Background

Airway Holding AG$,$ a successful medium$-$sized company in the logistics and transportation sector, is facing a strategic decision. CEO Markus Breuer has identified a potential acquisition opportunity in the European mid$-$range passenger airline industry. Until now, the company's goal has been to diversify into various sectors of the transportation industry. It already holds stakes in several freight companies and has experience in optimizing logistics processes. With the increase in travel opportunities and the growing connectivity of European cities, Breuer believes that passenger aviation, especially mid$-$range flights, represents an attractive growth market.

Strategic Goal: The company is considering the acquisition of the mid$-$sized airline EAW $($European Airways$),$ which specializes in flights within Europe. This airline currently operates a fleet of around $40$ aircraft and serves routes between major European cities such as London, Paris, Berlin, and Rome. The airline has been offered for sale to Airway Holding AG$,$ and there are several interested parties, meaning time is of the essence! Given that the European air traffic market is dominated by a few major airlines, Airway Holding AG must assess whether entering this industry would be profitable. As a result, Markus Breuer has tasked you, from the strategy department, with conducting a comprehensive industry analysis and providing a recommendation on whether the acquisition and entry into this sector would be a smart strategic move. The CEO expects a well$-$founded assessment of the industry based on Porter's Five Forces Model.

Briefing to the Strategy Department

Objective: Conduct an industry analysis of the European mid$-$range airline sector using Porter's Five Forces Model. Based on this analysis, you should give a clear recommendation on whether entering this industry would be a strategically sound decision for Airway Holding AG$.$