Airline Industry1 Competition and Marketing Airline Industry  Breunig Ulrich  Cintuglu Caglar  Yarar Deniz Introduction Airline Industry Porter‘s Five Forces BMI/BMIBaby Strategies

Airline Industry2 Introduction State of the Airline Industry Porter‘s „Five Forces“ model Strategies of BMI and BMIBABY Different Strategies for Diversification Introduction Airline Industry Porter‘s Five Forces BMI/BMIBaby Strategies

Airline Industry3 State of the Airline Industry Introduction Airline Industry Porter‘s Five Forces BMI/BMIBaby Strategies

Airline Industry4 Company capability profiles Fare costs Airport Tax costs (cheaper Airports of cities) Full service or No Frills Distribution (Internet/Travel Agencies) Frequent Flyer Programs Introduction Airline Industry Porter‘s Five Forces BMI/BMIBaby Strategies

Airline Industry5 Problems of Airline Industry Airline Industry is affected by many outside factors:  Oil  Terrorism  Consumer confidence  Aircraft safety …and others Introduction Airline Industry Porter‘s Five Forces BMI/BMIBaby Strategies

Airline Industry6 The Porter Model: Five Forces Introduction Airline Industry Porter‘s Five Forces BMI/BMIBaby Strategies

Airline Industry7 Five Forces: 1.) Threat of new Entrants Seems to be tough to break into Cost of borrowing (cheap borrowing leads to saturation) Brand identity & Frequent Flyer Programs Introduction Airline Industry Porter‘s Five Forces BMI/BMIBaby Strategies

Airline Industry8 Five Forces: 2.) Bargaining Power of Suppliers Dominated by Airbus and Boeing Unlikely they try to integrate vertically Today‘s news: Emirates cancelled A340 and ordered Boeing 777 Introduction Airline Industry Porter‘s Five Forces BMI/BMIBaby Strategies

Airline Industry9 Five Forces: 3.) Bargaining Power of Customers Quite low Differences between airplane seats? Price/Time -Cost comparison through Internet etc. Introduction Airline Industry Porter‘s Five Forces BMI/BMIBaby Strategies

Airline Industry10 Five Forces: 4.) Threat of Substitutes Time, Money, Personal Preference Likelyhood of taking Train Car Introduction Airline Industry Porter‘s Five Forces BMI/BMIBaby Strategies

Airline Industry11 Five Forces: 5.) Competitive Rivalry Airline Industry is fiercely competitive Growth is moderate  low returns  buyers are receiving the benefits of lower prices Introduction Airline Industry Porter‘s Five Forces BMI/BMIBaby Strategies

Airline Industry12 BMI - BMIBABY BMI: 2nd largest Airline in the UK BMIBABY: low-fares Airline Both are owned by the same company! Introduction Airline Industry Porter‘s Five Forces BMI/BMIBaby Strategies

Airline Industry13 Advantages: BMI tries to cover all customers, both business and low-cost travellers BMIBABY uses old Planes from BMI for low prices Major company has experience with Airlines Introduction Airline Industry Porter‘s Five Forces BMI/BMIBaby Strategies

Airline Industry14 Disadvantages Altough there is no rivalry, BMI might have created a competitor which costs them customers Introduction Airline Industry Porter‘s Five Forces BMI/BMIBaby Strategies

Airline Industry15 Thank you for your attention! Introduction Airline Industry Porter‘s Five Forces BMI/BMIBaby Strategies