Airline industry: analysis of five forces model of Porter

Résumé du document

Airlines are companies and their aim is to operate routes and carry passengers. We will not analyse the cargo part of the airlines here but only the passenger carrying. An Airline can be a national company (airline owned by the government of a country). It normally conducts scheduled flights but can sometimes conduct chartered ones. A regional company (airline which only conducts domestic flights between regions of a country).
A public company (airline the main shareholders of which are the public such as national or regional institutions). They can conduct all types of flights.
A private company (established on private investments).

Extraits

[...] It normally conducts scheduled flights but can sometimes conduct chartered ones. A regional company (airline which only conducts domestic flights between regions of a country). A public company (airline the main shareholders of which are the public such as national or regional institutions). They can conduct all types of flights. A private company (established on private investments). There are four types of flights which differentiate airlines: Scheduled flights Chartered flights Domestic flights Low cost flights Air travel has changed peoples' lives. [...]

[...] Some companies as Aloha Airlines went bankrupt because of the high fuel prices. In the United States of America, the fuel price at the beginning of 2008 had risen by 80% comparing to one year before. The companies have been obliged to reduce the number of flights proposed and started to sell their old planes which consumed the most. (http://www.rfi.fr/actufr/articles/102/article_67982.asp translated from French, Accessed 29th november 2008) Today the fuel price is decreasing, but the Organisation of Petroleum Exporting Countries (OPEC) has decided to reduce its production to stabilize the market. [...]

[...] LaBoussole74 website, Air France's strike well followed, http://www.laboussole74.com/rubriques_zoom.php?cat=1&subcat=4&id=8214, translated from French, [accessed 30th November 2008] 7. Kristian Hvass, Airlinebusinessmodels Website, A question of change, http://www.aea.be/aeawebsite/webrsc/resources/07_SURVEY_Model_Innovatio n.pdf, [accessed the 1st December 2008] 8. Claire Gatinois, LesEchos website, Singapore Airlines sign the 1st command for the modified A350,http://archives.lesechos.fr/archives/2006/LesEchos/19714-101- ECH.htm [accessed the 1st December 2008] 9. Notebookreview website, 19/10/2006, http://www.notebookreview.com/default.asp?newsID=3291, [accessed 1st December 2008] 10. Online Dictionnary, http://www.businessdictionary.com/definition/microenvironment.html, [accessed 1st December 2008] 11. Dagmar Recklies, themanager website, http://www.themanager.org/Strategy/BeyondPorter.htm, {accessed 1st December 2008] 12. [...]

[...] So it is a cut-throat competition among the competitors. All the companies see the low-cost rivals as their main threat. All this competition makes the market industry growth average and the customers are not very faithful to a particular company because of the different options they have in comparing prices. The Copenhagen students' survey also shows that the competition rivalry today is extending between different types of airlines: 96% of network carriers regard other network carriers as their direct competitors, followed closely by low-cost carriers, of which 66% ranked as either direct or near competitors. [...]

[...] The airline industry plays a fundamental role in globalization today, and different things such as tourism, world trade and foreign investment. However, all airlines within the industry operate in a very dynamic environment where different elements come into play such as economical, social, political and environmental issues. Both elements have an impact on the strategy decision making of the companies. http://www.investopedia.com/features/industryhandbook/airline.asp viewed the 28th November 2008). Evolution of the market The airline industry has seen its growth since the beginning of the 21st century and it grows at an average rate of a year (according to Boeing's survey http://www.boeing.com/commercial/cmo/ viewed on the 25th of November 2008). [...]