Industry Analysis of Us Airlines

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MGT489 Industry Analysis of US airlines Industry Structure US airlines have been improved substantially over past few years | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013(Q1) | On-time arrival rate (% of domestic flights within 00:15) | 73.4 | 76 | 79.5 | 79.8 | 79.6 | 81.9 | 80.01 | Involuntary denied boardings (per 10000 passengers) | 1.12 | 1.10 | 1.19 | 1.09 | 0.82 | 0.99 | 1.06 | Mishandled bags (per 1000 passengers) | 7.05 | 5.26 | 3.91 | 3.57 | 3.39 | 3.09 | 3.15 | Flight cancelations (% of scheduled domestic departures) | 2.16 | 1.96 | 1.39 | 1.76 | 1.91 | 1.29 | 1.82 | Customer complaints (per 100,000 systemwide passengers) | 1.37 | 1.13 | 0.97 | 1.20 | 1.18 | 1.42 | 1.13 | A4A passenger airlines have…show more content…
Buyer Power Buyer power has changed significantly in the airline industry over the last 20 years due largely to industry deregulation and technological innovation related to the impact of the Internet. Prior to deregulation, the Civil Aeronautics Board’s control over pricing and airline routes gave the consumer very little power as it did not provide the choices of unregulated competition. If consumers did not like the prices available for air travel, they were forced to look for substitutes, none of which offered a similar value proposition as the airline industry. With the advent of the Internet as a convenient method for the average consumer to search for the lowest airfare and complete the transaction without an intermediary, buyer power has increased as a significant industry force. This trend coupled with the lack of differentiation by the consumer between air carriers has commoditized the industry and made price the most important factor impacting buyer behavior. Industry Rivalry U.S. airline industry rivalry is extremely fierce, driven by changes that have increased buyer power and the threat of new entrants. While the threat of substitutes is low and the power of suppliers has remained largely unchanged, these forces have been offset to changes in buyer power
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