1. 31.10.2006Airline Industry1 Competition and Marketing Airline Industry  Breunig Ulrich  Cintuglu Caglar  Yarar Deniz Introduction Airline Industry Porter‘s Five Forces BMI/BMIBaby Strategies

2. 31.10.06Airline 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

3. 31.10.06Airline Industry3 State of the Airline Industry www.britishairways.co.uk www.flybmi.com www.bmibaby.com www.ryanair.com www.easyjet.com Introduction Airline Industry Porter‘s Five Forces BMI/BMIBaby Strategies

4. 31.10.06Airline 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

5. 31.10.06Airline 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

6. 31.10.06Airline Industry6 The Porter Model: Five Forces Introduction Airline Industry Porter‘s Five Forces BMI/BMIBaby Strategies

7. 31.10.06Airline 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

8. 31.10.06Airline 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

9. 31.10.06Airline Industry9 Five Forces: 3.) Bargaining Power of Customers Quite low Differences between airplane seats? Price/Time -Cost comparison through Internet etc. www.checkfelix.at Introduction Airline Industry Porter‘s Five Forces BMI/BMIBaby Strategies

10. 31.10.06Airline 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

11. 31.10.06Airline 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

12. 31.10.06Airline 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

13. 31.10.06Airline 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

14. 31.10.06Airline 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

15. 31.10.06Airline Industry15 Thank you for your attention! Introduction Airline Industry Porter‘s Five Forces BMI/BMIBaby Strategies