i’m really stuck on this essay in my work and lesuire module, anyway i’m awwful at essays anyway, so was wondering if anyone could help me out with this one, like where to start from and how to structure it, i can never get the endings right lol
"Discess the view that the emergence of low-cost airlines in the UK in recent years has made the amrket for air travel more efficient."
It’s the second of two kind of connecting essays, 15 marks. I don’t really know where to begin? I’m half way through the first one but it’s not really helping me with this one. I don’t know much about low-cost airlines and i can’t find all that much about it anywhere, my text books aren’t much help either.
Also, not really good with the whole discuss bit, can never seem to get the right points down n get it up to level 3/4.
Thanks
This is a question about the efficiencies of markets.
There are 2 types of efficiency - allocative efficiency and productive efficiency. Allocative efficiency is concerned with whether resources are used to give customers what they want. Productive efficiency is about lowering costs to be competitive in the market.
The key theme of the essay is that before the emergence of low-cost airlines, the airline market was relatively inefficient. the market in air travel is never going to be perfectly efficient because of the high barriers to entry (several examples), the rationing of airline slots, and co-operative arrangements between airlines (cartels). these lead to market inefficiencies.
The emergence of the low-cost airlines has dramtically improved allocative efficiency, because there has been a high up-take of their seats. This suggests that consumers are getting more of what they want than before. Secondly, the market is more productively efficient. These new airlines have diversified the market, offering more choice, and weakening the grip of the larger players. Added to that, the low-cost airlines are very price competitive, which has forced the larger airlines to cut the prices of their seats. There is evidence for this in that, the more competitive the market place, the lower and more consistent are the profits produced by the market participants.
The previous large airlines have responded in a variety of ways - there were spin-off budget airlines, there were more cut price seats, and some budget airlines were bought out, and some large airlines have gone out of business.
You could also mention that the presence of additional market players has improved the functioning of the market in terms of its key roles in rationing, signalling and incentivising (see standard textbooks for more)