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Airline

In: Business and Management

Submitted By binai
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The Airline Industry In this brief report I will be analyzing the airline industry up to date and I will also look at various aspects including Porters five Forces diagram, key customers and products of the airline industry. The reason for analyzing this brief report is to give the reader with a wider knowledge of the topic. The porter five forces model can be used to assess the competitiveness of the
Airline industry. It can also review the competitive within the industry, it also checks for the threat from outside.

Key points of Porters five forces model:
• Supplier Power: The power of suppliers to drive up the prices of your inputs. Supplier power is reasonably high in airline industries because of the specialist nature of the goods required
• Buyer Power: The power of your customers to drive down your prices. The bargaining power of buyers in the airline industry is quite low due to the high cost of switching planes.
• Competitive Rivalry: The strength of competition in the industry. Highly competitive industries generally earn low returns because the cost of competition is high.
• The Threat of Substitution: The extent to which different products and services can be used in place of your own. Substitutes to the airline industry only carry a small level of risk to existing companies within the sector.
• The Threat of New Entry: The force of new entrants is relatively low in the industry. The ease with which new competitors can enter the market if they see that you are making good profits and that reduces your prices down. ( Mindtool, 2010)
Size of industry Increase at an annualized rate of 2.9% to $636.0 billion over the five years to 2012. Industry revenue is expected to experience more stable growth during 2012 compared with the past five years, with revenue estimated to grow 5.0%, the total number of passengers flying in 2009 reduced...

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