On September 11th 2001 tragedy struck the world and in particular the United States of America when commercial airliners where hijacked by terriosts who proceeded to crash the fully loaded passenger planes into the world trade centre and the pentagon. This tragedy had a huge impact on everybody including people and businesses. Although the tragedy of 9/11 has a lot to do with the fall of the airline industry it is not totally to blame according to (Wolf 1995) by the beginning of 2001, the airline industry was already feeling the effects of one of its historical enemies, economic recession. Economic recession exposes overcapacity in the market leading to declines in prices as carriers scramble to fill seats and retain market share. Financially weak (or bankrupt) carriers create further downward price pressure in their attempts to generate revenue.
In this essay I will be discussing arguments for and against the attractiveness of the airline industry pre and post the tragic events of 9/11 followed by discussion on the strategic implications for both low cost airliners and full service carriers in the future. To help me assess the attractiveness of the industry I will be using various models such as Porter's 5 forces framework and Swot analysis.
One of the most basic techniques for analysing firm and industry conditions is SWOT analysis. SWOT stands for: strengths, weaknesses opportunity and threats. Swot analysis provides a framework for analysing these four elements of a company's internal and external environment. The strengths and weaknesses portion of SWOT refers to the internal conditions of a firm and opportunities and threats are environmental conditions external to the firm (Dess, Lumpkin, Taylor 2006)
I will start by discussing the ...