The main supplier for airline industry is airplane manufacturers. The top two manufacturers in the world currently are Boeing and Airbus. It is hardly for airline industry to switch their supplier since suitable substitute products are not available and the switching costs is high. Most of the airline companies have long term contracts with their suppliers since aircraft are high capital products and airline companies probably have more favourable credit terms if they are not switching their supplier. Therefore, airline industry does not have bargaining power on their manufacturers as US airline companies must depend on these two companies for buying and leasing planes.
Given the fact that aircraft manufacturing industry is primarily dominated by Boeing and Airbus, they hold a higher bargaining power as a supplier. Fuel being one of the most important resource for the functioning of airline industry and due to its high pricing volatility, airliners usually make long term contracts with major oil companies giving them a high negotiating power in pricing. Labour force is comprised of highly skilled professionals and it is vital for airliners to retain them given the recent development of labour tensions over issues concerning wages and employment terms leading to strikes held by unions. All factors considered, the power of suppliers is high. Threat of new entrants The cost of entry and exiting the industry is high as it involves extensive fixed costs.
In general Airline industries continues to facilitate through international investments, various world trade and majority of tourism. The Airline industry’s over-all profits are seen mainly in their economic growth and world trade. In the 1990’s, the airline industry was struggling due the current era’s world recession and the Gulf War had effected oil prices which effected gas prices. The passenger rates of international airfares dropped substantially in 1991, the loss of travel during the Gulf War effected global tourism. The imporatance of Stakeholders in the Airline industry pays big dividends in the success of air
Company showed tremendous growth rate by growing more than 400% three year in a row and being among fastest growing 500 companies of the USA in 2005. In 2007 company sold 125 million dollar local produced clothes outside of the America. The company continued showing dramatic increase and remained as an ideal for other fashion retailing companies until 2010. From 2010 on company started losing its power and strength in the market. Moreover, company’s CEO Dov Charney was considered as unreliable and he faced harassment allegations.
When constructing trips, there are very few flexibility in the duration, timing, and flight destinations because the airline tends to be committed to operating particular flight (Roach, Petrilli, Dawson & Lamond, 2012). In particular, an airline will choose a larger layover on the ground to buffer against the risk of a late incoming aircraft or schedule a longer flight time to absorb potential delays on the taxiways. According to Novianingsih et al. (2014) the hub has a very superior flight frequency, and the flights which its departure times on the peak hours period are very sensitive to be delayed. By scheduling more for flights during a day, an airline will pay its workers more and use its aircrafts less, but passengers will also spend less time waiting at
The case revealed that JetBlue was an Airline that strategically entered the market to compete against major market leaders who in some way monopolized the market. People saw JetBlue as a less competitive airline when it first entered the market in the early 2000’s. The company quickly grew to become one of the largest players in the industry. JetBlue did this by strategically differentiating itself from its competitors through competitive rates plus value added services that attracted customers. During JetBlue 's period of growth, the company incurred several challenges, which could have possibly crippled their public perception and business model.
THREATS 1. Middle East Chaos: Deteriorating peace situation in Middle East with more wars looming ahead is going to adversely affect Airblue as it only operates in Middle East on international routes. 2. Easy New Entry: As opening up a private airline procedure (license providing) has been made easier than it has been for the past 4 years had arose the threat of new competitors. 3.
Airbus has always been labelled as inefficient in operations when compared to the rivals because of its history of delayed deliveries. Airbus has higher production costs compared to its rival. Opportunities Threats Growing demand of aircrafts over the next 20 years. With the growing Passenger traffic due to the rising middle class in the emerging nations, Airbus has a great opportunity to gain the market share. Technology Advancement can help Airbus improve on its weaknesses and faster delivery.
The airline was the largest and occupies the number one position with a market share of 28.2 per cent. Jet Airways is a major Indian airline based in Mumbai. IndiGo occupies the top position both in terms of market share and passengers carried and was considered the second largest airline in India. It operates over 300 flights daily to 74 destinations worldwide.
To get the first mover advantage Emirates seeking for underserved market and with the help of the technology it gives better service for their customers (moving to wide-bodied aircraft with 2 agsile rather than narrow-bodied aircraft with agsile). But today first mover advantage is not sufficient to making profits, because other airlines imitate the Emirates strategies to survive in the industry. It is highly challengeable to