Attractiveness of the Domestic Aviation Industry – Australia

Business strategy has to be ligned with the environmental conditions as an organisation with a general strategy wouldn't be able survive in such a dynamic environment. It is recommended that any organisation entering the market should compete with the rest of the airlines rather than Qantas as it would be almost impossible for a new organisation to compete with such customer loyal airline.

Thus, new entrants must compete towards the rest of the market share especially by pricing strategies. More routes than other airlines would be a great advantage as with the discounted airlines, customers have a limited choice for routes.Therefore it could be concluded that in order to geta good market share in this industry, a company should differentiate its products, have an attractive pricing strategy and more routes. Travel has dated back since the dawn of time and has evolved now into a business with several modes of transportations taking you to different destinations over land and sea. With the advancement of technology news means of transportation have risen up which has revolutionized transportation and evolving it into a business.This is clearly evident in the airline sector but since the airline industry is so vast with umber of commercial airlines providing their services over international waters to narrow the study down its best to take a regional/domestic market of a particular country and look closely on that industry within that country.

Transportation between countries was done was ships back in the day and is still existent today but as it is time consuming to reach its destination it isn't the most preferable option but it was the only mode of transportations between countries.With birth of the first plane created by the Wright brothers, the aviation industry has been nothing but a success tory and with the development of technology, Research and Development it does not look like slowing down The travel market within Australia is estimated to about 1 58 million trips yearly which could be classified to 17 million business trips and the rest of as leisure trips. Even though vehicles dominate most of the travel market, air travel dominates the large distance market with over 4 million trips per annum (BTE, 2000).This report will identify the major areas of interest in the domestic aviation industry - the level of air service to the destination, the behaviour of the operators/airlines, the ompetitiveness within the industry, the structure of airfares and the impacts of other factors affecting current and new operators.

When discussing the competitive forces within the domestic airline industry, it is important to look at the significance towards the country.Australia has grown over the last decade and numerous numbers of routes opened up to several destinations providing goods and services to those regions which states how important that an efficient and competitive domestic aviation industry is to the economy and with the deregulations within certain states emoving barriers to current and new entrants within the industry it would Just increase competitiveness. INDUSTRY ANALYSIS The domestic air travel has grown leaps and bounds with numerous routes opening up all over the country and with the expansion of networks there is a different relationship to the number of customers.The domestic market in Australia comprises of a number of airlines but even with stable operators in the industry with a fleet of 40- 50 of various sizes there is an the advancement of technology constituting changes in airlines, the deregulations within various states and territories and with hat new routes opening up are a few indicators of the presence of competitive forces The domestic market used to be made up of two leading players that is Qantas Airways and Ansett Airways but since the liquidation of Ansett Australia in 2002, Qantas has a hold on the market with a 70% of Australia' domestic market.

With demise of Ansett Australia it coincided with the arrival of Virgin Blue and the arrival couldn't have come at a better time for Virgin Blue and they developed a strategy to counter the hold Qantas has within the market. They promoted themselves as a iscount airline within the eyes of the public and that paid off well for them and opens up a new segment within the market. Although they may not provide a quality service or serve as many routes as compared to Qantas but they compensate that will a reduce air fare.Qantas which still has a strong presence within the industry combated that move from Virgin Blue by launching a partnered airline Jetstar to compete with Virgin Blue over this new segment. There was a lack of strong competitive pressure in the past in the domestic aviation structure and it could not ave been more evident in the individual route level because no one airline operates in all states and territories due to the nature of the industry the air routes are split between operators (Qantas & Ansett) along geographical lines but now with the expansion of fleets and the introduction of new participants it has been far more competitive.In the past the highly concentrated and strongly oligopolistic nature of the market did not consequently mean that customers would suffer low quality services and pay a higher price which is generally accustomed when the service rovider (s) have such power but with the change in market that has changed with airlines such as Virgin Blue and Jetstar providing a less quality service at a less price as compared to Qantas.

METHODOLOGY In order to gather information about the domestic aviation industry, a lot of data needed to be collected.Due to the time and budgetary constraints; the entire report is based upon secondary sources. Some of the main secondary sources that are used in this report are online databases, official internet websites of airlines and other organisation, text books written in the near future about business strategy and other umerous written sources that aided in research. In order to gather statistics to help research about the industry as a whole, Australian Bureau of Statistics (ABS) website was accessed.

The latest information has been gathered to the best of writer's knowledge, in order to grant the reader an accurate picture about the industry and to keep the report up-to-date, in order to make a well-informed decision about entering the market upon understanding the attractiveness of the domestic aviation industry. RESULTS Some of the results of the research carried out using the above stated sources follow. These are classified under different subtopics to benefit the reader to understand the report.