The growing competition however does provide consumers with several choices and for Air Canada to be efficiently and constantly drawing its consumer it must offer " money for worth" deals, such as new multi-pass product, holiday packages and other promotional deals that has not yet been utilized in Canadian market. The possibility of Buyer power is moderate. Threat of New Entrants: Air Canada can be considered a fortunate airline as it does not have any major threat from new entrant stepping in Canadian airline industry due to the strict government legislation and regulations. “Even though the entry barriers for new airlines are lower in a deregulated market, still prospect of a new entrant entering the market is weak to moderate. Rivalry: The competition between Air Canada, a traditional carrier, and West Jet, low cost carrier is rigorous in Canadian airline industry.
4. Discuss the impact of any two (2) external environmental factor that challenges Ryanair company to remain competitive in the airline industry? (20 marks) Political or legal processes and legislation is one of the external environment that influence decision making made a firm that must comply with regulation which is how organization try to influence government and how government affects businesses. Among the challenges that face by Ryanair is increasing legislation in Europe that give negative impact to their business model and also increasing the cost of operation of their business. The increased cost of operation in Ryanair was adverse the aim of this company that wants to offer lower fares to their customer besides lower costs-
Also, some airport hubs cannot consolidate traffic bound for many itineraries. Having this limitation and knowing the fact that some passengers prefer non-stop flights, consideration of both hub-stop and non-stop routing strategies can be more cost-efficient than a pure hub-and-spoke network (Jeng 1987). In other words, non-stop flights are always the most desirable in terms of convenience but on the other hand less desirable in terms of price for price sensitive customers. Moreover, the stops at the hub airports increase the expenses for the airline companies due to the facility charges and landing fees. Therefore, the airlines can generate more revenue by considering these key parameters and applying best network routing
WestJet was able to remain successful amidst stiff competition from other airlines, a factor that led to other airlines trying to mimic WestJet’s culture and operations. Close competitors trying to copy WestJet’s culture would threaten their market, but Beddoe made it clear that it was impossible for the other companies to adopt their culture. Beddoe explained that it was doubtful for a company with many employees to change the mentality of everyone. From Beddoe’s statements, it is evident that the companies would have recorded lower performances due to interruptions as the companies try to adopt a new culture. The leadership of such companies would require diverting scarce resources into the culture change program.
The budget airline industry in south-east Asia has been underdeveloped because the aviation market is tightly regulated by bilateral air rights agreements. Threat of terrorism, people is afraid to fly after the September 11 terrorist attacks incident. Opportunities: Deregulation of goverment presented an opportunity for new routes and airport deals through open-skies agreements between countries, or the permission of entry of private airlines. Threats: Being a low cost airline, Air Asia is subjected to aviation regulations, government policy and government restraints, and dependent on the geography and infrastructure of Asia and travelling preferences of customers.
• In the long-haul market, Qantas faces competition from local operators in most geographical areas such as Middle East, China and India. Whereas in the medium-haul market, low-cost carriers such as AirAsia, Tiger and others have established strong market positions and continue to grow. • Fluctuating fuel price due to many factors that are beyond the control of companies negatively influence the profitability of Qantas and its competitiveness globally making airfares stalling fleet orders (Euromonitor, 2014). Together, key factors that need to be consider include PESTLE analysis that influences the airline industry is shown below. Political and legal factors Airlines operate in a political environment that is strictly regulated where government intervention over the performance of the company is necessary from time to time.
Rolls Royce’s new engine designs offered exactly that and proved to be an ‘order qualifier’. The design was an advantage for all airline companies as they could consider entering exclusive deals with Rolls- Royce for their various airline models and could possibly benefit from generous discounts as a result of bulk orders. And this in turn would lead to repeated business for Rolls-Royce giving them a competitive advantage of being the preferred engine manufacturer. (Rolls-Royce: Britain 's lonely high-flier, Jan 8th 2009) Rolls-Royce’s innovative idea of ‘Power by the hour’ is a true example of an order winner. Most airline companies try and avoid responsibilities associated with projecting costs for maintenance and equipment break down.
But their ability to be nimble, because they are a legacy carrier, it 's not as easy let 's say, as some of the smaller carriers that are out there. I do have deep insecurity about trans-Atlantic pressures because of significant capacity growth happening in flights across the Atlantic, and I believe trans-Atlantic to be their most profitable region. And then the capacity creep and the capacity expansion by Middle Eastern carriers, is something that deeply bothers me. Their pilot union agreement and what happens on a renewal in a few years also concerns me, because the last round of negotiations showed that the pilots do have the power relative to the management team and interest to the carrier. And their pension.
Organizational culture differs from a company to another, depending on the nature of work. Frequently, a remarkable diverse combination of qualities and standards, administer the cultural environment of an organization. A system of common meaning held by associates that differentiates the organization from other organizations is what we mean by organizational culture. In today 's quickly changing business atmosphere, the cultural make-up of an organization perform a decisive role the achievements of the organization to accomplish its vital targets. In this essay, the reader will be able to recognize the organizational culture of Etihad Airways, which is one of the biggest well-known airways in the airline industry.
However, the obvious significance that can be drawn from the framework is that Virgin Atlantic encounters a challenging and a competitive external environment that will affect its operation directly because it has to originate and be lean and mean in its operational capabilities and capacities if it has to endure the assault of competition. Moreover, it is relevant in pointing out that the global airline industry is in a death spiral and therefore, Virgin Atlantic needs to be ahead of their rivals to remain profitable. The attractiveness is that there is presence of threats that is displayed in the industry by Virgin competitors. However, when the threat is high, the less the industry becomes