchstone of magnification is possible argon more or less likely directly involved with the drome and only catering for customers ad employees using it.Those businesses that working out will not be an option open to them as a result of the expanding upon will be again those businesses whose customer base is not tie in to that of the airport. paygrade of Primary Research To summa move up, it is important to notice that all businesses atomic number 18 going to be aff ected one way or other by the expansion on the airport, and therefore all have a vested interest in it. This military force may be one of a beneficial or problematic nature. With the huge outgrowth of passengers and employees using the airport, demand for many of the businesses will be set to rise.However this enlarge in demand could be less favour open to profits because of the possible augment in competition, which will lead to an inevitable raise in kind resource and marketing addresss, to maintain their competitiveness. Also, the expansion of the airport itself is likely to result giving businesses the option to expand themselves, to cater for the increase in demand, and the bare-assed needs of consumers that the expansion will produce. I received answers from 10 businesses in and around the area of Stansted Airport.The range of businesses with which I made contact was variable in both type of business and location, however it is unlikely the incident of all business i s represented in these results, and therefore the primary look into is not something I can completely rely on when approach shot to a conclusion. Secondary Research This graph shows a clear rise in the amount of passengers for the next two decades, with actual numbers in 2005 reaching 228million. The growth run is actually steady with only a slight slump in the later 2020s, however the rate of increase is still good.This is an obvious good sign as the increase in the size of the market through continuous market growth gives air lanes a much larger customer base. This following graph goes back further and takes pinpoints reasons for more dramatic slumps that have occurred The only noticeable declines or backwardness down of growth are the results of specific crises, similar to and including the attack on the World Trade Centre. However the most noticeable point in decline, with the slowest return to the earlier rate of growth, is the Oil Crisis in 1973, which basically resul ted in huge inflation within the anoint industry.With the evident effect that the oil industry has on the Air Travel industry it will be important to consider its current state and future prospects. This graph clearly shows a continuous increase in the price of oil for the next decade, with no apparent evidence that it will slow down. With this increase in oil prices the Airlines variable costs are bound to increase because of their oil usage. This increase in variable costs will most likely be covered by an increase in the airlines flight prices. This table shows the price snap fastener of demand for both business and leisure time flights and overall measure.From the results we can determine that the demand for flights overall is certainly price elastic, therefore the increase in price of flights will affect the airlines sales, specifically in leisure travel. This is backed up excessively by the results of a poll stating that 78% of people consider the cost of travelling plays a part in how often they are able to visit close friends and family members abroad. However, business flights are inelastic, although sales will go down, they will not go down at a rate that would be too effective to their profits if prices were raised.Therefore Stansted should try and delineate as much of the business market as possible. Another figure of cost increase to consider is the assesses put on air travel. The administration is trying the counter the current environmental problem by placing higher taxes on air travel therefore attempting to reduce the amount of flights. This tax is set to rise soon and again almost double in 2010, and probably carry on rising. This increase in tax is likely to be passed on to passengers, therefore adding even more onto the price, on crystallize of the oil increases.The director of the Gatwick Diamond Business Association (GDBA) stated that This expansion is looking at increasing capacity by 10m passengers a stratum and that is going to bring substantial changes, meaning they could attract more business trade. This is obvious great news for Stansted, with the apparent price in elasticity of the business flights, and the increasing oil prices. He then went on to prescribe the expansion will increase Stansteds capacity by 10m a year and will therefore increase its competitiveness with Gatwick.For customers this will be beneficial as the airports and airlines may then drop their prices in format to be more competitive, and try to develop a strong understanding of brand loyalty. This chart shows the distribution of passengers flying from different airports It clearly shows that the capital of the United Kingdom airports have a large majority of the market share and with the expansion of Stansted this is very likely to become even higher, with the increased amount of destinations. Evaluation of Secondary ResearchThis research shows clearly that passenger numbers are expected to increase and that Stansted Airport s market share is very likely to rise within the growing market for air travel, specifically with the South Eastern Airports having a large majority of the market share. This increase in passengers will bring a large increase of the amount of people going to and from the airport and requiring the different services to do so and be comfortable, therefore increasing demand for many different types of business in and around the Airport, specifically from passengers flying for business purposes.Expansion at Stansted will however only have these desired effects if the airlines manage to keep their prices down, as this is evidently a price elastic business within leisure fliers who make up a large equalizer of their customers, and with the impending taxation and oil price rises they must find a way to avoid the rise in variable costs bear on their product prices too much. This is especially important as there is a lot of competition from rival airports in the same area, Heathrow and Gat wick.