There is a Porter’s model of Five Forces used by companies including the airline industries and these are Rivalry among existing competitors; The power of customers; The power of suppliers; Threat of market entry and Threat of substitutes. 

The airlines which are big for using a pretty high level of profit which are suggesting that there should have some obstacles for gaining entrance for the substitutes and for getting nothing running into a competition. In the past few years, the new companies have faced a large amount of loss in the factor of profit.  For that reason, the competition has been reasonable in the past few years.
 

2.1 Rivalry among existing players

The last thing are remains that the rivalry which among the players who already exist. The rivalry is very intense in term of the industry of airlines. Stagnant, is the word which will be suitable for using for this industry. It hovers in a cycle of business. There are a good number of competitors who stay in run and seem to be capacitated in an over manner. The costs which are fixed are very much high in this industry. It is hard for any company to leave this industry as there is a high amount of agreements and investments spent in for staying to run business.  The products such as services to the customer are very much high in price and cannot be left. The competition sometimes get to be in a less form for the need of identity by different small companies. An example of this would the company named Jetblue is renowned for its operation and for its low prices in the southwest region. A company which has its own part of the market along with a good market share can be equally distributed because of the costs which swings and none of the companies are capable of holding a large part of the market (Parnell, 2010).

Another factor which is considered is related to the bargaining power of the suppliers. In this case, the main suppliers can be identified as the manufactures. Boeing and  Airbus only two of the manufactures running in this modern world. In this modern world, the inputs are tackled in a very standard note. Some manufactures are now aiming for being more and more eco-friendly.

There are some particular costs which are fixed and very high in terms of setting up an airline company. There should be planes which have to be bought along with training staff and many more. Because of this reason, the new companies have a high rate of costs for establishing their company and to compete with the old ones. Despites all these reasons, still some new companies who have entered this industry such as Easy Jet, Rynair and many more. It may therefore be cheaper to purchase tickets from the new company.  Any new company entering the airline industry will naturally offer cheaper prices in order to build up a list regular clienteles. But there strong loyalty lies in some companies like British Airways who spend a lot of money in the promotion and advertising. So, now new companies therefore a higher amount for marketing their services.  This can be counted as a sunk cost because the money spent in this case cannot be recovered. This implies that the new companies can lose a lot of money as they take a huge risk. That will ultimately make the market less contestable. There is another obstacle known as vertical integration stages. It is much harder for the new companies for achieving different slots of landing in the airports. The new companies can get the slots of shorter runways at airports (O’Regan & Ghobdian, 2002).

 

 

·         They have an issue regarding poor satisfaction level of their employer’s in some cases

·         There is a certain lack in the reliability which results in high amount of baggage lost

·         Their innovation process and changing criteria is pretty slow

·         There are some issues in terms of the revenue sources which are reliant

·         They should grab the opportunity as there is less geographically pressure in terms of less restriction in the Europe

·         In terms of the recession factor people are not just going to spend their money 

·         The market is emerging in order to expand and the survival of the company.  There is scope of more growth in this emerging industry (Cinquin & Tenucci, 2010)

 

 

 

Apart from all these British Airways has some other capabilities for which customers scrutinize. The premium services which are offered by them can be shown as:

 

They certainly have some resources which are both tangible and unique and these can be described as: 

 

Porter’s five forces have been done in respect of many things but at all times keeping in mind the airline industry. It can be said that British Airways approach to business demonstrate they continue to thrive which shows they are certainly running on the perfect track to achieve their ultimate goal.  

Whatever British Airways have as their ultimate goal for customer services, it can be that other airline industries are using this as a goals to improve their services. British Airways has become a role model to other airline industry

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