THE UK AIRLINE PASSENGER INDUSTRY
Monday, November 1 2010
I. INTRODUCTION
There are many factors that affect the everyday operation of a firm in an industry. These factors are both internal and external and hence a firm will need to adjust its strategies to accommodation both. However, in this paper I will be focusing mainly on the external factors that will affect the existence of a firm in an industry. (Cyert.R.M et al, 2003)
II. DEFINITION OF THE UK PASSENGER AIRLINE INDUSTRY
The United Kingdom (UK) passenger airline industry is made up of firms such as British Airways (BA), Easyjet, Ryanair, Virgin Atlantic, Jet2, BMI, Monarch and Flybe. However, there are foreign passenger airlines such as Air Frances, Swissair, KLM, Delta Airlines, Emirates, Kenyan Airways and Iberia (UKwebstart.com, 2010) operating as firms in the UK passenger airline industry. These airlines transport passenger to and from destination in and out of the UK. Though foreign owned some of these carriers have a significant market share carrying passengers to destination in Asia, the Americas and Africa were some are major players in their domestic airline industries
III. INDUSTRY BOUNDARIES
Some UK passenger airlines such as Thomas Cook, provide currency exchange for both passengers and non- passengers alike. They also provide package holidays and have substantial influence in hotels across the global.
IV. MICHAEL PORTER’S FIVE FORCES ANALYSIS
In order to analyse the external environment of an industry I will be using Michael Porter’s five forces as a theoretical framework. This is because this theory analyses the external environment that affects the location of an industry. Theory discusses five different factors affecting the industry but I will be concentrating on three of those factors. Figure 1 below illustrates Michael Porter’s five forces.
1. Power of Buyers
The bargaining power of buyers in UK passenger airline