Industry Profile: Market Size: Approximately $95 Billion Market Growth Rate: Domestic 2.9%, International 5.0% (expected through 2017) Phase of the Business Cycle life: mature for domestic market, growth for international Number of companies in the industry: 43 major airlines and 79 regional airlines Scope of competitive rivalry: mainly major airlines (revenue above $1 billion). Traditional airlines developing low-cost offshoots Customers: 661 million domestic passengers. Expected growth of commercial customers Degree of vertical integration: mixed; some have low-cost booking systems, alliances with regional and international airlines, and even hotels. Fuel costs covered. Saber Holdings and Galileo International connect airlines with travel agents. No mention of airlines employing in-house catering. Learning curve effects: not a factor in this industry Ease of exit/entry: aircraft, terminals, infrastructure and personnel are expensive Technology/innovation: essential research and development to create efficiency and reduce expenses with hourly turn-overs, costs of fuel, reservations etc. Product features: different; customers can receive high-end service through to low-cost travel and seamless international connections. Economies of scale: The sector contains many very large operators and many small to medium sized operators. Capacity Utilization: High rates required to achieve adequate profitability Industry Profitability: Below to Above Average; fuel and maintenance costs, a growing senior staff division, employee unionization and competitive pricing wars are margin concerns. Porter's 5 Forces Threat of new entrants - Moderate - Deregulated industry. The threat of new entrants increases during periods of industrial downturn (e.g. JetBlue's entry point). Existing airlines could encroach on an opponent's major or regional market share. High cost of entry into the industry Bargaining power of buyers – High – No or very low cost of switching airlines Bargaining power of suppliers – High – two key supplies needed are planes and fuel. Fuel prices are negotiable based on quantity. There are only two aircraft suppliers, Airbus and Boeing. Threat of Substitutes - Low - Buses, boats, trains and automobiles are substitutes, but are usually not cost- or time-effective for most consumers Degree of Rivalry - Very high to intense - Multiple competitors, highly strategic stakes, often easily imitable innovation and low switching costs for consumersValue chainSupport activitiesInfrastructure – Flat organizational hierarchy – Terminal at JFK AirportHuman resource management – ​​Staff have access to managers and CEO – one culture/philosophy treating employees well and a reputation as a great place to work. Corporate profit sharing, high people productivity and rapid progress Technology: paperless cockpits, VoIP customer service, innovative culture Procurement: 9 new Embraer E190 aircraft. Fuel. Staff.Primary ActivitiesInbound logistics: low-cost, easy-to-use reservations system, ticketless travel, pre-assigned seating, paperless cockpits, search engine optimization and BlueTurn; to minimize time on the ground.