record can offer credit terms whenever asked.

record 979
aircrafts delivered by the two aircraft majors. Other than a two and a half
month strike at Boeing in 2008, which delayed production in the fourth quarter
of the year, the deliveries have been increasing steadily in the current
decade.1

One of the way that would affect both fuel and aircrafts
is forward integration; in this case, it is low. The reason for this is that
aircraft manufactures, neither fuel providers nor technical support companies
will purchase an airline and staff it with flight attendants, commercial
pilots, and a maintenance crew and operate flights across the world requiring a
major network of resources, which most companies do not have or are not
prepared for. However, the strong position fuel suppliers and aircraft
manufacturers hold in the industry need to be taken into account when operating
an airline.2

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Labour comes third in our inputs, it is
subject to the power of the unions who often bargain and get unreasonable and
costly concessions from the airlines, plus, Strikes affect the industry
greatly.

Suppliers
provide resources to the business. For example, consider opening a restaurant.
Owner will look at suppliers of food noting their reliability, quality, pricing
and whether they can offer credit terms whenever asked. A single supplier might
stand out but multiple suppliers will compete for business and therefore will
offer better service on a reasonable price, whereas a single supplier can have
an advantage and hold business on hostage. He will also look at real estate
resources. For the airline industry, there is technical support and IT
services as well as the catering services, which is a challenge to keep. Going
back to our restaurant example, there is a switching cost if he will try to move the business from one
location to another. 3

One example
on how the strikes have a great effect, German airline Lufthansa declared
(2015) that it lost at least 10 million euros ($10.8 million) a day from the
longest strike in its 60-year history as cabin crew confirmed a fourth day of
strikes.4

General
union strike examples include, Eastern Airline Workers’ Strike (1989, U.S.) and
Alaska Airlines flight attendant strike CHAOS (1993).5

To
summarize, all suppliers have tremendous bargaining power with the airline
industry. There are few fuel providers and no reliable alternative to fuel.
There are very few pilots in the job market and planes cannot be flown without
pilots. Mechanics for airplanes are in short supply and planes cannot be flown
without being serviced. Flight attendants provide services that cannot easily
be replaced and customer satisfaction without flight attendant would be
detrimental.

We
recommend companies in the industry to take into consideration the limited
product suppliers, keeping in mind that customers behavior is highly affected
by price, which can pose a