Airline Industry

Topics: Airline, Porter five forces analysis, Qantas Pages: 7 (2178 words) Published: September 16, 2013

Competitive Analysis
Course Code: BUMKT5922
Lecturer : Ajay Kumar
Students:
Mohammad Habibollah Khan
Fadak Khodor
Oweis Khan
Setareh Mirshamsi

Table of Contents
Table of Contents2
Introduction3
Body4
Comprehensive Porter's 5 forces analysis5
The rivalry among existing players: Medium to High5
Bargaining power of Suppliers: Medium5
Threat of Substitutes: Low5
Threat of new entry: Low6
Bargaining power of Buyer: Medium to Decline6
Conclusion7
Table of Porter's five Forces……………………………………………………………………………………………………………………………………………………………………………………8
Bibliography13

Introduction

The Qantas group operates international and domestic air transportation services for leisure and business traveling, freight and logistics services .It is also provides support activities including information technology, catering ground handling, engineering and maintenance. Qantas with its dual strategy brand Jetstar flies now to more than 173 destinations in 42 countries and operates a fleet of 246 aircraft. The objective of this airline is to operate a 20-strong airbus 380 fleet by 2015.The group is also a part of the world global marketing and code-sharing alliance, which consists of 11 leading airlines. Qantas’ stakeholders are its shareholders, employees, customer, business partners and the community. Indirect stakeholders include the media, governments and non-government organizations. They all have a major influence on the business, its strategy and therefore its performance. It is to mention that Qantas group is in the unique position of having two outstanding and well established brands in both the premium and low fares categories with Qantas and Jetstar, which makes it a magnitude rival for Singapore Airlines. The headquarters of Qantas is located in New South Wales, Australia. It is split up into three main branches which include the Flying business, flying services Businesses and the Associated Services. All departments of this group have focused on one goal and that’s nothing except ensuring high quality service in most efficient way. But they long term purpose is to operate the world’s best premium airline, Qantas, and the world’s best low fares carrier, Jetstar.

Body
Comprehensive Porter's 5 forces analysis
Nowadays, Porter’s Five Forces model is the most important force which affects the Airline industry, especially because the market is completely saturated. There are more service providers than needed in both local as well as international markets (GreenBb, 2008). The airlines continuously compete against each other in terms of customer services, technology, prices, in-flight entertainment, and many more areas (GreenBb, 2008). Actually, Porter’s Model is a business strategy tool which is used to analyze the competitiveness and attractiveness of the airline industry of which Qantas operates. It is considered as an important part of planning tool set (Kawatra, 2013).Its analysis consists of 5 fundamental competitive forces:

The rivalry among existing players: Medium to High
Qantas is faced with competition within the domestic airline industry in Australia from Virgin Blue and Tiger Airways and international competition from all major airline operators including British Airways and Deutsche Lufthansa (all three airline operators are national flagship carriers). The fierce rivalry has resulted in high cost of competition, lower profits and slow market growth. Bargaining power of Suppliers: Medium

The main factors which determine the bargaining power of suppliers include switching costs, substitute suppliers, threat of backward and forward integration and supplier concentration. The airline supplier market for aircrafts is very concentrated as there are two main suppliers, Boeing and Airbus. Their bargaining power is high in this industry (GreenBb, 2008). This restricts Qantas, along with its competitors, from exercising control over their suppliers to generate higher profit. Threat...

Bibliography: GreenBb. (2008). Industry Analysis.
Kawatra, P. (2013, january). Porters Five Forces Model. Retrieved from http://www.studymode.com/course-notes/Porters-Five-Forces-Model-1340484.html.
Q.G. (n.d.). The Qantas group international and domestic air transportation services. Retrieved from http://www.ukessays.com/essays/management/the-qantas-group-international-and-domestic-air-transportation-services-management-essay.php.
xiamichael. (2012, June). Qantas 5 Forces. Retrieved from http://www.studymode.com/essays/Qantas-5-Forces-1021718.html.
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