JetBlue Using Porters Five Forces

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As the paper highlights, unlike other industries, the airline industry is characterized by high start-up and high running costs, which acts as a barrier to entry. So much is the costs that airlines that make it in the industry either must have been started a bit earlier in order to make it up the competitor ladder in a gradual manner. In addition, so much is the cost that small airlines must be affiliated with large airlines in order to make it in the industry. In order to confirm that the threat of new entrants is minimal, a look at JetBlue shows that success within the industry was not obtained overnight. Instead, the company has gradually moved towards success. The case study also shows that some attempts by some airlines to make it in the same market with Jetblue were not simple. For example, US Airways was one of the five US Airlines that filed bankruptcy in 2006 owing to the drop in revenues and increased costs. The company does not have many suppliers. Only two of them are identifiable. Essentially, this means that the supplier’s bargaining power is high as the company does not have many suppliers to choose from. Apart from airline suppliers, other suppliers include fuel suppliers and the current price of fuel in the industry is high. This again makes the bargaining power of suppliers to be high. Since the airline has prescheduled flights, fuel supply is quite important as it cannot afford to miss any airline. This still confirms that the suppliers’ bargaining power is high and any of their actions can lead to serious consequences on the industry’s part such as low efficiency, which is highly related to fuel supply and cost. Customers within the airline have several airline options to choose from.