Name – Revati tapaskar

Roll no – 2k181175
Specialization - Finance

Porter’s Five Force Model of Air India

Threats of new entrants:

Threats from new entrants for Air-India is very high. The initial investment for
the new entrants into the air lines industry is very huge in amount. In olden
days, it is very difficult to start a new airline company, but in recent times,
banks are providing good opportunities to the new entrants, by providing long
term loans with less interest rate. So this will be a threat for Air-India from the
upcoming and new domestic airlines.

Threats from the competitors:

Threats from the competitors for Air-India is very high. The competitive rivalry
within the airline industry is very intense, as many major airlines are operating
the flights to the same destinations, all over the world. Air-India is facing major
threats from the industry competitors like Emirates, Jet Airways and Air Asia
etc.
Bargaining power of the buyers:
The threat from the buyers is intensively high for an organization like Air-
India. As more domestic and international airline companies are operating their
flights to the same destinations with low travelling fairs, the customer can
choose from a wide variety of travelling plans offered by the different
companies. Then the power of the buyer is very high, as the competition
between the companies is more. Air-India is already running in losses, the
customer may demand more. At international level this buyer threat is
somewhat moderate, but at domestic level, it was very high.

Threats from the substitutes:

Threats from substitute products is very less for Air-India as by considering at
domestic level, the customers can choose railways or roadways that
are connecting different places. But still it is time consuming. The only one
factor that makes people to think about alternate travel options like trains or
buses is the cost of air travel, which was expensive for the people of developing
countries like India. So there is a little threat at domestic level, but very less
threat at international level.

Bargaining power of suppliers:

The threat from the bargaining power suppliers is moderate for Air-India.
Suppliers for Air-India are very less in number. The major suppliers for the
company are Boeing and Airbus. From the international aviation surveys, there
is no cutthroat competition between Boeing and Airbus, so there less chance of
bargaining with the customer. However an airline company like Air-India,
which was running in losses, the suppliers may demand regarding the payment
options.