Delta Airlines
The threat of entry
DA is one of the oldest airlines in the United States, however, there are still threats from new entrants in the market because low-cost carriers (LCC) definitely going to affect the pricing strategy of DA. In contrast, DA has brand loyalty due to its long history of operation. Moreover, the entry barriers are still high due to the operating cost such as aircraft, airport cost, maintenance, route licenses, and taxations.
The threat of substitution
Since the airline industry is serving passengers globally and in a more efficient way, the threat of substitution is relatively low, but for the small portion of leisure travellers, the other means of transportation could be cruising automotive transport and railways.
The bargaining …show more content…
In the case of DA because the cost of buying air ticket is high, therefore, passengers are more likely to choose the budget airlines over DA. The airlines pass on their information to websites such as TripAdvisor and Trivago, which gives more power to the customer to compare the prices of the airlines instead of their service, amenities and choose what best suit their budget.
The bargaining power of supplier
There are two main suppliers, Boeing and Airbus, on the other hand, Delta doesn’t have to rely on a third party to supply the fuel because of their own fuel refinery that gives Delta competitive advantage over the other airlines. However, there is a downside to it if there is an accident or mechanical breakdown occurred in refineries, which can cause disruption in operating the airline. The competitive advantage can be a threat to DA, therefore, DA has to think in advance how to cope with the problem if it's occurred in the future.
The extent of rivalry between …show more content…
The SkyMiles program offered by the Delta in which the customers can earn points on the mileage they travelled and later on redeem it for free air tickets, upgraded to upper class and purchase ticket at a half price. According to the annual report (2014), the program members redeemed more than 296 billion miles which equate approximately 12.5 million redemptions. Since the Delta airlines have the diversified routing compare to other airlines such as American airlines. The American airlines do not cover the routes to Africa whereas, the delta airline covers the African routes so the customers are willing to pay in order to enjoy those
DA is one of the oldest airlines in the United States, however, there are still threats from new entrants in the market because low-cost carriers (LCC) definitely going to affect the pricing strategy of DA. In contrast, DA has brand loyalty due to its long history of operation. Moreover, the entry barriers are still high due to the operating cost such as aircraft, airport cost, maintenance, route licenses, and taxations.
The threat of substitution
Since the airline industry is serving passengers globally and in a more efficient way, the threat of substitution is relatively low, but for the small portion of leisure travellers, the other means of transportation could be cruising automotive transport and railways.
The bargaining …show more content…
In the case of DA because the cost of buying air ticket is high, therefore, passengers are more likely to choose the budget airlines over DA. The airlines pass on their information to websites such as TripAdvisor and Trivago, which gives more power to the customer to compare the prices of the airlines instead of their service, amenities and choose what best suit their budget.
The bargaining power of supplier
There are two main suppliers, Boeing and Airbus, on the other hand, Delta doesn’t have to rely on a third party to supply the fuel because of their own fuel refinery that gives Delta competitive advantage over the other airlines. However, there is a downside to it if there is an accident or mechanical breakdown occurred in refineries, which can cause disruption in operating the airline. The competitive advantage can be a threat to DA, therefore, DA has to think in advance how to cope with the problem if it's occurred in the future.
The extent of rivalry between …show more content…
The SkyMiles program offered by the Delta in which the customers can earn points on the mileage they travelled and later on redeem it for free air tickets, upgraded to upper class and purchase ticket at a half price. According to the annual report (2014), the program members redeemed more than 296 billion miles which equate approximately 12.5 million redemptions. Since the Delta airlines have the diversified routing compare to other airlines such as American airlines. The American airlines do not cover the routes to Africa whereas, the delta airline covers the African routes so the customers are willing to pay in order to enjoy those