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If they had one , the seatbelt sign would probably stay brightlylit all the time at most corporate headquarters of major U.Sairline companies! the airline industry remains one of the mostturbulent industries in the business world, even today.
Deregulation in 1978 totally restructured and revamped the airline industry. Before the industry deregulated, the airline were assigned routes and fares and healthy profits for all competitors were practically guaranteed.But with deregulation came the fierce,free-for-all competition that a deregulated market was designed tofoster.However, now, even after over 18 years under regulation ,the shake-out period still seems to be plaguing the industry.
Consumers who because of the more competitive environment were supposed to benefit through lower prices and more air accessibility find themselves frustrated with numerous hassles delays and waiting as they travel.Many complain that theairline companies don't care anymore about their customers .For instance; when airlineemployees go on strike or engage in a labor slowdown the consumers complain that they are theones to suffer.This situation has led to consumers having little faith and trust in theairlines.To achieve and keep customer satisfaction high then the airlines have to work doublyhard. Needless to say the airlines haven't exactly had a turbulence freeenvironment within which to operate their businesses.Competition with in the deregulated industry is fierce And that competition is coming not only from domestic airlines but to anincreasingly larger extent from global ones as well. Employees want more pay and benefits eventhough costs have to be strictly controlled in order to stay competitive Costs have tobe watched carefully and even when the airlines do that profit convenient travel times and locations and hassle free service.There's even upstart new-typically low cost and low-frill airlines to deal with. It's enough to make any sane manager fasten that seatbelt a littletighter!
QUESTION:
Use porter's five-forces model to do a competitive analysis of the airline industry.
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