Threat of New Entrants
In Airlines Industry, The threat of new entrants is low. Firstly, Even though the switching costs are low between different brands of Airline, consumers are more likely to select well-known names of Airline companies because worth-of-month is importantly affecting Airline companies and safety is the first thing customers will consider. Since the ticket of Airline are usually expensive, customers would not give their money to the firms they do not trust. Secondly, this industry needs planes and experience of flying which also lowers the threat of new entrants. If a new firm plan to enter this industry, they need to firstly become licensed which may take more than one year, and after that they will be constantly being regulated by different organizations like the Federal Aviation Administration and the Department of Transportation. All the time and cost spend to create a new airline company is enough to stop most of the new entrants from getting into this industry.
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