Airline Industry Analysis: Competitive Advantages of Wizz Air

This report provides a comprehensive analysis of the airline industry, focusing on the competitive dynamics between Wizz Air and Ukraine International Airlines. The report delves into the background of both organizations, highlighting their establishment, operational history, and market positioning. It identifies key advantages required for a competitive edge, including supply chain efficiency, pricing strategies, brand value, marketing approaches, and human resource management practices. The analysis incorporates SWOT and PESTLE analyses to evaluate the internal strengths, weaknesses, and external opportunities and threats, as well as the political, economic, social, technological, environmental, and legal factors influencing the airlines. Furthermore, Porter's Five Forces framework is applied to assess the competitive landscape, including the bargaining power of buyers and suppliers, rivalry among existing companies, and the threat of new entrants and substitutes. The report concludes by summarizing the key findings and comparing the competitive positions of Wizz Air and Ukraine International Airlines, offering insights into their strategic advantages and challenges.

AIRLINE INDUSTRY
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Table of Contents
Introduction...................................................................................................................... 3
Background of the organisations......................................................................................3
Advantages required for competitive edge.......................................................................4
Conclusion....................................................................................................................... 9
References.....................................................................................................................10
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Introduction
The support of the organisation and the better operation of organization depend upon
the smooth development of the organizational operation ground. It is evident that the
rise in the better development of an organization depends mostly on the smooth
understanding of the society and the environment of the organisation. In this
environment of the organisation the understanding of the society is the prime aspect int
the better management of the competitive advantage of the organisation. The
opportunity of the assignment is based on the better understanding of the aspect of the
competitive edge. The assignment also helps in the better understanding of the
contribution in terms of competitiveness gained by Wizz Air compared to Ukraine
International Airlines in the airlines industries.
Background of the organisations
Wizz Air was established in 2003 by lead investors from Indigo as an American private
equity firm. The organization was first for the transportation of the investments of the
organization. The first flight of the airlines was onm 2004 from Katowice International
airlines for the better relation management of the society. The airlines made 11 million
people in the airlines in the and earned huge amount of profit for the better support of
the organization. In the year 2015 the airline, formed its 19th base at Tuzla International
Airport. The organisation headquarters is in Budapest.
The Ukraine airlines were established in 1992 in 1st October (wizzair.com, 2017). The
organization acted as the joint venture in the society with the cooperative support of the
Kiev London airlines. The airlines authority began its support with the delivering of the
cargo in the society. The operation of the airlines was supported by the Boeing 737-200
aircraft on 13 November. The operation of the airlines was however dedicated to the
operation of the organization in freight transport. The support of the freight transport
was in terms of the organizational efforts and the greater knowledge of the markets in
the society (www.flyuia.com, 2017).
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Advantages required for competitive edge
Supply chain is referred to as the complex as well as dynamic supply along with the
demand network. According to the views of Prajogo et al. (2016, p.993), it could be
defined as the system of different organisations, activities, people. Information as well
as resources which were involved in the movement of the services offered by airline
companies from supplier to the customers had been outlined. The supply chain
efficiently maps out a certain justification for targeting efforts in the future as well as
assists for developing sales pitch by an effective manner. Through the supply chain
analysis, as supported by Lu et al. (2016, p.646), it could be determined that the supply
chain of the Wizz Air is smoother and contain minimum discrepancies as compared to
the Ukraine International Airlines.
Pricing of the organization is better understood to be the most important factor help in
the better understand if of the customers in the society. The society of the airlines
organization needs to be, maintained well with the support of the pricing in the
organization. The Wizz Air air maintains the support towards the community people with
the proper valuing of the mentality and the demands for the customer friendly products
and services in regular basis (wizzair.com, 2017). On the other hand the Ukraine
Airlines does not go beat the value of the organisation formerly mentioned as being a
former organisation has to face all the consequences related to the development of the
organization along with the support of few customers and the marketing group
(www.flyuia.com, 2017).
Brand values marks the rise in better awareness of the people in the society regarding
the organisation. The support of the organization is better from the customers of the
organisation. The customers of the society need to be maintained proper for the better
valuing of the brand. The Wizz Air is already at peak point with the proper brand value
in the mind of the customers of the society (wizzair.com, 2017). The support of the
brand value helps in the better management of the organization and selection of policies
for the organization. On the other hand the opportunity for the Ukraine airlines are in
form of as a government airlines with not as much supportive criteria as the Wizz Air in
the organisational field.
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Marketing acts as one of the most important factor for the betterment of the
organization. The support of the organisation is based on the marketing of the product
in the society for gaining the support of the customer in terms of gaining the appropriate
demand for the betterment of the organization. The smooth development of the Wizz Air
is because of the support of the media and the better use of the resources in making the
product news available to the customers of the society, the society is well segment ted
by Wizz air in terms of making the product known to the people through the use of web,
social media and the other practices. On the other hand the Ukraine airlines being a
government organization does not rely, much on advertising and therefore fails to make
the people of the country aware of the airlines products and services. The support of the
organization is however high from management but not from the customer's side.
Human Resource management is one of the prime activities in the organization for the
management of the operation by the organizational workers. The skills of the human
resource management deal with better selection of the people in the organisation, which
determines smooth operation of the organisation. The Wizz Air has better and corporate
HR management for the smooth development of the organization. The smooth
development of the organization is for the better opportunity and the skills provided and
obtained respectively by the employee of the organ. However, on the other hand the
Ukraine Airlines do have proper HR but does not match the competitive and the
corporate nature of the HR’s in the Wizz Air creating a line of difference in the form of
competitive advantages
SWOT Analysis of Wizz Air
Strength
 Sustainable growth in the
society
 High brand recall
Weakness
 High competition
 Secondary airports are becoming less
attractive
 Opportunities
 New markets
Threats
 Higher getting rate of interest
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 Growing economy  Price changes
Table 1: SWOT of Wizz AIR
(Source: learners)
Analysis: The Wizz Air enjoys the strength of sustainable growth in the organization and
receiving of the support of the customer. The achievement of the high brand recognition
also helps in the better support of the organisation. The organization faces is weakness
in high competition from the competitors is the society and the weakness is delivered
because of the lowering of the attractiveness of the secondary airport (wizzair.com,
2017). The Wizz Air enjoys new market growth as their prime opportunity and growing
of the economy acts as cherry on cake for the better development of the organisation.
The high rate of interest and taxes act as the threat in the better development of the
organization. Price change also contributes to the threat level of the organisation
(wizzair.com, 2017).
Porter’s Five Forces
Porter’s Five Forces is commonly termed as the competitive forces that are to be
determined by the factors which influences the position of competitiveness of any
company within a market or an industry. In the referred study, the two topmost
companies within the airline industry of the Ukraine have been considered- Wizz Air and
Ukraine International Airlines. As observed by Moreno-Izquierdo et al. (2016, p.309),
several factors that determine the edge of competition among these companies and the
gaining of competitive advantage is assessed through analysing the factors such as -
bargaining power of buyers as well as suppliers, rivalry among the existing companies
and threat of the new competitors or entrants.
The conditions which make the Wizz Air a better supplier as well as a buyer compared
to Ukraine International Airlines are to be mentioned as follows-
Wizz Air is not dominated by large companies unlike its competitor Ukraine International
Airlines, and is far more concentrated in its selling targets than the industry in which it
prevails. As per the observations of Wee (2017, p.44), there is hardly any requirement
for contending and substituting products for increasing sales within the industry.
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Services are mainly differentiated or the presence of built-up switching costs influences
the sale of services by Wizz Airlines and consistently poses a serious threat to the
forward integration.
According to the opinions of Grundy (2006, p228), consumers of Wizz Air are mainly
price sensitive and have adequate knowledge regarding the services and hence, it is a
better buyer of customers’ attention and preferences compared to Ukraine International
Airlines. Wizz Air has much buyer power than the Ukraine International Airlines due to
its strategic pricing policy and delivery of exceptional services to the consumers and
hence it is superior in these terms compared to its competitors (www.flyuia.com, 2017).
Along with Industrial rivalry as one of the components that is determined, Porter’s five
forces includes barriers of entry and threat of substitutes as other two most essential
components required for analysing the degree of competition among the companies
within the market. In the views of Dobbs (2014, p.44), barriers of entrants behave as a
deterrent against the new competitors operating within the market. Barriers that are
determined through certain factors such as absolute advantage enjoyed by dominating
company as well as high advertisement costs.
PESTLE Analysis
Political Several political factors affected Wizz Air and it could overcome
these factors in a subtle way as compared to the Ukraine
International Airlines. According to the words of Grundy (2016,
p.214), in order to overcome the probabilities of terrorist attack, Wizz
Air adopted some innovative strategies such as advanced security
measures. Investments of government impacts on the airport
services and the expanding of the business as well.
Economic Economic instabilities affect the situation of airlines in Ukraine and
any other nation as well. As per the opinions of Curet and Pestle
(2010, p.430), increase in fuel prices and economic downturn within
the economy eventually affects the functioning and operation of the
airlines such as Wizz Air and Ukraine International Airlines. Wizz Air
can easily overcome these situations as compared to Ukraine
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International Airlines.
Social Customers of Wizz Air receive seasonal offers and discounts in a
greater proportion than in the Ukraine International Airlines. The
middle class group of individuals could enjoy better facilities of
holiday packages and budgeting airlines through Wizz Air. In the
views of Barba et al. (2016, p. 984), due to cross border expansion
of several business has led travelling of industrialists and
businessmen which increases the income of Wizz Air relatively more
to Ukraine International Airlines due to the exceptional services
provided by them.
Technological Technology poses a huge impact on the blooming air industry as the
use of internet services has caused much more convenience of the
customers for booking air tickets for their respective destinations. In
addition to this, airlines have caused much more facilities for the
customers to gain adequate information about the customers.
Depending on these factors, Wizz Air is comparatively superior to
the Ukraine International Airlines in providing excellent services to
the customers.
Environmenta
l
Weather and climatic changes affect the airline industry in a huge
proportion since these factors affect grabbing of attention of different
customers since they prefer eco-friendly airlines. Wizz Air attains
higher competitive advantage than Ukraine International Airlines
based on this fact.
Legal The regulations and rules as well as the standards of quality
introduced in the country had severely affected the airline industry.
Compliance of these rules as well as regulations is highly
maintained by Wizz Air than Ukraine International Airlines.
Table 2: PESTEL analysis
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(Source: Learner)
Conclusion
The study analyses the degree and level of competition of the airlines companies within
the industry of airlines basically considering two forerunners- Wizz Air and Ukraine
International Airlines. It could be even concluded that Wizz Air holds a better
competitive position and eventually gains a competitive advantage on delivering
services to the customers. This is apparently determined through a supply chain
analysis, comparison of brand values, functioning of HR departments and services and
pricing strategies. The competitiveness among the firms and the superiority of Wizz Air
is eventually determined through a SWOT analysis, Porter’s five forces and PESTEL
analysis.
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References
Barba, F.C., Sánchez, G.M.D., Seguí, B.S., Darabkhani, H.G. and Anthony, E.J.,
(2016). A technical evaluation, performance analysis and risk assessment of multiple
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Production, 133, pp.971-985
Curet, L.A. and Pestle, W.J., (2010). Identifying high-status foods in the archeological
record. Journal of Anthropological Archaeology, 29(4), pp.413-431
E. Dobbs, M., (2014). Guidelines for applying Porter's five forces framework: a set of
industry analysis templates. Competitiveness Review, 24(1), pp.32-45
Grundy, T., (2016). Rethinking and reinventing Michael Porter's five forces model.
Strategic Change, 15(5), pp.213-229
Lu, I.Y., Kuo, T., Lin, T.S., Tzeng, G.H. and Huang, S.L., (2016). Multicriteria decision
analysis to develop effective sustainable development strategies for enhancing
competitive advantages: Case of the TFT-LCD industry in Taiwan. Sustainability, 8(7),
p.646
Moreno-Izquierdo, L., Ramón-Rodríguez, A.B. and Perles-Ribes, J.F., (2016). Pricing
strategies of the European low-cost carriers explained using Porter's Five Forces Model.
Tourism Economics, 22(2), pp.293-310
Prajogo, D.I., Prajogo, D.I., Oke, A. and Oke, A., (2016). Human capital, service
innovation advantage, and business performance: The moderating roles of dynamic and
competitive environments. International Journal of Operations & Production
Management, 36(9), pp.974-994
Wee, C.H., (2017). Think Tank—Beyond the Five Forces Model and Blue Ocean
Strategy: An Integrative Perspective From Sun Zi Bingfa. Global Business and
Organizational Excellence, 36(2), pp.34-45
wizzair.com, (2017) ABOUT US Available at: https://wizzair.com/en-gb/information-and-
services/about-us/company-information, [Accessed on 23 Feb 2017]
wizzair.com, (2017) BACKGROUND Available at: https://wizzair.com/en-gb/information-
and-services/about-us/privacy-policy/#/, [Accessed on 23 Feb 2017]
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www.flyuia.com, (2017) ABOUT US http://www.flyuia.com/eng/company/ukraine-
international-airlines.html, [Accessed on 22 Feb 2017]
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