5. ( 5 Points) Airlines on aggregate make low profits (long-run industry profit track below 1% of invested capital). At the same time, vendors and other suppliers (aireraft and aireraft engine producers, labor unions, fuel suppliers, etc.) achieve significant returns. Airfares after adjusting for inflation have declined due to unwillingness of buyers to pay a higher price. Alternatives to air travel (e.g., video teleconferencing) also put pressure to lower airfares. There are some barriers of entry to new, regional airlines or private air services. Finally, there is intense competition among the airlines given the large fixed costs and significant economies of scale. - Draft a diagram of the Porter 5-force model and, with reference to each force, explain the impact (high, moderate, low) for each force, and the factors that contribute to the high/moderate/low impact on the airline industry. 5. ( 5 Points) Airlines on aggregate make low profits (long-run industry profit track below 1% of invested capital). At the same time, vendors and other suppliers (aireraft and aireraft engine producers, labor unions, fuel suppliers, etc.) achieve significant returns. Airfares after adjusting for inflation have declined due to unwillingness of buyers to pay a higher price. Alternatives to air travel (e.g., video teleconferencing) also put pressure to lower airfares. There are some barriers of entry to new, regional airlines or private air services. Finally, there is intense competition among the airlines given the large fixed costs and significant economies of scale. - Draft a diagram of the Porter 5-force model and, with reference to each force, explain the impact (high, moderate, low) for each force, and the factors that contribute to the high/moderate/low impact on the airline industry