Philippine Airlines Swot Analysis

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. Brief background of Philippine Airlines

> Founded in 1941 and based in Pasay City, The Philippine Airlines is the country 's ultimate flag carrier and oldest airlines. The monopolization of the airline occurred in 1995 when Lucio Tan, an affluent Chinese-Filipino businessman purchased the airline and became its chairman and CEO.

. Global competition in the industry

> Threat to new entrants:

In spite of the low switching costs and the absence of proprietary goods and services, generally speaking, there is a low threat to new entrants in the airline industry. The huge amount of capital make reprisals against new entrants through a price drop. This is evident among existing companies. Despite low switching costs, customer loyalty prevails
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The difficulty of island hopping brings about the need for flying from one place to another due to the distinct geographical features of the Philippines. About 7,107 islands constitute an entire country. Supposing ships can cater to passengers and transport them to different islands, its inefficiency and instability make airplanes a more attractive way of getting around the country. The convenience airlines provide as well as the amount of travel time that it saves appeal to passengers. On the other hand, the competition of Philippine Airlines among other domestic airlines such as Cebu Pacific and Air Philippines is greater than its competition among foreign airlines. The intention of Philippine Airlines to enlarge its long-distance operations is the same intention of Cebu Pacific. Not only does Cebu Pacific look forward to expanding its long-distance operations but also both short and medium haul destinations…show more content…
The complexity of airplanes magnify competition and high fixed costs yield difficulty in forsaking the industry. Nonetheless, brand differentiation of various airlines de-escalate competition. Service differentiation, for instance, is the Philippine Airline 's trademark. Allowances for excess baggage and the hospitality of flight attendants are a reflection of the Filipino culture. The intensity of price competition is indisputable among domestic airlines such as Philippine Airlines and Cebu Pacific. The air promos and red eye flights of Cebu Pacific appeal to budget conscious passengers.

. POLITICAL

> The Establishment, Operation, Maintenance and Franchise of the Philippine Airlines is reflected on Presidential Decree No. 1590, which has been established under the regime of the former president Ferdinand Marcos. The provision of similar laws and rights for airline passengers have been constituted three years ago. The Air Passenger Bill of Rights is a product of the Department of Trade and Industry (DTI) and the Department of Transportation and Communication 's collaboration.

. ECONOMIC
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