INDUSTRY ANALYSIS Industry analysis is a study in which helps us to understand business and its

The Airline industry is a large and constantly growing industry. It facilitates economic growth, international investment and world trade and is therefore central to other industries as well for globalisation. There are various forces which lead to globalisation in airline industry. Key drivers of change are forces likely to affect the structure of an industry; sector or market. (1).

The Airline industry today offers services to nearly every place of the globe. The following economic factors that include consumer behaviour, currency rate, purchasing power of consumers, oil price plus the inflation plays key role in deriving the country’s economy. According to (Macmillan & Tampoe 2000), Airline industry itself is a leading economic force in terms of both its effects on associated industries for example aircraft manufacturing, operations and tourism. In this regard, this paper discusses the economic factors that affect the decision, the board of Air Asia needs to consider before acquiring 10 units of Air Bus model A350-1000 to increase its fleet of long haul airplanes.

The last part of industry analysis is about rivalry. In aviation industry, the rivalry is very drastic. This industry develops slowly or even stagnant and it is mature in recent period. There is no new company established in developed areas and also there is no major firm going broken. Most of survivals are big companies. All of them have abundant capital and ample operating experience and hold a relatively fixed percentage of market. In long run, the number of airline companies does not change. In another word, the cake is divided up. However, people define business with a ward, for profit. If airline companies want to share more percentage of market, they must seize other companies’ part.

Rivalry among low cost carrier industry is very high. Due to this, it is difficult to acquire high profit through market share dominance. With high fixed costs, airlines often sell unsold seats cheaply or provide free upgrades which can lead to price wars. (Hubbard, 2004). Growth in a mature industry with low growth potential can only be achieved through diversification or at the expense of the competitor. (Duritz,

American airline industry is steadily growing at an extremely strong rate. This growth comes with a number economic and social advantage. This contributes a great deal to the international inventory. The US airline industry is a major economic aspect in both the outcome on other related industries like tourism and manufacturing of aircraft and its own terms of operation. The airline industry is receiving massive media attention unlike other industries through participating and making of government policies. As Hoffman and Bateson (2011) show the major competitors include Southwest Airlines, Delta Airline, and United Airline.

Southwest’s demographic trend favors two types of travelers, the time oriented and the cost efficient travelers. The time oriented are mainly business related travelers. They are using doing a short haul type of flight. The cost efficient travelers are mainly leisure type travelers such as one’s going on vacation. Both of these travelers prove that southwest main objective is cost and time efficient traveling.

Aviation Industry plays an important role in the economic growth of anation. It not only promotes international trade but also provides an effective and fastest means of transportation across the globe. Today, in the world of globalization and cut throat competition the value of time has become more precious.

More business travelers are now traveling on low-cost airlines. Business travelers are valued due to the frequency in which they fly. Large, network carriers have traditionally served most of this market.

The airline industry has always been a fiercely competitive sector. Since the invention of low-cost carriers, also known as no-frills or

Airlines Industry is large and growing, it is also the most fiercely competitive sector. It facilitates international trade, world economy growth, tourism and international investment. The airline industry has over time with the use of modern technology been able to take advantage of the short haul, high frequency and gained a competitive advantage over other forms of travel, such as buses and railroad travel. Additionally, the airline industry still holds the market for global travel at a low cost and convenient way to travel. The aviation industry gives a good contribution to the GDP which includes the following: airline services, general aviation, civil airport operations, aircraft manufacturing, and

An Industry Analysis is used by companies to assess and understand other businesses within the same industry. It is used to gain knowledge overall about the economic, political, and market factors that help develop the way an industry is developed. Business owners are the ones mostly involved in the Industry Analysis because it helps determine a company’s success.

One of the world’s most competitive and prominent industries is the airlines industry. It generates huge amounts of income as well as employment each year. Some of the common names in US air travel service providers are Alaska, Northwest, Southwest, US airways, American etc.

Other than that, as the low cost airline in country have create many opportunity for their customers to use this airline to meet with their family or friends. For example, as a student that studied far away from their family, this type of company will be needed to enable them visit their family. It is standard that as a student, they did not have enough budgets to pay an expensive fee to book a

Aviation services and product of the firm are the play in vital roles in airline business which the firm can get more customer because the expansion of low cost airline in Asia. Moreover, economic growth in china and japan also benefit to the firm in order to sale the new services.

The airline with the largest fleet in the domestic market is Air India, but its market share of the number of passengers is low, and therefore results in a low fleet hare to passenger share ratio of 0.62. Kingfisher leads the full service carrier segment with a fleet to market share ratio of 0.95, but this also includes figures from their low cost Kingfisher Red service. Passenger market share leader Jet Airways is at 0.82 and this includes their low fare service Jet Konnect.