Airline Industry Analysis

Topics: Avianca, Airline, Southwest Airlines Pages: 4 (913 words) Published: December 17, 2010
Notes for Airline Industry Analysis

This is not an exhaustive analysis. We created it for guidance during our marking, but everyone’s paper was different.

Executive Summary max 400 words; most important conclusions from the analysis. Make it persuasive. • Lose marks for not having an Executive summary

1. Industry Position
Define the business/industry, what it does, how it does it
Need to show a map of the airline flights. Second best is a description. WJ is N. America, Mexico, Caribbean and Hawaii. AC is international. You could get more detail from careful analysis. WJ does not cover Canada and the US as thoroughly as AC, for example. You could compare number of destinations served. Life cycle position – mature

Business cycle
• Revenue tied to the economy
• Fixed cost of the airplane is not tied to the economy • The financing or leasing of the airplanes. Cost affected by interest rates.

2. External Factors
Technology
• It is bought, not developed
• Airplane/jet technology improves incrementally, not dramatically. Biggest issues are getting the right size planes, and fuel efficiency. • Everyone can buy the same technology or imitate quickly; not possible to differentiate much nor to maintain a competitive advantage • Is teleconferencing a major threat?

• All the technology to serve passengers faster, more nicely. Everyone can buy it.

Government
• Extensive regulation – ownership, safety, green gas emissions • Green economy – costs and impact on bottom line. Carbon emissions and use of a non-renewable resource are the big issues. • How strict is the enforcement of the rules?

• Regulation and privatization – government helping domestic airline industry • Regulation and fees in general are a significant percentage of the cost of flying – Canada is a high cost jurisdiction. Hard to distinguish how much is tax and how much is the cost of...
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