Emerging regional competition

Industry Analysis
• Five Forces Model.
o Potential entrants have significant barriers including a requirement of large capital, access to routes and terminals and cost of meeting regulations.
o Low threat of substitutes for business customers from technologies such as video conferencing or networking.
o High threat of substitutes for recreational and discretionary customers including alternative locations, pursuits and industries.
o Power of customers significant as customers can change the airlines withr elative ease.
o Power of suppliers is also significant due to limited sources of large passenger aircraft and also dependence on airports and schedules for products such as airline fuel.
o Competitive rivalry is strong due to a significant number of medium to large competitors, high exit barriers, similar products and market turbulence. In particular Malaysian and Thai airlines imitating SIA’s example.
• The underlying forces demonstr...