Monday, February 25, 2019
Power of Suppliers Essay
A nonher force is power of providers. Power of the suppliers is important as it pass on affect the industry. In airline industry, the power of suppliers is quite high since at that place ar only two major suppliers which are Airbus and Boeing hence in that location are not many choices to airline industry. Nevertheless, the global economic crisis has exceptional the new entrant and also reducing the upgrade of planes in the speedy future. However, both suppliers provide al intimately same standard aircraft and hence the displacement to Air Asia is low.The supplier of airline companies is the fuel supplier, food supplier, merchandise supplier and aircraft supplier. Other supplier like foods supplier and fuel supplier, the confines of the provide must be based on the market condition. Hence, the supplier cannot attach too much of its price or risk losing long term business with the aircraft companies. Besides that, Airasia has high switching speak tos. Most of Airasias aircr aft are Airbus models. Previously, the company used Boeing models, which they lease it and the company had since phased out most of the models and substitute with Airbus.If Airasia is to switch to Boeing again, then the cost will be high. This is because training cost for employees to suit the aircraft features must be provided. Furthermore, the technology used by Airbus is the most advanced, thus Airasia must rely to the Airbus engineers to do maintenance of the aircrafts and seek advices. if the Airbus does not to cooperate with Air Asia, Air Asia will not have no suppliers to do the maintenance. nThus, bargaining power of suppliers is strong.