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GCE JAN 2009 : (AS 3) External Influences Business Enterprise

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ADVANCED SUBSIDIARY (AS) General Certificate of Education January 2009 GCE Applied Business assessing External Influences on the Business Enterprise A3B31 Assessment Unit AS 3 [A3B31] THURSDAY 8 JANUARY, MORNING TIME 1 hour 30 minutes. INSTRUCTIONS TO CANDIDATES Write your Centre Number and Candidate Number on the Answer Booklet provided. Answer all six questions. INFORMATION FOR CANDIDATES The total mark for this paper is 80. Quality of written communication will be assessed in questions 4, 5 and 6. Figures in brackets printed down the right-hand side of pages indicate the marks awarded to each question or part-question. This paper is accompanied by a Case Study. You must not use your own annotated copy of this Case Study. ADVICE FOR CANDIDATES You are advised to take account of the marks for each part-question in allocating the available examination time. 4319 BLANK PAGE 4319 2 [Turn over 1 Identify the market sector that Belfast International Airport operates in, explaining the role of that sector, within the Northern Ireland economy. [4] 2 Explain why globalisation is important to Belfast International Airport. 3 Discuss, with an example in each case, one way in which each of the following government policies might directly influence the commercial operations of Belfast International Airport: [4] (i) Fiscal Policy [4] (ii) Regional Policy [4] (iii) Supply Side Policy [4] 4 Analyse four different issues which are likely to affect the throughput of passenger numbers at Belfast International Airport over the next 21 years, and hence the demand for air services to/from Northern Ireland. [16] 5 Evaluate five factors which are likely to improve the competitiveness of Belfast International Airport over the 21-year period to 2030. [20] 6 The management team at Belfast International Airport has outlined its plans covering the expansion of the Airport until 2030. Evaluate how these plans might affect six stakeholder groups relative to the Airport. [24] THIS IS THE END OF THE QUESTION PAPER 4319 3 [Turn over 935-024-1 [Turn over ADVANCED SUBSIDIARY (AS) General Certificate of Education January 2009 GCE Applied Business Case Study Assessment Unit AS 3 assessing External Influences on the Business Enterprise [A3B31] THURSDAY 8 JANUARY, MORNING You must use this clean copy of the Case Study in the examination and not your own annotated copy. A3B31CSI 4319.04 Belfast International Airport A document entitled Master Plan 05/30 is a long-term planning document, summarising the key external influences which the management team at Belfast International Airport (BIA) think are likely to affect the future operating performance of the Airport over the next twenty years or so. The management team at BIA is conscious that the Airport works within a global economy. This is indeed the case within Northern Ireland, since the island location makes aviation a necessity for travel to Great Britain, Europe and beyond. The local economy includes many fast-growing sectors such as finance, advanced engineering, ICT, professional services and pharmaceuticals, all of which support a network of sustainable air services . Air travel has been made more accessible to the travelling public, through: technological advances (at airports and in aircraft), cost efficiencies (within airlines and airports), rising standards of living within the population, intensive competition within the travel industry (between other forms of transport, e.g. ferry operators), increased competition between airlines of EU member states (as a result of government competition policy). Belfast International Airport has responded to the global competition within the sector (from other airports) by providing passengers with a greater number and choice of destinations to which it is possible to fly. By the same token, such developments have increased the opportunities available for inbound tourism. During 1983, the Airport was renamed and branded as Belfast International Airport . The following year passenger numbers reached 1.5m. In 1996, TBI plc became the new owners of the Airport, by which time annual passenger numbers had reached 2.5m. easyJet plc commenced airline services in 1998 (with flights to London Luton), Continental Airlines Inc., introduced direct scheduled air services from Belfast to New York and Aer Lingus plc operates scheduled services from BIA to various destinations including London Heathrow, Amsterdam and Rome (2007 onwards). There appears to be a number of issues which have a direct impact upon the performance of BIA, as noted in the 25-year Master Plan. These include: only one access road (A57) to the Airport, connecting it to Belfast City Centre via the M2 motorway, and to the south and west via the A26 and M1 motorway, regular bus connections from Belfast City Centre (provided at Europa Bus Station and Laganside Buscentre), non-availability of a rail link to the Airport, although a rail line runs alongside the western boundary of the Airport, use of equipment which makes it the most technologically advanced airfield on the island of Ireland, ability to accommodate the largest commercial airliners currently in service, a passenger terminal building, airport parking facilities, hotel, cargo centre, administration offices and other ancillary facilities are available within the airport site, 4319.04 2 [Turn over a regional location, so that 1.6 million people live within a one-hour drive of the Airport, whilst it is estimated that over 2 million people live within a two-hour drive. In addition, it is estimated that over 80% of Northern Ireland s industrial base is located within one hour s reach of Belfast International Airport. The Master Plan 05/30 document provides the following statistical information: Table 1: Belfast International Airport Passengers 2005 millions Total number of terminal passengers (arriving/departing) 4.8 Number of passengers on scheduled services: Domestic passengers 3.4 International passengers 0.7 Charter services passengers 0.7 BIA estimates that average passenger numbers will increase to 6.9m per year by the year 2015. The management team at BIA has acknowledged the long-term issues facing the Airport which include: the strategic location of the Airport (the second largest airport on the island of Ireland), the loss of passengers to Dublin and other regional airports, including George Best Belfast City Airport and City of Derry Airport (estimated to be around 1m per annum), development of a brand/reputation enabling the Airport to become the Airport of choice in the Province, increasing the role of the Airport, facilitating economic development of the region, growth of overall share of the air travel market to and from the island of Ireland, increasing the passenger service network coverage to the domestic and international markets, improvement of air services from the business community and leisure sector, development of efficient air cargo operations for the benefit of local industry, improving accessibility to the Airport (via rail, road and other forms of transport), development of on-site facilities in order to enhance the overall passenger experience (i.e. adding value), maintaining high standards of air safety in accordance with national and international law, the imposition of air taxes on fare-paying passengers, both domestic and international, the availability of financial assistance (by government) to facilitate development of new routes for air travel, thus increasing competition. Mr John Doran, Managing Director, BIA, stated: We are convinced that ... the Airport will offer a truly competitive option within the island context for the increasing number of business and leisure travellers choosing to come to the north and the south of Ireland, as well as those travelling abroad. . Source: adapted from Master Plan 05/30 , Belfast International Airport. 4319.04 3 [Turn over 935-024-2 [Turn over

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