The UK airlines industry has over the last few years become such a competitive battleground that only those carriers consolidating stand a chance of competing. This is why mergers and acquisitions have become the norm as evidenced by British Airways merging with IAG, parent company of Aer Lingus, Iberia, Level and Vueling, and Virgin Atlantic merging with Delta. IAG is already eyeing up Norwegian. In an increasingly cut-throat and low-margin air travel industry, the collapse of Monarch in 2017 as well as BA's decision to shut down its ten-year-old subsidiary, Open Skies, is a reminder of how competitive the industry has become. While the industry is still attractive as evidenced by success of Norwegian, the high degree of competition means that it is likely to see more collapses, mergers or acquisions. This report looks at how the five forces of competition buyer power, supplier power, threat of substitutes, threat of entry and rivalry between existing firms are shaping the UK airlines industry and BA.
Pestel is only a starting point when analysing the macro business environment of firms since other frameworks such as Porters Five Forces and BCG are also used in conjunction to assess how firms such as British Airways can utilise core resouces and competencies so as to take advantage of opportunities while neutralising competition and rising threats. In this strategy report, we analyse the internal and external environment of British Airways using Pestle, Swot, Porters five forces & BCG matrix during the years 2016, 2017 and 2018.
As the largest airline manufacturer globally, Airbus has continued to experience success through the years, surpassing Boeing, and is still growing further. However, according to the findings, the company’s growth is impacted by a number of challenges and opportunities. The impact of Covid-19 is analysed too.
Porters five forces model is an environmental analysis tool that says that the structure of an industry and the ability of firms in that industry to act strategically depend upon the relative strength s of five forces: the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products and the rivalry among existing firms. The discussion below shows how each of the five forces of completion have shaped the US Airlines industry and impacted on the behavior of the various Airline companies operating in this market.
In this report, we analyze EasyJet using SWOT to gain an in-depth understanding of the company's strengths and weaknesses. We also make a summary analysis of the current threats emanating from its industry environment in the UK and EU including Brexit, unfavorable currency movements, rising labour costs and many others. The analysis then examines the external environment for positive key drivers of change in the airline industry, which may become sources of future competitive advantage.
This report uses Michael Porters five forces framework to examine Ryanair and the UK airlines industry to try and understand how the five forces are affecting the low cost airline and the impact on profitability.
In 2016, over 8,349 EasyJet flights were either cancelled, or delayed over three hours or diverted due to severe disruption by external macro factors such as strikes, severe weather, terrorist attacks, and other airport issues. The total impact of these external events on profit was estimated at £150million (Annual Report 2016). PESTLE is used in strategy to analyse the macro environment and identify how external events in the political, economic, social, technological, environmental and legal environments might impact individual organisations within an industry. Managers use the PESTLE tool as an aid when studying key drivers of change in the external environment. These key drivers of change constitute opportunities and threats for firms and PESTLE helps identify them overcome. However, PESTLE is only a starting point since other frameworks such as SWOT and Porters Five Forces have to be used in conjunction to help firms like EasyJet utilise internal core competencies (strengths) so as to take advantage of opportunities while neutralising threats in its industry.
Virgin Atlantic is a British airline carrier that is co-owned by Richard Branson’s Virgin Group [51%] and Delta Airlines [49%]. Started in 1984, it is currently the UK’s best carrier in terms of punctuality, quality and the speed of dealing with compensation claims (Morris 2016). Latest revenues for the year ending 31 December 2016 were approximately £92million on operating profits of £23 million, 0.5% increase from the previous year (Annual report 2016).
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In this Virgin Atlantic BCG Matrix analysis, we look at the most profitable and least profitable route segments operated by Virgin Atlantic across its various global markets. Such segments, referred to as strategic business units (SBUs) are often run as business portfolios. For instance, Virgin Atlantic UK, Australia or Virgin Atlantic US are separate busines units or subsidiaries run as different portfolios under the Virgin Atlantic brand. This report uses a BCG analysis to help us idenfify and study such segments.