Five Forces and the Airline Industry
Examine the U. S. passenger airline industry using the Five Forces. Is this an attractive industry? Why or why not?
Bargaining power of customers
The US Airlines buyers have moderate bargaining power. They have a choice to switch airlines but the buyer volume is low. The buyer has good information through websites, is price sensitive, and can use substitutes. However, the buyers go in for costly airlines because of superior services especially in the business segment. There is some differentiation by way of punctuality, and on flight service. Overall the bargaining power of buyers is moderate.
Threat of new entrants:
The threat of new entrants is high. The barrier is there is high capital investment, and managerial expertise required to run airlines. New airlines in the US do not have a customer base. The access to airplanes is easy, they can be hired, the ...
This solution explains Porter's Five Forces and the US Airlines Industry. The sources used are also included in the solution.