Swot Analysis : The Airline Industry

Delta’s Management team is seeking to strengthen the company’s market and financial position by proposing to acquire American Airlines. An assessment of American Airlines business operations, its resources and environment will identify the company’s operational and financial strengths, weaknesses, possible opportunities and threats. This will enable Delta to recognize the best strategy to create the most effective synergy for this acquisition. Evaluating the SWOT analysis on American Airlines is a core requirement and a key step to assessing the feasibility of the acquisition; detecting its operational and financial factors could have a profound effect that can assist Delta in determining the strategic direction that would be advantageous to the company.

With only a few large companies across the globe (Boeing, MD, and Airbus), the commercial aircraft industry essentially exhibits the qualities of an oligopolistic competition with intense rivalry. Here is an analysis of competition in the commercial aircraft business using Porter’s Five Forces.

The threat of new entry is high because there are no significant barriers of entry in the airline industry. For example, airplanes can be easily leased, defraying the large initial capital investment. Additionally, exit cost in the business is

Referring to the SWOT analysis, we assume the most uncontrollable issue imposed on C.P. is the circumstance of fierce competition existing in the current airline industry. Consequently, as alternative submissions, the company should remain constantly advancing new strategies, namely acquisition and introducing of a budget confederate.

Overall, the five forces model suggests that the overall intensity of competition in the airline industry is likely to be severe. Back in the early 1980 's competition was very intense. During the late 1980 's the monopolization of major routes by a few major carriers, the limited availability of free landing spots at major hubs and the emergence of limited brand loyalty and tacit price agreements have all helped reduce the intensity of competition. However, as already mentioned, slumping demand in the early 1990 's plunged the industry once more into a severe price war. Airline travel is a commodity-type product, with limited potential for differentiation.

A. Describe the environment, as viewed by Michael Porter’s model of competitive forces, that Valuejet was trying to compete in. consider competition, suppliers, customers, new entrants, substitute products? The five competitive forces that shape strategy are competition, suppliers, customers, new entrants, substitute products. Michael E. Porter demonstrates how the five competitive forces can be used in any industry. The results from all five forces not only look at the narrow aspect of competition rivals but as well as broader aspect of competitive interaction within an industry. These five competitive forces can also be used in the case of Valuejet. Competition within the airline industry is highly

WestJet Airlines is a Canadian airline that differentiates itself with their low cost flights and exceptional customer service. The company’s philosophy is “just because you pay less for a flight, doesn’t mean you should get less.” WestJet has been growing rapidly since 1996, however, they believe in growing responsibly by being cautious of their environmental and community impact (“About us”, n.d.). As WestJet has a strong presence locally, our analysis will mainly focus on WestJet’s domestic segment.

American Airlines, Inc. (AA) is a major airline of the United States. It is the world's largest airline in regards to accumulated passenger miles. American Airlines took off on April 15, 1926 when Charles Lindbergh flew a bag of mail from Chicago to St. Luis in a DH-4 biplane. A year later the first passenger flight flew from Boston to New York, heralding the real first passenger airplane travel by American Airlines. A subsidiary of AMR Corporation, the head quarters of American Airlines is in Fort Worth, Texas adjacent to the Dallas/Fort Worth International Airport. American operates scheduled flights throughout the United States and flights to Canada, Latin America, the Caribbean, Europe, Japan, the

| Weakness * The number of cancelling flights is a little high * The customer service is bad because in some occasion the customer can’t found the delta representative in the airport. * Lack of online presence * In some aircrafts the seats are uncomfortable and narrow

The risk of entry into the airline industry by potential competitors is low due to the “liberalization of market access, a result of globalization. According to the IATA (International Air Transport Association), about 1,300 new airlines were established in the last 40 years,” (Cederholm, 2016). The cost structure of businesses in an industry is a determinant of rivalry. In the Airlines Industry, fixed costs are high, because before the organization can make any sales, they must invest in air crafts, fuel and service employees. These items come attached with hefty price tags. Industries that require such enormous amounts of start-up capital as predicted by many analysts

To formulate a strategy that will help Southwest Airlines maintain its competitive edge in the US airline industry.

US Airways completed a merger in December 2013 . This merger provided much needed cash infusion into American Airlines, enabling it to emergency from

The threat of new entrants in the airline industry is very low for Virgin Atlantic, this is because the barrier for both high entry and exit barrier is very high. These barriers can stop new airlines not to enter into the industry. The entry and exit can be difficult for Virgin because there are a number of regulatory factors. For new airlines to enter, there must be large capital investment human resources that are skilled

Having conducted research on Porter’s Five Forces Model and the current business climate of the airline industry, I will be analyzing the industry using the Five Forces Model. Porter’s Five Forces model is a highly recognized framework for the analysis of business strategy. Five forces are derived from the model that attempts to determine the competitive intensity, competitive environment and overall attractiveness of an industry. The framework is based on five forces that describes the attributes of an attractive industry and suggests when opportunities will be the greatest and threats the least within an industry. The five forces include

In this paper I will be analyzing the airline industry using Porter’s Five Forces. Porter’s Five Forces is a business management tool that allows firms to possess a clearer perception of the forces that shape the competitive environment of an industry, and to better understand what these forces indicate about profitability with regard to the microenvironment. The forces include Competitors, Threat of Entry, Substitutes, Suppliers, and Customers. When firms are able to widen their conception of competition beyond their direct competitors, and consider the broader economic fundamentals of their industry, they are able to form better strategy to better optimize their profitability. The airline industry is one characterized by low