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Airline Industry <br />Ray Khorasani<br />Gustavo Garcia<br />Ernest Casiano<br />Jenna vrzal<br />
Introduction<br /><ul><li>09/11/01
$8.3 Billion loss
Government intervention
Bankruptcies
United, Delta, Northwest
 2 types Airline carriers
Major  (A.A , Delta ,United, U.S airway, continental)
Region ( Southwest, Jetblue, Alaska Air, AirTrans) </li></li></ul><li>Metric measurement<br /><ul><li>Aircraft Utilization
Load factor
Available Seat-Miles (ASM)
Revenue Passenger-Miles (RPM)
Fuel Costs</li></li></ul><li>4<br />4<br />4<br />4<br />3<br />Porter’s Five Forces industry analysis<br />5 (strongest)<...
BARRIERS TO ENTRY<br /><ul><li>LARGE CAPITAL
HIGH CONGESTION OF MAJOR    	AIRPORTS
TIGHTLY REGULATED INDUSTRY
BRAND LOYALTY</li></li></ul><li>Barrier to entry –HIGH<br />Porter’s Five Forces industry analysis<br />4<br />5 (stronges...
Substitutes <br /><ul><li>ROAD
RAIL
MARINE</li></li></ul><li>Threat of Substitutes–Moderate<br />Porter’s Five Forces industry analysis<br />3<br />5 (stronge...
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Airline Industry

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Airline industry analysis using porter's five forces

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Airline Industry

  1. 1. Airline Industry <br />Ray Khorasani<br />Gustavo Garcia<br />Ernest Casiano<br />Jenna vrzal<br />
  2. 2. Introduction<br /><ul><li>09/11/01
  3. 3. $8.3 Billion loss
  4. 4. Government intervention
  5. 5. Bankruptcies
  6. 6. United, Delta, Northwest
  7. 7. 2 types Airline carriers
  8. 8. Major (A.A , Delta ,United, U.S airway, continental)
  9. 9. Region ( Southwest, Jetblue, Alaska Air, AirTrans) </li></li></ul><li>Metric measurement<br /><ul><li>Aircraft Utilization
  10. 10. Load factor
  11. 11. Available Seat-Miles (ASM)
  12. 12. Revenue Passenger-Miles (RPM)
  13. 13. Fuel Costs</li></li></ul><li>4<br />4<br />4<br />4<br />3<br />Porter’s Five Forces industry analysis<br />5 (strongest)<br />1 (weakest)<br />
  14. 14. BARRIERS TO ENTRY<br /><ul><li>LARGE CAPITAL
  15. 15. HIGH CONGESTION OF MAJOR AIRPORTS
  16. 16. TIGHTLY REGULATED INDUSTRY
  17. 17. BRAND LOYALTY</li></li></ul><li>Barrier to entry –HIGH<br />Porter’s Five Forces industry analysis<br />4<br />5 (strongest)<br />1 (weakest)<br />
  18. 18. Substitutes <br /><ul><li>ROAD
  19. 19. RAIL
  20. 20. MARINE</li></li></ul><li>Threat of Substitutes–Moderate<br />Porter’s Five Forces industry analysis<br />3<br />5 (strongest)<br />1 (weakest)<br />
  21. 21. Buyers<br /><ul><li>Deregulation
  22. 22. Technology
  23. 23. Customer loyalty</li></li></ul><li>Bargaining power of buyer–HIGH<br />Porter’s Five Forces industry analysis<br />4<br />5 (strongest)<br />1 (weakest)<br />
  24. 24. Suppliers<br /><ul><li>Degree Differentiation
  25. 25. Airline Manufacturer
  26. 26. Jet fuel
  27. 27. Labor
  28. 28. Substitute
  29. 29. Switching cost</li></li></ul><li>Bargaining power of Suppliers–HIGH<br />Porter’s Five Forces industry analysis<br />4<br />5 (strongest)<br />1 (weakest)<br />
  30. 30. Competitive Rivalry<br /><ul><li>Crowded, 34 U.S based companies
  31. 31. Intense price competition
  32. 32. Slow Growth rate
  33. 33. High fixed cost
  34. 34. low marginal cost</li></li></ul><li>Competitive Rivalry<br /><ul><li>High exit barrier
  35. 35. Low product (in this</li></ul> case service) differentiation<br /><ul><li>frequent flyer programs </li></li></ul><li>Degree of competitive rivalry –HIGH<br />Porter’s Five Forces industry analysis<br />4<br />5 (strongest)<br />1 (weakest)<br />
  36. 36. Accounting<br /><ul><li>Aircraft Utilization
  37. 37. Load Factor
  38. 38. Available Seat-Miles (ASM)
  39. 39. Revenue Passenger-Miles (RPM)
  40. 40. Fuel Costs</li></li></ul><li>
  41. 41.
  42. 42. Summary<br /><ul><li>Barrier to entry –HIGH
  43. 43. Threat of Substitutes–Moderate
  44. 44. Bargaining power of buyer–HIGH
  45. 45. Bargaining power of Suppliers–HIGH
  46. 46. Degree of competitive rivalry –HIGH</li></ul>Overall NOT attractive Industry<br />

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