Part 2 of the assignment looks inside at the airline you have chosen to analyze. It considers both the strategy of the firm, as well as the resource base the firm draws upon. The specific questions yo

The aviation industry is an essential part of anyone who wants to travel long distances.

Southwest Airlines' 2019 Annual Report describes the industry in the 10-K category: "The

aviation industry has always been very challenging (Rotondo et al. 2019) and, among other

things, highly competitive, highly taxable. The airline industry is also under attack; most are

natural disasters such as natural disasters, extreme weather, acts of terrorism, government

closures, unplanned reforms, and the economic downturn (B üyüközkan et al., 2021). Raza et

al. (2020) 2019, the industry costs more than $ 2.7 trillion. Thongkruer & Wanarat (2020),

airlines will provide more than abillion passengers in 2019 on international and domestic

flights in the United States.% Since 2017 (Thongkruer & Wanarat 2020). The aviation

industry is an essential part of the growing American economy. There are currently four US-

based airlines with a market share of more than 10% each: United Airlines (14.3%), S

Southwest Airlines (16.8%), Delta (17.3%), and American Airlines (17.8%) (Bakir et al.,

2020).

The US aviation industry costs more than $138 billion, generating revenue by filling

passenger seats on airplanes (Augusto et al., 2019). Tian et al. (2019), there are

approximately 1,700 XNUMX businesses in this sector trying to fill the aircraft to exceed

their fixed travel costs. Over the past five years, the industry has grown, with an annual

turnover of 0.3%, reaching more than $ 138 billion (Amankwah-Amoah 2021). Rising fuel

prices increased travel home, and available income led to more per capita payments. All of

these factors have contributed to the growth of the domestic aviation industry.

Currently, as the industry relies on passengers to fill airplane seats, COVID-19 has

impacted the sector (Tahanisaz 2020). There have been government restrictions on travel due

to the virus and slow travel due to local and state laws. Therefore, the industry was not

producing the expected revenue. Today, the aviation industry generates $ 1.7 billion in

economic activity, supports the local economy, and creates ten million jobs (Vojtek &

Smudja 2019). The industry is expected to grow over the next five years, and COVID-19 is

finally regulated, demanding deferral, technological advancement, and stable prices for jet

fuel for reimbursement (Rotondo et al., 2019).

The current market structure of the US aviation industry is undoubtedly an oligopoly

(B üyüközkan et al., 2021). The previous section states that the US aviation industry is

controlled by at least four major airlines: United Airlines, Southwest Airlines, and American Airlines, Delta. Although these are not the only aircraft, they contain an important market

segment that offers competitive advantages (Raza et al., 2020). In the past, the US aviation

industry was regulated by the Civil Aeronautics Board or CAB. Thongkruer & Wanarat

(2020), in 1978, the board was dissolved, leaving the aircraft independent in decision-making.

Four major companies have been slowing down the aviation industry, filling more and more

airline seats, and eliminating unprofitable flights (Bakir et al., 2020).

While most would say that the American aviation industry is an oligopoly, some

would argue that the industry could be described as a wagon. Augusto et al., (2019), US.

Richard Blumenthal of Connecticut states that airlines do not promote the development of

small, international, and domestic airlines. In 2015, the DOJ launched an investigation into

the US aviation industry regarding the top companies that could meet and share strategies

(Tian et al., 2019). Since the start of the research, no one has been illegally employed.

The future of the US aviation industry is uncertain. Amankwah-Amoah (2021) says

the US aviation industry will be apure "oligopoly." Although the COVID19 virus was spread

earlier, it shook the aviation industry (Tahanisaz 2020). Vojtek & Smudja (2019), TSA

calculated the decline of more than 87% of travelers in the USA, and more than 90% of

flights have been suspended. This leaves small airlines with the option to do so because the

chances of living independently are very slim. They have to choose whether to leave the

market or sell it to larger companies (Rotondo et al., 2019). This Act alone may allow large

airlines to receive ahigher market share than they already have.

Porter's Five Forces Analysis on Airline Industry

The aviation industry has two primary sources for consumers. One is atravel agency

for foreign companies and websites, and another is for people who buy tickets directly from

the airline provider (Amankwah-Amoah 2021). The online sites of foreign companies and

service agencies are the mediators of finding the best deals for travelers who want to fly,

often comparing prices between all major firms (Tian et al., 2019). Having aplane in hand

put the numbers of competing airlines ahead.

The industry has little reliability due to the acquisition of other airlines and the

number of flyers compared to airline schedules, prices, and airlines. Since firms cannot

supply all the required aircraft, buyers will use what is available according to their needs and

requirements. With adecent number of firms in the industry, companies are competing for

prices to attract more buyers and fill their aircraft seats (Rotondo et al., 2019). So, giving

consumers abig hand when it comes to prices. Online search has changed the industry, no longer forcing travelers to go through agents and allowing them to look at prices, compare

results, and choose what they want, allowing consumers to have the ability to buy mid-range

products (Tahanisaz 2020).

The US aviation industry is one of the most expensive industries (Augusto et al.,

2019). The cost of buying and maintaining money is high. Naturally, a limited number of

suppliers in such an industry can produce such an expensive asset (Tian et al., 2019). Vojtek

& Smudja (2019), although there are afew airlines worldwide, the ones with the most shares

are Boeing and Airbus. Large airlines sell quality airlines because of regulations; The only

difference that can be found between each airline is not the actual aircraft but the different

types of services provided by the customers. Given the high cost of purchasing these airlines,

companies have along-term debt to suppliers, leading to the long-term supply of suppliers.

Büyüközkan et al., (2021), even the most expensive Boeing aircraft, 737-700, cost $ 89.1

million. It will require costly borrowing and value from airlines to buy even the capital.

Therefore, Tahanisaz (2020) recognizes that few companies have the technology and

resources to produce heavy and expensive equipment. Not many firms can bring this money

to aconsumer in areliable way. However, there are speculations that aircraft manufacturers

do not produce anything else in cash. Providers in this field have lower negotiating power

than consumers (Tian et al., 2019). Although the consumer does not have many options,

suppliers also have no way of losing business as suppliers in this sector only sell quality

products. There is no slight difference that can be distinguished from the services provided by

airlines (Raza et al., 2020).

Competitiveness in the aviation industry in the United States is very high.

Competitive competition is due to the lack of distinction between the contributions of each

aircraft in the industry and the low cost of exchange (Thongkruer & Wanarat 2020). Access

to pricing data has increased competition as buyers can easily compare costs on all major

airlines. With each airline offering similar loyalty programs, customers tend to support price

decisions (Raza et al., 2020). There is intense price competition and fragmentation for smaller

products, with airlines offering loyalty discounts and fares to lower their competitors

(Tahanisaz 2020). This competition lowers each company's profits as airlines raise prices to

lower competitors, provide advertising revenue, increase market share, and gain product

loyalty (Vojtek & Smudja 2019). Although there has been some consolidation over the years,

large airlines are buying smaller, more likely competitors, and competition remains high in

the industry. The risk of new entrants to the aviation industry is the basis of the low potential for

reduced profits (Raza et al., 2020). Expensive start-up costs are a barrier to accessing the

aviation business. Caring for and purchasing even asmall plane lists many agencies that can

afford it. Compared to large commercial airlines currently operating, operating and marketing

costs are also complex constraints for smaller agencies seeking to enter and compete within

the market (Tian et al., 2019). Barriers to marketing include strategies such as the departure

of atravel agency commission, compensation for corporate agreements, and standard flight

systems. Functional walls usually have limited access to storage areas, luggage handling,

ticket counters, boarding, and departure and disposal areas.

To reduce barriers to entry and increase competition, Congress passed the Wendel H.

Ford Aviation Investment and Reform Act in 2000 (Thongkruer & Wanarat 2020). The law

requires airports to "take strict measures to ensure that new entrants receive adequate access

to airports." This has been especially helpful for small aircraft signals that have not been sent

to large airlines — this increase in competition has led to lower consumer prices. The law has

forced large private airlines in these areas to reduce costs or find away to provide diversity

for their product (B üyüközkan et al., 2021). Although the threat of new entrants is low, the

industry is still highly competitive.

The threat of substitutes is significant in the aviation industry. While there are other

airlines that customers can choose from, there are different modes of travel. Customers can

choose from various options, including boats, motorcycles, cars, trains, and buses (Augusto et

al., 2019). However, all modes of transportation have their value based on how far the

customer has to travel, and the cost-effective route depends on how much the route costs and

how much time they want to spend on travel. There are cases where long-distance travel can

be done by bus, motorcycle, and car.

Conclusion

After analyzing the market structure of the aviation industry, the transformation of the

sector is evident. As guidelines have dwindled in recent decades, major airlines such as

United Airlines, Southwest Airlines, Delta, and American Airlines began to consume industry

market share; Companies can be named as the operators of the American aviation industry.

COVID-19 has significantly impacted the aviation industry by increasing government

regulations and reducing travel. As things return to normal, the aviation industry will begin to

experience growth as an industry seen before the outbreak of violence. As related to Porter's

Five Forces, the power of supplier and consumer negotiations is and will continue to be so (Bakir et al., 2020). Manufacturers of industries and airlines are responsible. Airlines require

components to make the aircraft, while providers offer astandard product that can be widely

used outside the aviation industry (Augusto et al., 2019). Consumers will continue to be

consumers; they will look for as cheap aflight as possible through external service providers

or agencies. Competitively, airlines will try to "beat" competitors' money to make aprofit.

However, time will tell how much impact the Wendel H. Ford Aviation and Reform Act has

on new entrants (B üyüközkan et al., 2021). Since its passing in 2000, there has been no long-

term impact, while four other significant companies still dominate the industry. Although

there are exceptions, the aviation industry is considered very economical and easy to provide.

It has more advantages than any other mode of transportation. The US aviation industry has

experienced continued growth over the past few years, which will not change. References

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