America the Biggest World

For the long haul distance, the buyers' bargaining power is medium because cutomers do not have lot of choice, moreover the availabality of flights or seats is limited, it means that customers' bargaining power depends of the productivity of the airline.

However, when customers fly with British Airways they expect a high quality service, and thanks to yield management, the airline changes the price according to demand of customers during all year. Finally, the increase of Internet usage has amplified awarness and interactions of customers; actually, the majority of online consumers use price-comparisons sites before their purchase.

Substitutes

The bargain power of substitutes is very low, there are few direct closed substitutes on the short haul flights, Eurostar or a ferry are the only substitutes, however, there is no one notable for the long haul flights.

Suppliers

The main suppliers of British Airways and globally airlines industry are Airbus and Boeing, indicating their high bargaining power, the both are the main aircraft manufacturers in the world, and they have high interest and big impact on the company and vice-versa. British Airways has only one fuel supplier meaning it also has power over the decisions made by British Airways.

Moreover, there are also fuel companies, which have a high bargainig power against British Airways, while the oil prices still fluctuate, and then the exchange currency affects directly British Airways.

Industry competitors

Actually, the airline industry containts three main alliances with a large range of airlines worldwide, that growth competition between airlines, The increase of oil prices and the financial crisis have pushed the airlines companies to combine with each other to solve these issues, which has raised the competition in the whole industry, For example BMI and Brussels Airlines.

British Airways is facing a strong short-term market competition from smaller businesses such as Easy Jet or Ryanair; the following figure shows the rapid growth of these airline companies in term of revenues, passengers and profit before tax. But the restricted number of airlines and high fares charged mean lower international competition for British Airways. However, competition remains high and intensive within Europe. Furthermore, British Airways caters for long haul and short haul flight; within long haul there is little differentiation with the competitors in terms of pricing and service offering.

Market dynamic

Focus & concrete Large or hypothical

Airlines Transport industry (short term)

Risk