CASE STUDY: The macro environment of Airbus industry and the A380 Airbus began life in the l960s as a complicated joint venture supported by various European plane makers and their respective governments, led by the French.r3 It was a political project in so for as Europe feared the near-monopoly in passenger aircraft of US Boeing corporation. Airbus sow potential for o twin-engine passenger aircraft, smaller and more fuel-efficient than the large, wide-body 747 'Jumbo' that Boeing was developing. The Airbus A300 first flew in October 1912. After o slow start, demand accelerated and A300 expanded into o series of aircraft. Airbus' success forced Boeing to develop the rival 771 twinjet, yet by the early 1990s Airbus was winning as many orders for new aircraft as Boeing.
Presently, gas prices have dropped. However, the airlines continue to pass along the fees to its passengers to increase revenue. Clearly, the fees that began originally in response to fuel prices continue to be part of the revenue generating strategies of airlines. (2) Shortage of Pilots: As baby boomers retire by the thousands, the airline industry is experiencing a shortage of pilots. Before becoming captains, pilots must earn sufficient fly hours.
JetBlue started to experience slowed growth from 2005 to 2007 in the competitive environment when major airlines start to expand their business into domestic businesses. This report aims to critically evaluate JetBlue’s current position in the Airline Industry. Attempts are taken in the next following sections to analyze JetBlue’s industry environment and SWOT before concluding its current position. 2.0 Industry Environment Analysis We can derive JetBlue Airway’s current position in the airline industry by using Michael Porter’s Five Forces model show in Figure 1. The five forces are competitive rivalry, threat of substitute products, and threat of new entrants, bargaining power of suppliers and bargaining power of buyers.
The expansion would allow for another runway to solve this problem. Capacity would increase dramatically from 480,000 take offs/ landings now, to 605,000 by 2020 and a further increase to 720,000 by 2030. However the greatest cost would be the complete destruction of Greenbelt land and Sipson Village. With the loss of the Village also comes the inevitable loss of the shops, schools and homes. Other arguments for the expansion include jobs and the increase in economy, for example the 3rd runway will boost the economy to a predicted 22 billion.
Defend your choice. At that time, Boeing’s major competitor Airbus also has a big project – Airbus 380 program which has a seating capacity between 525 and 853. This is a big threaten to Boeing. Meanwhile, Boeing wants to achieve several goals with innovation approach which are reduce cost, development time, and unique characters (fuel-saving, less time needed for maintenance, new technology). Boeing want to change the rules of the way large passenger aircraft were developed through its Dreamliner program.
Management believed they would break even on an undiscounted cash flow basis with sales of 250 planes, and could sell as many as 750 over the next 20 years! At the time, Airbus was predicting that there would be demand for more than 1,500 super jumbos over the next 20 years that would generate sales in
The Air Force Senior leaderships position was that this COTS strategy is the best way for them to obtain a huge high dollar program such as a new aircraft system. They wanted to buy this aircraft very close to being completed allowing them to save on the immense Development and manufacturing costs. Bud Bakers article tells us that this is where the problems began. The competition for this COTS aircraft system contract had seven competitors and the Air force ended
[pic] Colorado Technical University Southwest Airlines: Porter’s Five Forces Term Project - Final Professor Hanji Wu Submitted in Partial Fulfillment of the Requirements for ECON 616 Applied Managerial Economics By Larry Rodgers, Brent Packard, Leanne Marks, James Ladwig Colorado Springs, Colorado September 2012 Southwest Airlines: Porter’s Five Forces Analysis Southwest Airlines continues to show their strength in this tough industry. With the company’s main focus in keeping costs down, they are in a much better position than the rest of the airline industry in continuing to make profits during this current recession with customers being careful with their money. In fact, while most airlines strongly compete for their fair share of the market which has an impact on their ability to make a profit, Southwest’s focus has been on discovering new ways of increasing their profit. (Bundgaard, et al, 2006) Rivalry Among Existing Firms The threat of rivalry is high. Price competition has been the primary focus of the rivalry among airline companies.
This was caused partly by the high self-confidence of the top management which was too ensured that the position of GM is everlasting. This assumption was proven as incorrect. The market position of General Motors before 2009 was dominant in many, but after 2000 GM’s vehicle production was stagnating globally. Together with the fact that the automotive market was stably growing it implies that General Motors was losing its positions on all important markets relatively to other automakers. In U.S., traditionally known as the core market, GM was selling less and less cars even since 2000 (The New York Times, 2009) and lost one third of its position, covering 28,1% share in 2000 and only 19,8% in 2009 (figures for cars and light trucks sales in U.S., Canis et al.
Both companies remain in fierce competition to dominate the number one spot in the industry. Airbus has held that position since 2003. However, according to the Wall Street Journal, Boeing is threatening to take its position back and reign as number one for the first time in over a decade (Ostrower, 2013). As a duopoly, this change can prove to have a significant effect on the aircraft marketplace as well as our economy in general. As a duopoly, the entrance into the aircraft market can prove to be extremely difficult, not leaving many options for substitutes.