record 979aircrafts delivered by the two aircraft majors. Other than a two and a halfmonth strike at Boeing in 2008, which delayed production in the fourth quarterof the year, the deliveries have been increasing steadily in the currentdecade.1 One of the way that would affect both fuel and aircraftsis forward integration; in this case, it is low. The reason for this is thataircraft manufactures, neither fuel providers nor technical support companieswill purchase an airline and staff it with flight attendants, commercialpilots, and a maintenance crew and operate flights across the world requiring amajor network of resources, which most companies do not have or are notprepared for.
However, the strong position fuel suppliers and aircraftmanufacturers hold in the industry need to be taken into account when operatingan airline.2 Labour comes third in our inputs, it issubject to the power of the unions who often bargain and get unreasonable andcostly concessions from the airlines, plus, Strikes affect the industrygreatly.Suppliersprovide resources to the business. For example, consider opening a restaurant.
Owner will look at suppliers of food noting their reliability, quality, pricingand whether they can offer credit terms whenever asked. A single supplier mightstand out but multiple suppliers will compete for business and therefore willoffer better service on a reasonable price, whereas a single supplier can havean advantage and hold business on hostage. He will also look at real estateresources. For the airline industry, there is technical support and ITservices as well as the catering services, which is a challenge to keep. Goingback to our restaurant example, there is a switching cost if he will try to move the business from onelocation to another. 3One exampleon how the strikes have a great effect, German airline Lufthansa declared(2015) that it lost at least 10 million euros ($10.
8 million) a day from thelongest strike in its 60-year history as cabin crew confirmed a fourth day ofstrikes.4Generalunion strike examples include, Eastern Airline Workers’ Strike (1989, U.S.
) andAlaska Airlines flight attendant strike CHAOS (1993).5Tosummarize, all suppliers have tremendous bargaining power with the airlineindustry. There are few fuel providers and no reliable alternative to fuel.There are very few pilots in the job market and planes cannot be flown withoutpilots. Mechanics for airplanes are in short supply and planes cannot be flownwithout being serviced.
Flight attendants provide services that cannot easilybe replaced and customer satisfaction without flight attendant would bedetrimental.Werecommend companies in the industry to take into consideration the limitedproduct suppliers, keeping in mind that customers behavior is highly affectedby price, which can pose a