Airline Industry

Topics: Airline, Southwest Airlines, Low-cost carrier Pages: 3 (885 words) Published: February 9, 2014
Introduction

The airline industry offers domestic and international passenger transportation. The Demand in this type of industry depends highly on the condition of the economy, Which affects spending on business and air travel. Ryanair is one of the Europe's low-fair airline and operates more than 1600 daily flights across several countries. The business strategies adopted by Ryanair has led to the rapid growth of the company over the past few years. This report will discuss Porters five forces on Ryanair to analyze its competitive environment and the way company has adopted Pestle factors. It will also examine the major Stakeholders and factors that contributed the most to the success of Ryanair.

Porters five forces

Threats of new entrants: The entrants in a market will reduce the market share for Ryanair which will affect its profits. The threats of new entrants for Ryanair is relatively high due to low barriers to enter the market. New companies can enter the airline market by simply renting the plane. However Ryanair has a deal with Boeing and Airbus for reduced prices on 737 aircraft in bulk buying (Ryanair, 2012) therefore, New entrants will not be able to get these benefits.

Moreover, some barriers may prevent new companies to enter because there are barriers for the new companies for gaining access to the distribution channels as the local and international airports may not be able to create additional slots in their platforms for the new entrants.

Threat of substitutes: The main substitutes for Ryanair are railway network, Buses and cars. With increasing distance, flights become a more convenient way for the customers to travel, That is why people prefer faster and cheaper journey which makes the threat of substitute lower for Ryanair.

Bargaining power of suppliers: The bargaining power of suppliers is high because there are only two main suppliers of aircraft, Boeing and airbus. Ryanair use 737 airplane and can not switch its...
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