Attractiveness of the Domestic Aviation Industry - Australia
a
Attractiveness of domestic aviation industry in Australia
[MPM703] Business Strategy and Analysis
[800351339] Ashan De Silva Wijeyeratne
[600313359] Kevin Procter
TABLE OF CONTENTS
Executive Summary 3
Introduction 4
Industry Analysis 6
Methodology 8
Results 9
Industry Rivalry 9
Competitor Analysis 9 Environmental Analysis 11 Macro Environmental Conditions 11 TASK Environmental Analysis 12
Comparative Market Positions of Regional Airlines 18
Conclusion & Recommendations 19
References 21
Appendices 22 Appendix A – Porter’s 5 Forces Model 22
Appendix B – Comparative Market Positions of Regional Airlines 23
Appendix C – Aviation Industry Time Line 24
EXECUTIVE SUMMARY
The domestic aviation industry has grown by 5.57% in 2007 in comparison with 2006 according to ABS (2008). This is a major indication of the attractiveness of this growing industry which is expected to perform better in the near future. By 2010 it is expected to grow up to 13.67% in comparison to 2006. Some of the reasons for this growth could be classified as the reduction of airfares due to increased competition, deregulation of policies concerning air travel, advancement of technology, decentralisation, expanding aviation infrastructure, less travelling time compared to other modes of transpiration, increased spending on marketing promotions by airlines.
Even though domestic aviation industry is in the growth stage of the life cycle, it is extremely difficult to get in to the market due to regulations, cost associated and competition. At present there are only 4 organisations competing in this industry, out of which Qantas has 60% of the market share. The
Attractiveness of domestic aviation industry in Australia
[MPM703] Business Strategy and Analysis
[800351339] Ashan De Silva Wijeyeratne
[600313359] Kevin Procter
TABLE OF CONTENTS
Executive Summary 3
Introduction 4
Industry Analysis 6
Methodology 8
Results 9
Industry Rivalry 9
Competitor Analysis 9 Environmental Analysis 11 Macro Environmental Conditions 11 TASK Environmental Analysis 12
Comparative Market Positions of Regional Airlines 18
Conclusion & Recommendations 19
References 21
Appendices 22 Appendix A – Porter’s 5 Forces Model 22
Appendix B – Comparative Market Positions of Regional Airlines 23
Appendix C – Aviation Industry Time Line 24
EXECUTIVE SUMMARY
The domestic aviation industry has grown by 5.57% in 2007 in comparison with 2006 according to ABS (2008). This is a major indication of the attractiveness of this growing industry which is expected to perform better in the near future. By 2010 it is expected to grow up to 13.67% in comparison to 2006. Some of the reasons for this growth could be classified as the reduction of airfares due to increased competition, deregulation of policies concerning air travel, advancement of technology, decentralisation, expanding aviation infrastructure, less travelling time compared to other modes of transpiration, increased spending on marketing promotions by airlines.
Even though domestic aviation industry is in the growth stage of the life cycle, it is extremely difficult to get in to the market due to regulations, cost associated and competition. At present there are only 4 organisations competing in this industry, out of which Qantas has 60% of the market share. The
References: QANTAS AIRLINES According to QANTAS (2008) it is the national airline of Australia and is one of the 5 best airlines in the world as voted by Skytrax JETSTAR Jetstar (2008) states that it is another low-cost airline based in Melbourne is a subsidiary of Qantas was launched in response to the threat posed by Virgin Blue Tiger Airways long term goal is not only to be the leading low-fare airline in Australia but the leading low-fare airline in Asia-Pacific (Tiger Airline, 2008). ENVIRONMENTAL ANALYSIS (Refer Appendix C – Aviation Industry Time Line) The Department of Transport and Regional Services another regulatory body deals with the consumer interest of not only the operations of these airlines but also the operations in airports (BTE, 2000). “Buyers are a strong competitive force when they are able to bargaining power over price, quality, and terms of sale or service” (Strickland, 2003) The demand for services provided by these operators is driven by: