Airline Industry. The Airline Industry Offers An Efficient

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Airline Industry The airline industry offers an efficient and unique service to customers. This industry is able to provide convenient transportation to people that wants to travel long distances. The airplane has been an invention that has improved the way people travel from one place to another. People has been able to experience traveling in a different way since the presence of airplanes. The airline industry has developed over time and is making it possible to travel to far places in a small amount of time. With airplanes available it is possible to visit and even do business in places that one day we thought were extremely hard to reach. The market in which the airline industry takes place is extremely competitive. The airline…show more content…
Another factor that lowers the threat of new entry is that this industry requires plane and flying experience. New airlines will have to hire and train pilots, flight attendants, baggage handlers, dispatchers, customer service and others. If someone wants to open an airline company not only he will have to invest large quantities of money to function, but he will have to dedicate a significant amount of time. The Power of Suppliers - High The power of supplier is immense in the airline industry because there are very few suppliers. Due to the limited number of suppliers, they are able to control and set the prices. For this reason there is not competition among suppliers. The major suppliers are the airplane manufacturers, and the supply business is mainly controlled by Boeing and Airbus. The fuel costs in an airline is one of the largest expenses an there is a limited amount of suppliers that offer fuel to the industry. The airline companies only have certain options when it comes the number of airports they want to service. An issue that an airline company can face is that it cannot easily switch suppliers. The reason is the switching costs, usually firms have long term contracts with their supplier and the buyout of the contract will incur in high switching cost. A problem that a supplier can come across is that the product they offer is standardized and similar
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