Together with your peers for this discussion, consider how European Airline
Industry companies compete.
First, list a range of them - big and small
1- Ryanair1
2- Lufthansa Group2
3- International Airlines Group3
4- Air France-KLM4
5- easyJet5
Use 5 Forces to critically analysis the relevant industry wide
factors faced by the airline industry today.
1- Power of Buyers: Overall, the bargaining power of buyers has
an extremely low threat in this industry.
Because many customer choses the certain company regarding
to your destination or regarding to low costs, there are a certain
clients have a loyalty to x company but we can’t make any
effects on the whole industry, also the other customer looking
for security issue or safety issue.
2- Bargaining Power of Suppliers: Most Airline company have
long-term contracts with their suppliers. So all company have a
long term contracts with their suppliers, for example The
amount of money and expertise needed to make even one plane
is around 200 million dollars, therefore any company need a
huge budget to enter this industry.
Based on these things the bargaining power of suppliers has a
low threat as well.
3- Threat of New Entrants: Existing force have a large cost
advantage. This industry requires a large amount of capital and
without a strong customer base there will be little to no profit in
the first few years. Existing firms can and will use their high
capital to retaliate against newer firms with whatever means
necessary such as lowering prices and taking a loss.
4- Threat of Substitutes: Planes are by far the fastest form of
transportation available so the time is the main costs for the
major people, but if the customer choses the other
transportation such as car or bus, if the customer prefer the low
costs may be we can consider this forces a very raises the risk.
5- Rivalry among Existing Players: The industry is currently
very stagnant. It seems to be in the mature stage of the business
