Air Canada: Analysis of Threats and Opportunities in the Market

This report analyzes the competitive threats faced by Air Canada within the airline industry. It examines factors such as the threat of new entrants, the bargaining power of buyers, and the bargaining power of sellers. The report highlights the impact of low-cost airlines and price sensitivity among customers. It also discusses the role of fuel and labor costs, and the potential for substitution. The analysis includes a review of competitive rivalry, including the number of competitors and their strategies. The report uses academic sources to support its findings and provide context to the analysis of Air Canada's strategic challenges. This report is a valuable resource for understanding the complexities of the aviation market and the challenges faced by major airlines.

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Threat of new entrant – There are numerous airline carriers within the airline and aviation
industry in Canada. These organizations are entering into the aviation industry through
penetrating pricing model. They are known to serve the customers at a very low price. Therefore
they are known to attract most of the customers as because they are attracted towards lower and
cheap flight. The organizations are most cost sensitive which lends proof to the idea that the
small airlines organizations are gaining success in the industry (Lawton 2017).
Bargaining power of the buyer – The organization in the airlines and aviation industry where
there is a substantial market segment of the demographics which is divided into various sectors.
But as in the aviation industry there is no such demographics selected as target market. People
from all ages are known for affording the flight service. Therefore if the new airline industries
are entering into the market who are offering lower price of the flight. They will get much
attracted to the huge amount of customer base. According to the authors the customers are high
price sensitive who tend to deal with those organizations which offer low price and cheap rate
and provide food, water, etc (Liu & Kharina 2017).
Bargaining power of the seller – The three main inputs of the firms are at competition is at the
aircraft, fuel cost and labor cost. The price of the three things is much lined with the fluctuation
in the global market for oil which can be highly volatile.
Threats of Substitution – This mainly includes the substiututer performance of the aviatuion
industry and thev cost which is relate with tye changes.
Competitive Rivalry – It includes the number of companies and subsidies and new entrants in
the market. They also include the quality differences and switching cost imposed.

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References
Lawton, T. C. (2017). Cleared for take-off: Structure and strategy in the low fare airline business.
Routledge.
Liu, C., & Kharina, A. (2017). Canada-US transborder airline fuel-efficiency ranking (No.
Working Paper 2017-16).

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