Industry Analysis
An industry analysis was performed to assess the budget airline industry.
1. Bargaining Power of Supplier
Overall, power of supplier is high as there are limited (availability of) suppliers (only Boeing and Airbus), the switching cost is high (i.e. airplanes and their maintenance are costly), and there are few substitutes for airplanes (i.e. air travel covers longer distances in a shorter period of time).
2. Bargaining Power of Buyer
As there are almost no switching costs for customers switching from one budget airline to another, the bargaining power of buyer is moderate...Read more>>
An industry analysis was performed to assess the budget airline industry.
1. Bargaining Power of Supplier
Overall, power of supplier is high as there are limited (availability of) suppliers (only Boeing and Airbus), the switching cost is high (i.e. airplanes and their maintenance are costly), and there are few substitutes for airplanes (i.e. air travel covers longer distances in a shorter period of time).
2. Bargaining Power of Buyer
As there are almost no switching costs for customers switching from one budget airline to another, the bargaining power of buyer is moderate...Read more>>
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