New Airliners Entering the Industry
It is also important to look at the geographic areas that an airline targets. Obviously, more market share is better for a particular market, but it is also important to stay diversified. The Groups network will be further streamlined, with a focus on business destinations. The network will be adapted to facilitate profitability by closing unprofitable routes and will be dimensioned according to the needs of business travelers.
In order to secure a more competitive approach and in response to the current global environment, the Scandinavian Airlines System (SAS) group launched Core SAS earlier this year. Now a simplified and smaller SAS will continue to focus on the Nordic air travel market as well as business traveler SAS has stated that it wants to become a “more focused and less complex company” concentrating on the Nordic market, business travelers, “efficient” organization, reduced costs and a “strengthened capital structure.”
External analysis –Porters 5 forces
Threat of New Entrants
If borrowing is cheap and access to bank loans and credit is available, then the likelihood of more airliners entering the industry is higher. The more new airlines that enter the market, the more saturated it becomes for every player. An airline with a strong brand name and incentives can often lure a customer even if its prices are higher.
Power of Suppliers
The airline supply business is mainly dominated by Boeing and Airbus. For this reason, there isnt a lot of cutthroat competition among suppliers. Therefore, there is a strong power from suppliers.
Power of Buyers
The bargaining power of buyers in the airline industry is quite low. If the industry has been able to create switching costs, that gives