Drawing from Porter’s ‘Five Forces’ model with respect to ease/difficulty of market entry, critically assess the importance of any barriers to entry that remain, despite the freedom allowed through deregulation. Please use the following framework of potential entry barriers as a checklist with reference to your chosen route. In each case you must explain what the term means and apply it critically to air transport on your case study route:
a) economies of scale (do incumbents have an advantage over the small new entrant?)
b) capital requirements of entry (are these a significant deterrent for the new entrant?)
c) access to supply or distribution channels (is the new entrant disadvantaged here?)
d) differentiation by incumbents (airlines already established on the route) that distinguish them from the new entrant, and which mean that customers remain loyal
e) experience (which incumbents have and which the new entrant hasn’t got)
f) expected retaliation from incumbents
g) legislation or government action (are these likely to affect the new entrant more than the incumbents?)
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