Another contributing factor is the industry's high fixed costs. These costs increase the exit costs, which is another factor that increases the intensity of rivalry. The third major factor is the degree of consolidation within the industry. Aside from the minor carriers, there are essentially only three major discount airlines operating in the Australian market. Prior to the entrance of Tiger, the two players operated as a duopoly. Tiger increased the level of competition in the market, such that the industry is now characterized by vicious price wars. Corporate stakes can also increase the intensity of rivalry. Qantas owns Jetstar, and as the national carrier must be a major competitive force. Virgin has staked a substantial portion of its business on Virgin Blue. These two companies are highly entrenched in the market with high corporate stakes. The intensity of rivalry in the industry, therefore, is very high.

SWOT

The SWOT...
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