Pearson Edexcel Business Advanced Level Paper 3: Investigating Business in a Competitive Environment

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Read the following extracts (A to D) before answering Question 1. Write your answers in the spaces provided. Extract A Naturetrek Naturetrek specialise in birdwatching and botanical treks all over... the globe and offer professionally organised wildlife holidays. Many are in exotic locations and prices can be upwards of £3000 per person. All holidays are expertly guided by a leading naturalist. In addition, they often take an expert local guide(s). Birds, mammals and plants are usually the main focus of the tours, but they incorporate other aspects of the natural world and many tours also include cultural highlights. Source: https://www.naturetrek.co.uk/about-us/our-holidays Extract B UK Airlines in Trouble Virgin Atlantic airlines reported a £28.4 million pre-tax loss for 2017, blamed on the weak pound, which hurt demand for flights abroad, as well as increased competition in the transatlantic market — especially from low-cost carriers, such as Norwegian and WOW Air. The firm’s losses have been offset by the growth in Virgin Holidays, the tour operating arm of Virgin Atlantic Group, which grew profits before tax and exceptional items by 75.2% to £19.1 million following a change in business model in late 2015 to become direct-sale only. Virgin Holidays increased its departed passenger volumes by 4.9%, arranging 341,000 Virgin Holidays experiences for customers to more than 45 destinations. Exeter-based Flybe is a short-haul, low cost airline battling challenging conditions in the industry and has been hit with falling demand due to weak consumer confidence in the economy and rising fuel costs after oil reached $96 per barrel up 39% from last year. It recently made losses of £22m and has been put up for sale with Virgin Atlantic showing interest. Flybe has 78 planes operating from smaller airports including Birmingham, London City, Southampton and Norwich, and flies to destinations across the UK and Europe. It owns valuable landing slots at Heathrow and Manchester which Virgin could use for domestic flights. Flybe carries around eight million passengers a year and Virgin would look to attract customers into its long-haul network via Flybe's domestic routes, according to reports. Sources: https://thepointsguy.com/news/virgin-atlantic-gets-new-ceo/ https://www.expressandstar.com/news/business/2018/11/23/virgin-atlantic-said-to-be-mulling-bid-for-ailing-airline-flybe/ https://www.ttgmedia.com/news/news/virgin-holidays-75-profit-growth-confirmation-of-direct-sell-move-success--9672 Section A ANSWER ALL THE QUESTIONS PRACTICE EXAM PAPER PACK 2019 PAGE 3 Extract C Jet Fuel Costs Continue to Soar Jet fuel prices are 50 percent higher than last year, with more than half of that rise coming in the past three months, as crude oil prices reached the highest level since 2014 and mounting demand globally for air travel pushed up total fuel consumption. Assuming these trends persist, airlines could be looking at significant future operating cost increases. Yet, many carriers have still not fully embraced emerging technologies that allow them to optimize aircraft performance and reduce fuel consumption. Given that fuel constitutes anywhere from 25 percent to even 30 percent of total industry expenses, a cut of a couple of percentage points could save airlines around the world billions. More fuel-efficient aircraft are one way to save on jet fuel. Another way is to use the latest dynamic technology that enables the airline to re-calculate the optimum flight path, height and speed of flight for burning less fuel using the latest weather conditions. Source: https Extract D Virgin Atlantic Cuts Emissions by 22% Virgin Atlantic’s latest sustainability report reveals that CO2 per km travelled by passengers had been reduced by 22%, while CO2 per revenue tonne km was reduced by 17%. Airline companies have strict environmental legislation to comply with on the amount of air pollution and noise they can emit. The reductions were delivered though investments into new Boeing 787 aircraft and from 2019, 12 Airbus models will enter into service that will deliver a 30% carbon saving on each flight. Source: https://www.edie.net/news/6/Virgin-Atlantic-reveals-22--cut-to-carbon-emissions/ PRACTICE EXAM PAPER PACK 2019 PAGE 4 1 (a) Assess two benefits to a holiday firm like Naturetrek of operating in a niche market (8 marks [Show More]

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