Because it's relatively easy for weaker airlines to obtain credit, the industry has become saturated. Brand identity is important in the airline industry, and benefits larger airlines. Major carriers allocate considerable resources to marketing efforts. Frequent flier programs and other incentives have been successful in enticing travelers to fly with certain carriers. Barriers to entry are also heightened by the hub system in the airline industry.
Carriers can offer travelers more choices while tying up less capital through their hubs.
As a result, the hub system creates market power for large carriers. Bargaining Power of Suppliers Factors relating to the bargaining power of suppliers include the threat of forward integration and the concentration of suppliers in the industry. Suppliers are concentrated within the airline industry. Boeing and Airbus supply most commercial fixed-wing air carriers. Supplier concentration makes it difficult for competitors to exercise leverage over the supplier and obtain lower prices or play one supplier against another.