Question

Provide an analysis regarding the opportunities in the Airline Industry. Using your analysis of the industry, prepare a thorough list of opportunities in the industry. For example, weak competitive rivalry would be an opportunity in the industry. Be sure to explain why each is an opportunity for the industry.

Answer 1

SOLUTION :

New entrants to the airline industry pose a very low threat to JetBlue. First, the barriers to entry are remarkably high, as several airplanes are required to compete in the airline industry. Operating costs are massive and there are major government regulations for companies in the industry. Therefore, it is safe to say that the threat of new entrants in the airline industry is low as barriers to entry are high.Many of these are owned by independent companies, but have been contracted out by the major carriers and carry the names like "US Express." These companies focus on connecting from smaller airports to the major airlines hub locations, helping to expand travel availability for the larger airlines. The major change in this sector is stemming from the regional jet phenomenon. Encompassed with the extreme costs facing major airlines it is a true fight for their life. Labor is the key to these companies as their costs are accounted for on average of 40% going to labor.  Despite the bleak look for the industry, there is hope on the horizon. The key is in proper strategic management of their assets, cash flow, labor, and scheduling. The industry is already seeing an increase in travel that is expected to continue. Unfortunately due to the many factors from terrorism to government regulations clouding the view, it is tough to make sound predictions for any specific airline.