Impacts of the micro environment on airline operations in southern Africa: A literature review study.

Abstract

Operating airlines in southern Africa has proved to be fraught with challenges in the micro environment resulting in several airlines terminating their services after short periods of operation. This article focuses on the impacts of the micro environment on airline operations in the region. From the study it is clear that that the only opportunities for the airline industry in southern Africa are the low threat of substitutes and new entrants, which are not enough to mitigate intense rivalry and, the high bargaining power of buyers and suppliers. Several suppliers can easily ‘bully’ airlines, and even though the threat of new entrants is low, wherever there is potential, there will be new entrants, creating overcapacity and reducing yields (as has been the case in South Africa). It is therefore clear why there is such a high failure rate in the airline industry in southern Africa relative to other industries.

Keywords

• Airlines
• opportunities
• failure rate
• southern Africa
• overcapacity
• yields