Pestel , Swot and Porters 5 Analysis of Emirates Airlines and Cathay Pacific

3487 Words Feb 20th, 2011 14 Pages
I. Background Of Airlines Industry

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
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2. Porter’s Five Forces Analysis

It analyses the micro environment of the business i.e. its competitiveness, attractiveness and profitability.

a. Emirates • Supplier Power
The supplier power in airlines is dominated by the world’s two largest aircraft manufacturers are Airbus and Boeing. The competition between the two manufacturers is neck to neck but that would prove to be a boon for Emirates as the prices would not rocket through the ceiling. A study shows that Emirates holds 93 Boeing aircrafts and 83 Airbus units (Planespotters, 2009). In 2007, Emirates purchased 81 Airbus flights, to extend it services- however, they chose Airbus over Boeing as the latter failed to deliver its latest aircrafts on time and moreover, Airbus had quoted a good price (Barryl, 2007). The changing oil prices also have an adverse effect on the aviation industry. In a nutshell, the bargaining power of suppliers is high. • Buyer Power
There are 2 direct flights from Dubai to Hong Kong weekly, rest are 35 are via flights. Fares vary according to demand, but Emirates not being a budget airline its buyers do not really influence the price. Further more, a Travel Survey concluded that above 60% of the travellers preferred Emirates Airlines to any other international Airlines (Glass, 2008).
However, one could opt for an indirect flight if tariffs are concerned or if they wish a stop