Rivalry among Existing Firms
Rivalry exist in the airline indsutry is intense as there are several airlines operating on the same destinations around the world. They aggressively compete with each other through offering diffreent services, cut-fares, frequent flyer membership privilegesand other benefits competing to grab more custoemrs than other competitors Air New Zealand and jet start are two major domestic air transport providers in New Zealand. Although they are the two competitors in the market, they adopted different strategies. Air new Zealand focuse on customer service kiwi experiences and Jetstar intrduced a low cost business to the aviation industry. Jetstar offers lower airfares to passages not only they can book flights through the internet, but also can quickly identify the cheapest available flights. In 2006, Air New Zealand launch a new online domestic campaign called grabaseat. This campaign sees a range of low domestic fares posted daily on the carrier's website. The fares are priced below the everyday fare pricing structure.
Hence, the New Zealand public benefited from lower airfares, improved service quality, better on-time performance and more frequent services
Supplier power is high. There are three major supplers in aviation industry, aircrafts supplier, fuel supplier and Labor. According to the financial reports of air new zealand, the company spend nearly one thrid their total expenses on fuel. Aviation fuel also called jet fuel, is a speialized type of petroleum-based fuel used to power aircraft. The suppliers are the oil mining and extraction firms. because OPEC(organization of petroleum exporting countries) controls 40% of world’s supply of oil and, thus, has a strong influence on the price of oil. Volatility in the fuel prices remains one of the industry’s major challeges. Half of air NZ total asset is aircraft and accociated plant and equipment. Suppliers of aircraft are limited as far as Bowing and...
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