Airline Porter's 5 Forces Analysis

790 Words 4 Pages
“The Industry Handbook: The Airline Industry” could not put the aspect of the airline industry better. There is a lot of competition on airline market. During the recent years there were some events that were no good for this industry therefore it affected the domestic and international services. Before most of the airline industry was owned by government and it still is in many countries but all of major airlines in U.S. had become privet.
The substantial impact on airline industry has route structures, technology, airport capacity and costs of the physical aircraft but there are other more important issues that we can’t control like:

- weather which is changeable and unpredictable because of it many flights can be canceled and the airports shutdown then the airline’s money will be lost;
- fuel cost according to the Air
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Threat of New Entrants. If we look at the airline industry the first thing we would say that it is hard to break into but that is not the complete truth. In the era of easy bank credits and loans the borrowing of the money is cheap so thanks to that more of the airlines can possibly enter the market. Filled airline market means more customers as well. The brand name and frequent fliers programs also bring a big impact on the industry. No matter the price an airline with that made their brand name strong can still be more attractive for customers.
2. Power of Suppliers. There are two main suppliers of the aircraft which are Boeing and Airbus. As we can see there is no competition between them. We don’t have to worry about suppliers that are offering flight service besides building the craft.
3. Power of Buyers. In the industry the bargaining power of buyers is quite low. There are also high costs in cases of switching airplanes. There cannot be competition between the services as well because the seats in economic class are all the same in terms of comfort no matter the

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