us airline industry

Athens University of Economics and Business
Department of Business Administration








Discussion questions for case three: The US Airline Industry in 2002













Alessio Arnetta
AP. MHTP. 2030297
Athens, 10/11/2003
1. Use Porter’s ‘Five Forces of competition’ framework to show how the structure of the airline industry has caused low profitability during the past twenty years.

Since domestic deregulation occurred in 1978, competition in the airline industry has intensified and become more concentrated. This situation can be analyzed through Michael porter’s framework of the five forces of competition. This framework views the profitability of an industry as determined by five sources of competitive pressure. These five forces of competition include three sources of “horizontal” competition: competition from substitutes, competition from entrants, and competition from established rivals and two sources of “vertical” competition:...