Case Study Airjet
Executive summary
This analysis indicates the structure of the airline industry according to the easyJet organization business situation in the late 1990s refer to Porter’s (1980) five competitive forces. It also demonstrates the reasons why the airline industry was attractive. Moreover, this case study evaluates the competitive advantages of easyJet.
The structure of airline industry in the 1990s analysis
Threat of entry
According to the case (Kumar & Rogers, 2001), in the early 1990s, the European government policy unveiled fresh policy to the airline industry that any European carrier can operate their business to anywhere and use any landing slots. Therefore, the highly deregulation led to the rapidly growth of airlines; meantime, a large part of new firms run the operations from the UK due to the frequently traveled. Almost all the airlines set economics of density to serve their existing networks. To ensure the successful entrance to the airline industry, every firm had excess capacity of fixed inputs. Manuel and Hugo (2006) insisted that various kinds of cost requested a high standard of capital requirement. Airport charges, aircraft ownership, labor, fuel and ground cost were the typically largest components of operating costs.
Pressure from substitute products
The European airline industry appeared many low-cost carriers to contend for the markets. Many firms had the similar target customers and their flight routes had no distinguished differences; thus, it was hard to survive in the competition. In late of 1990s, 75% carriers suffered the bankrupt; however, the growing low-cost market caused more and more new airlines try to take over a position in the carriers industry. Jones (2007) claimed that the pressure from substitute products was huge while firms select different advertising campaigns and extensive public relations strategies. New airlines not only compete with other young carriers, but also contend against the
This analysis indicates the structure of the airline industry according to the easyJet organization business situation in the late 1990s refer to Porter’s (1980) five competitive forces. It also demonstrates the reasons why the airline industry was attractive. Moreover, this case study evaluates the competitive advantages of easyJet.
The structure of airline industry in the 1990s analysis
Threat of entry
According to the case (Kumar & Rogers, 2001), in the early 1990s, the European government policy unveiled fresh policy to the airline industry that any European carrier can operate their business to anywhere and use any landing slots. Therefore, the highly deregulation led to the rapidly growth of airlines; meantime, a large part of new firms run the operations from the UK due to the frequently traveled. Almost all the airlines set economics of density to serve their existing networks. To ensure the successful entrance to the airline industry, every firm had excess capacity of fixed inputs. Manuel and Hugo (2006) insisted that various kinds of cost requested a high standard of capital requirement. Airport charges, aircraft ownership, labor, fuel and ground cost were the typically largest components of operating costs.
Pressure from substitute products
The European airline industry appeared many low-cost carriers to contend for the markets. Many firms had the similar target customers and their flight routes had no distinguished differences; thus, it was hard to survive in the competition. In late of 1990s, 75% carriers suffered the bankrupt; however, the growing low-cost market caused more and more new airlines try to take over a position in the carriers industry. Jones (2007) claimed that the pressure from substitute products was huge while firms select different advertising campaigns and extensive public relations strategies. New airlines not only compete with other young carriers, but also contend against the
References: Fabio, D 2007, ‘The European airline industry: law and economics of low cost carriers’, European Journal of Law and Economics, vol. 23, no. 3, pp. 199-221 Jones, L 2007, EasyJet: the Story of Britain 's Biggest Low-Cost Airline, London: Aurum Press Kumar, N & Rogers, B 2001, ‘easy jet’ the webs favorite airline, IMD-3-0873, ECCH Manuel, RH & Hugo, S 2006, Economies of Scale and Spatial Scope in the European Airline Industry, European Regional Science Association Porter, ME 1980, Chapter 1: the structural analysis of industries in competitive strategy: techniques for analyzing industries and competitors, New York, Free Press, pp.3-33 Ottink, F 2004, EasyJet will soon be bigger than Ryanair, Yeald