Competitive Analysis of Airline Industry using porter five forces model by topnotcher

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									                Competitive Analysis of Airline Industry
                      Using Porter’s Five-Forces Model




Rivalry within the Airline Industry:

Rivalry exist in the airline industry is intense as there are several airlines operating on the same
destinations around the world. They aggressively compete with each other through offering
different services, cut-fares, frequent flyer membership privileges and other benefits competing
to grab more customers than other competitors.



Threat of New Entrants:

Airline Industry is a business which requires huge setup thus large investment, in old times this
industry might have a very less threat but today banks has increased possibilities of new entrants
through offering long term loans on less interest to business sectors which obviously increased
the threat of new entrants for the existing airlines.



Threat of Substitute Products:

Airline is the fastest way to travel from one origin to another thus there is no Perfect Substitute
available. However, considering Domestic Airlines, there are options available to the customers
like trains and by-road arrangements but again time consumption and convenience are the factors
which discourage customers to adopt any one of these two options. Cost of Air Travel however

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is a barrier which let customers to think to take other available options. International Carriers
have a very less or no threat regarding other options.



Bargaining Power of Suppliers:

Suppliers of Airline Industry are limited as far as Boeing and Airbus manufacturers are concern
there are fewer number of suppliers thus there isn’t any cutthroat competition among them which
left less opportunity for bargaining for the industry and therefore is a threat for the industry.



Bargaining Power of Customers:

Customers have some chance to bargain in Domestic Airlines as the competition is quite high in
domestic airlines however on international routes there are less options of bargain.




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