Analysis Of The Airline Industry
Introduction <ul><li>Deregulation in the US 1978 </li></ul><ul><li>UK and Netherlands followed with deregulation in 1984  ...
International Passengers
PEST <ul><li>Political </li></ul><ul><ul><li>Deregulation as the market increases in size, therefore economies of scale ma...
PEST <ul><li>Economic </li></ul><ul><ul><li>Decrease in passenger numbers </li></ul></ul><ul><ul><li>Competition from low ...
PEST <ul><li>Social </li></ul><ul><ul><li>From September 11 th </li></ul></ul><ul><ul><ul><li>Reluctance to fly </li></ul>...
PEST <ul><li>Technological </li></ul><ul><ul><li>Economies of scale in production due to expanding market size </li></ul><...
Five Forces Framework <ul><li>Internal Rivalry </li></ul><ul><ul><li>Price competition especially from no frills carriers ...
Five Forces Framework <ul><li>Entrants </li></ul><ul><ul><li>Since flights between countries, must have majority ownership...
Five Forces Framework <ul><li>Substitutes </li></ul><ul><ul><li>Travel by sea or land is not always convenient </li></ul><...
Five Forces Framework <ul><li>Customer Power </li></ul><ul><ul><li>Loyalty from Frequent Flyer Program </li></ul></ul><ul>...
Upcoming SlideShare
Loading in...5
×

Ip group f

803
-1

Published on

Published in: Education
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
803
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
4
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Ip group f

  1. 1. Analysis Of The Airline Industry
  2. 2. Introduction <ul><li>Deregulation in the US 1978 </li></ul><ul><li>UK and Netherlands followed with deregulation in 1984 </li></ul><ul><li>The economic boom of 1989/90 </li></ul><ul><ul><li>Followed by the recession of 1990/91 </li></ul></ul><ul><li>The airlines had a tough time in the early 1990’s </li></ul><ul><ul><li>mainly due to aircraft orders in the pipeline </li></ul></ul><ul><li>The effect of the current economic climate </li></ul>
  3. 3. International Passengers
  4. 4. PEST <ul><li>Political </li></ul><ul><ul><li>Deregulation as the market increases in size, therefore economies of scale may arise. </li></ul></ul><ul><ul><li>Liberalisation of skies </li></ul></ul><ul><ul><ul><li>Ownership rules relaxed, EU and US forcing this through increasing the size of the market. </li></ul></ul></ul>
  5. 5. PEST <ul><li>Economic </li></ul><ul><ul><li>Decrease in passenger numbers </li></ul></ul><ul><ul><li>Competition from low cost airlines </li></ul></ul><ul><ul><li>Consolidation leads to alliances rather than mergers where possible </li></ul></ul><ul><ul><li>Increase in cost i.e. Insurance </li></ul></ul><ul><ul><li>Deregulation has exposed airlines, previously operating at inefficient cost levels </li></ul></ul><ul><ul><li>Many airlines in serious financial trouble e.g. Aer Lingus, Swiss Air </li></ul></ul><ul><ul><li>Supplies also experiencing sharp downturn, e.g. Rolls Royce </li></ul></ul>
  6. 6. PEST <ul><li>Social </li></ul><ul><ul><li>From September 11 th </li></ul></ul><ul><ul><ul><li>Reluctance to fly </li></ul></ul></ul><ul><ul><ul><li>Need to rebuild confidence in air travel </li></ul></ul></ul><ul><ul><ul><li>Sub losses with knock on social affect </li></ul></ul></ul>
  7. 7. PEST <ul><li>Technological </li></ul><ul><ul><li>Economies of scale in production due to expanding market size </li></ul></ul><ul><ul><li>E-commerce method of selling tickets, therefore less infrastructure required, overhead savings </li></ul></ul>
  8. 8. Five Forces Framework <ul><li>Internal Rivalry </li></ul><ul><ul><li>Price competition especially from no frills carriers </li></ul></ul><ul><ul><li>Competition for airport landing/departure slots </li></ul></ul><ul><ul><ul><li>Therefore barriers to entry at major hub airports </li></ul></ul></ul><ul><ul><li>Passenger demand declining/static in most countries </li></ul></ul><ul><ul><li>Regulation barriers decreasing, therefore increasing competition in Europe (Ownership rules still protect to a degree) </li></ul></ul>
  9. 9. Five Forces Framework <ul><li>Entrants </li></ul><ul><ul><li>Since flights between countries, must have majority ownership or the operator in one of the two countries, threat of entry is not currently global </li></ul></ul><ul><ul><ul><li>This could change with three to five years if “open skies” agreements are brought in, therefore potential future threat. </li></ul></ul></ul>
  10. 10. Five Forces Framework <ul><li>Substitutes </li></ul><ul><ul><li>Travel by sea or land is not always convenient </li></ul></ul><ul><ul><li>Spend leisure money on alternatives or domestic holidays </li></ul></ul>
  11. 11. Five Forces Framework <ul><li>Customer Power </li></ul><ul><ul><li>Loyalty from Frequent Flyer Program </li></ul></ul><ul><li>Supplier Power </li></ul><ul><ul><li>Fuel prices are a major cost with no substitute, therefore powerful hold on airlines. </li></ul></ul>
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×