The competition challenges between the European airlines and the Gulf airlines and the strategies to implement in order to better face this competition

The purpose of this Master’s Thesis is to analyse the challenges faced by the major European airline groups due to competition from the Gulf carriers. The analysis focuses on understanding how the three main airlines operating in the Gulf region (Emirate Airlines, Qatar Airways and Etihad Airlines) have developed firm specific advantages that have put significant pressure on the European traditional carriers. Furthermore, the analysis observes and questions the response to this competition from the European carriers. The Thesis is split in two parts, the theoretical part, which consists in a literature review and the practical part, which consists in a case study based on one of the strategies implemented by the three major European groups to challenge the Gulf carriers. By analysing the case of the long-haul operations of Eurowings, the analysis questions the viability of the long-haul low-cost model when the variables of fuel costs and passenger load factors are changed and outlines the weaknesses of that strategy. The analysis concludes that despite the competitive advantage developed by Gulf carriers, the European carriers still have means to face that competition if innovation in their network architecture is strategically implemented.