Introduction

Aviation industry is a business about the transportation and it brings most of profit to every
country in this world. Aviation industry is the most large globalisation business in the world
and the profit which they earn could help to raise the economy in the country. If the countrys
aviation industry is very success, the images of the country will be going up and more and
more people will use the industry of your company to fly over and visit your country as well
which this cause that the economics in the country will be raise and also they will know more
about the culture in difference country. For examples, American Airlines is the dominant
mode of transport for goods and services in the United States. Implicated aviation activities
must be provided and the exercise of all of the country's economy. Contribution of the
aviation industry to GDP is at an average of 4.7%. Aviation-related economic activity
accumulated to $ 975.7 per dollar and the aviation industry, an additional $ 1.87 output
(economic activity) delivered to final demand generated annually, for the overall multiplier
2.87. Aviation industry employs many thousands of people and thousands more work in
support of the aviation industry, "Steelworkers steel is essential airport car rental, aircraft,
passenger hotel staff to stay there, the airline printer scheduling, this dish meals and who sell
aircraft to the airport staff food grocer farmers.

Porter Five Forces

Bargaining power of Buyers
The aviation industry is composed of two groups of buyers. First, there are the individual
leaflets. They buy tickets for a number of reasons can be personal or business related. This
group is extremely diverse and most people in developed countries have purchased a ticket.
They can be a particular airline or through a second set of buyers to do this which the travel
agents and online portals. They work with a number of airline companies in order to give
customers the best possible flight. They need to know what the details provided during the
flight. Buyers need to know about flying in general and safety aspects of flying time. Service
provided is unique. Each airline has a niche. Some airlines focus on cost, while others focus
on having the best facilities. These are all potential buyers. Use Porters forces, companies
can decide on control customers how the businesses can be largely. For example, the numbers
of customers in the luxury market is less and more demanding, but are willing to pay higher
prices. In contrast, the common market, customers can huge in number, less demanding, but
more frugal.
Bargaining Power of Suppliers
There are relatively few companies that offer commercial aircraft, and have some space
differentiated products, such as engines and innovative materials and technologies to improve
fuel efficiency. Although the growth of the industry is quite low and other factors tend to
strengthen the aircraft manufacturer's profit potential, but they apparently rely on often
troubled airlines. For example, consider opening a restaurant. Owners will look food supplier
attention to its reliability, quality, price and whether to provide credit terms whenever asked.
He will also find out if there are many suppliers or a single supplier. Multiple vendors will
compete for business, so will provide a better service at reasonable prices, and a single
supplier can have an advantage, keeping the hostages on business. Airlines cannot easily
switch suppliers. Most companies have entered into long-term contracts with their suppliers.
Aircraft is so high capital products, the company is likely to make a long-term loan
agreement, and have more favourable credit terms, and they do not turn the company. It is
difficult to enter because of the need to enter the capital into the aircraft industry.

Threat of New Entrants

The threat of new entrants is another important aspect of the five forces. In this respect there
is a low threat to the aviation industry. However, there are two aspects that raise the threat
level. First, there is a very low switching cost. Second, there is no proprietary products or
participate in services. Although there are low switching costs between brands, consumers
often choose only well-known name. Tickets are expensive, so people do not want to give
money to companies that they do not trust. Also relates to a safety and a great majority of
consumers feel safer already exists for a long time companies. The industry needs of aircraft
and flight experience, which also reduces the incoming threat. When companies decide to
enter the market, they must first become a licensee may take about a year. After that, they are
constantly regulated by several organizations, such as the U.S. Federal Aviation
Administration and the Ministry of Transport. Time and money spent to open only one airline
is enough to prevent the majority of people entering the industry. In the aviation industry, the
arrival of a new airline can be destructive, especially since the new operators tend to focus on
the route corridor and promote their high value as a bargaining carrier.
Threat of Substitute
After looking into the threat, it is also important to consider the threat of substitutes. The
industry has a medium level of risk alternatives. There are alternatives to the aviation
industry. Consumers can choose other forms of transport, such as cars, bus, train or boat to
reach the destination. However, there is a cost to switch. Some of the transport means can be
more expensive than the flat ticket. Major cost is the time. Plane is provided by far the fastest
form of transportation. Aviation industry other forms of transport, when it comes to cost,
convenience, and sometimes services. Consumers sometimes choose other methods due to
various reasons such as cost, if they do not travel very far to improve the risk.

Competition Rivalry
The final aspect of the five forces is competition between existing players. Competition in the
airline industry is very intense for many reasons. The industry is currently very stagnant. This
seems to be a mature stage in the business cycle. The number of competitors remains
unchanged in the long run; it does not seem to be under or over capacity constraints. Fixed
costs are very high in this industry. This makes it difficult to leave the industry because they
are likely to be long-term loan agreement to stay in business. The products involved are
highly complex or aircraft which have intensified the competition. There is a profit to
compete with competitors within the market segments have a significant impact. There are a
large number of participants in the aviation industry, with only minor differences between the
supplier and product offerings, as well as the growth of the total addressable market is quite
low. Together, these factors tend to make commercial air travel is very competitive, which
helps to explain the difficulty of driving up profits.
Politic