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The rise of sky europe2008
1. Game theory
Core assumptions
- I’m in the arena for my own benefit
- Interdependant relationship with other
competitors
- Aware that we are dependant upon each
other
2. A
heavy marketing low marketing
heavy 5, 5 12,2
B
Low 2,12 9, 9
3. The Rise of SkyEurope
(what is more rational than a pricefighter in a low cost
country)
4. The first price fighter airline in
Central Europe
6 september 2001
Slovakia has their
own air carrier
5. 6 September 2001 – SkyEurope Airlines was registered
11 September 2001 – World Trade Centre in New York
became a heap of rubble
The biggest crisis in the airline industry followed
How would you feel standing in the shoes of C. Mandl
and A. Skowronek?
6. Good idea to stop
Save yourself going bankrupt
Save your name
Try again in 5 years time
7.
8. The 11 Sept. attacks were a blessing in
disguise
Aeroplanes became cheaper to buy
Pilots were cheaper
Slots were available at the main European
airports
ABN Amro wanted to finance SkyEurope
10. What was happening in the
“air transport” industry
Aeroplanes became cheaper
(supplier power)
Pilots became cheaper
Slots were available at international airports
like Schiphol and Orly (competitive rivalry)
Demand diminished due to fear of flying
(buyer power)
Rail, ship and road transport grew
(substitutes)
11. Threat of Entry (barriers)
Economies of Scale – decline in unit cost of airtransport
as the absolute volume per period increases
Product differentiation – being the first, brand
identification, customer loyalty
Capital Requirements
Switching costs – one time costs facing the buyer of
switching from one supplier’s product to another’s
Access to distribution channels
Cost disadvantage independant of scale – locations,
govt. Subsidies, experience curve
Government policy
12. Why start in Slovakia?
after the split of Tsjecho-Slovakia in 1993, there
was no national airline
this meant no competition in the market (easy
startup)
there were no connections with main European
hubs like Amsterdam, London and Paris
no connection between Bratislava and Kosice
(2nd city) while there was a demand
Bratislava is 50 km. From Vienna (big flow of
customers from Austria)
