Porter’s Five Forces Analysis of Malaysia Airlines 

Malaysia Airlines is a flag-carrier Malaysian airline and aviation company. It started its operations in 1947 under the name of Malaysia Airways. Today, we’ll discuss Porter’s five forces analysis of Malaysia Airlines; bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.

Substitutes and Competitors of Malaysia Airlines

• PT Garuda Indonesia 
• Emirates Airlines 
• Singapore Airlines 
• Air India 
• Qatar Airways 
• Qantas 
• Virgin Atlantic 
• Turkish Airlines 

Porter’s five forces analysis of Malaysia Airlines would analyze the bargaining power of suppliers and buyers; the threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management. Here’s Malaysia Airlines Porter’s five forces analysis of airline and aviation business as follows;

Porter’s Five Forces Analysis of Malaysia Airlines

Let’s discuss Porter’s five forces analysis of Malaysia Airlines as competitive forces in strategic management and they’re as follows; 

Bargaining Power of Suppliers in Malaysia Airlines

The bargaining of suppliers is strong in the airline and aviation business as competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in Malaysia Airlines Porter’s five forces analysis of airline and aviation business are as follows;

I-Limited Suppliers

Boeing and Airbus are the top suppliers of Aircraft manufacturers and aircraft parts and components suppliers. They invest a significant amount of capital resources in research and development to keep upgrading their aircraft and aviation systems to achieve efficiency. However, the limited availability of airline manufacturers and parts suppliers increases the bargaining power of suppliers.  

II-Low Switching Option 

Malaysia Airlines and other aviation companies have limited aircraft manufacturer switching options. They can either choose Boeing or Airbus; there is no third option. It further increases the bargaining power of suppliers. 

Bargaining Power of Buyers in Malaysia Airlines

The bargaining of Buyers is higher and lower in the airline and aviation business as competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in the airline and aviation business five forces analysis of Malaysia Airlines are as follows;

I-Aircraft Fleet Companies 

Group aircraft fleet-carrying companies have hundreds of aircraft at their disposal; they rent aircraft to other small airline companies, businesses, and rich celebrities. Since they place orders for dozens of aircraft, the mega size of their orders increases their bargaining power. 

II-Individual Airline 

Malaysia Airlines has a smaller fleet size comprising only 76 airlines. The company’s order for the new aircraft is either 1 or 2 in five years, and they perform maintenance of their aircraft in-house. These factors decrease the company’s bargaining power. 

Threat of New Entrants in Malaysia Airlines

The threat of new entrants is lower in the airline and aviation business and Malaysia Airlines is a competitive forces in strategic management. Some of the main factors impacting the threat of new entrants in Malaysia Airlines five forces analysis of the airline and aviation business are as follows;

I-High Capital Investment 

When it comes to launching an airline or aviation company, then it requires heavy capital investment to buy their aircraft, at least a dozen to offer multiple destinations. Along with the high capital investment, they need to comply with safety regulations and earn the license from various governments. Legal compliance would further increase their bargaining power. 

II-Marketing and Branding 

Malaysia Airlines invested a significant amount of budget on marketing and advertisement for the promotion of its brand and air travel offers. The company has earned the trust and confidence of customers with years of quality service and various loyalty programs. On the other hand, the airline company doesn’t have this option. 

Threat of Substitutes to Malaysia Airlines

The threat of substitute products and brands is higher in the airline and aviation business as competitive forces in strategic management. Some of the main factors impacting the threat of new substitutes in Malaysia Airlines five forces analysis of the airline and aviation business are as follows;

I-Multiple Airline Alternatives

There are multiple airlines operating their business in the market, and they all offer unique promotional offers and loyalty programs. Customers could choose Malaysia Airlines or another airline without incurring any additional cost; because they have access to the information and comparing cost. It increases the threat of substitution rate. 

Competitive Rivalry in Malaysia Airlines

The competitive rivalry among airline and aviation businesses and companies is very high in as competitive forces in strategic management. Some of the main factors impacting competitive rivalry in Malaysia Airlines Porter’s five forces analysis of airline and aviation business are as follows;

I-High competition 

The airline and aviation business industry has become highly competitive over the years. Malaysia Airlines is facing tough competition from competitive airline brands like Singapore Airlines, Indonesia Airlines, and Emirates Airlines. They all operate their airline business in the same region and they’ve earned a significant market share in the aviation industry; it becomes highly difficult for the company to maintain its market share in the presence of tough competition. 

II-Offers and Discounts 

In order to fight against the tough competition, Malaysia Airlines offers various types of additional services; loyalty programs, seat selection access, and Journify. The additional services help the company to attract the attention of new potential customers and attract the new ones. 

Conclusion: Malaysia Airlines Porter’s Five Forces Analysis |5 Forces Analysis of Malaysia Airlines

After an in-depth study of Porter’s five forces analysis of Malaysia Airlines; we have realized that Malaysia Airlines is the world’s leading Southeast Asian aviation company. If you are learning about the Malaysia Airlines 5 forces analysis of airline and aviation business; then you should keep in mind the abovementioned bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.