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Airline Industry
Porter's Five Forces
Porter's Five Forces: Airline industry
Threat of new entrants
A number of new, low-cost carriers have entered the airline industry in the wake of deregulation of the airline industries, including Southwest, Jet Blue, and Spirit Airlines. At present, barriers to entry within the industry are higher than, for example, entering a small, local pizza market. But barriers are lower than before and recent "congressional mandates aimed at increasing competition at highly concentrated major U.S. airports...required airports above certain concentration thresholds to take concrete steps to ease and encourage new entry and expansion by smaller airlines, primarily by increasing access to airport facilities" (Snidery & Williamsz 2011:1)
Power of suppliers
The power of suppliers is relatively limited, mainly "Boeing and Airbus. For this reason, there isn't a lot of cutthroat competition among suppliers. Also, the likelihood of a supplier integrating vertically isn't very likely.In other words, you probably won't see suppliers starting to offer flight service on top of building airlines" (The industry handbook: The airline industry, 2012, Investopedia).
Power of buyers
The power of buyers has significantly increased in recent decades. Online travel websites enable buyers to search for the lowest fares possible. Power is influenced by buyer's flexibility regarding destinations and time windows for departure and return flights.
Availability of substitutes
For a traveler, particularly an international or business traveler, few substitutes exist that are as fast or as convenient as air travel.
Competition
Competition between carriers has increased substantially. Loyalty to rewards programs has also decreased, and consumers are more price-driven.
Spirit Airlines: Resource-Based View of the Firm
Valuable
Spirit Airlines positions itself as a low-cost airline in a price-conscious market. Spirit Airlines flies to destinations in North America and the Caribbean islands. Its major….....