Strategic airline alliances

Airline alliances: overview - Alliances goals - Impact of airline alliances on customers - Types of alliance Marketing agreements Codesharing Franchising Global alliances Equity alliance - The Future

Strategic Airline Alliances: Advantages for Major Airlines Being Aligned

SSome factors including the deregulation in the U.S and the liberalization in Europe of the airline industry are essential to understanding why the number of partnership agreements between airlines has increased during the last 25 years. These events, coupled with the continuous economic downturn and the 9/11 catastrophe seem to be the perfect framework for the tendency to develop airline strategic alliances. However, it has been observed that this trend was not followed during the period 2005-2008. The purpose of this paper is to analyze if a benefit was experienced by the major airlines who became a member of the current 3 big alliances compared to the major airlines that decided not to become a member or were not admitted into the alliances during 2005-2008. The methodology of this report includes an analysis of several airlines’ performance figures. These performance figures include the revenue passenger kilometers (RPKs), the passenger load factor (PLF) and also the market share (MS). The figures will be compared between the aligned airlines and others which have similar business models. The value of this paper is to reveal whether being aligned provides advantages to major airlines under a bearish airline market in a globalized environment.

Flexibility in Airline Business Models with Core Competence as an Indicator.

The airline industry is often unstable and unpredictable forcing airlines to restructure and create flexible strategies that can respond to external operating environmental changes. In turbulent and competitive environments, firms with higher flexibility perform better and the value of these flexibilities depends on factors of uncertainty in the competitive environment. A model is sought for and arrived at, that shows how an airline business model will function in an uncertain environment with the least reduction in business performance over time. An analysis of the business model flexibility of 17 Airlines from Asia, Europe and Oceania, that is done with core competence as the indicator reveals a picture of inconsistencies in the core competence strategy of certain airlines and the corresponding reduction in business performance. The performance variations are explained from a service oriented core competence strategy employed by airlines that ultimately enables them in having a flexible business model that not only increases business performance but also helps in reducing the uncertainties in the internal and external operating environments.

Identifying the core competence as a key requirement for business model innovation. The case of Airlines as a service industry

Core competencies form the basis of an organization’s skills and the basic element of a successful strategic execution. Identifying and strengthening the core competencies enhances flexibility thereby strategically positioning a firm for responding to competition in the dynamic marketplace and can be the difference in quality among firms that follow the same business model. A correct understanding of the concept of business models, employing the right core competencies, organizing them effectively and building the business model around the competencies that are constantly gained and assimilated can result in enhanced business performance and thus having implications for firms that want to innovate their business models. Flexibility can be the firm’s agility to shift focus in response to external factors such as changing markets, new technologies or competition and a firm’s success can be gauged by the ability it displays in this transition. Although industry transformations generally emanate from technological changes, recent examples suggests they may also be due to the introduction of new business models and nowhere is it more relevant than in the airline industry. An analysis of the business model flexibility of 17 Airlines from Asia, Europe and Oceania, that is done with core competence as the indicator reveals a picture of inconsistencies in the core competence strategy of certain airlines and the corresponding reduction in business performance. The performance variations are explained from a service oriented core competence strategy employed by airlines that ultimately enables them in having a flexible business model that not only increases business performance but also helps in reducing the uncertainties in the internal and external operating environments. This is more relevant in the case of airline industry, as the product (the air transportation of passengers) minus the service competence is all the same.

Industry-specific effect of CSR initiatives: hotels and airlines

Purpose – This study aims to examine the relationships between a firm's corporate social responsibility (CSR) activities and its performance and risk. The authors hypothesize that industry-level effects are highly determinant of the sign and magnitude of these relationships to establish a ranking of industries to identify the position of the most prominent tourism-related industries: hotels and airlines. Based on the cybernetic model of decision making and the heuristics thereof, shareholders base their investment decisions derived from CSR announcements on the idea that the industries behave differently; their fixed costs being a relevant factor. Design/methodology/approach – The authors estimate the industry-specific effects of CSR initiatives on firms' performance and risk using a sample of 583 announcements from the Spanish Stock Market. Findings – The results show that while CSR announcements have a positive effect on performance when the authors do not account for industry-specific factors, once the authors incorporate these factors into the analysis, the authors find that firm performance and risk vary quite substantially as a function of the industry to which the firm belongs. Interestingly, while the hotel industry presents an average behavior (standing at 9th position in returns, 15th in terms of risk, and 8th according to the ratio returns/volatility), the airline industry presents the worst situation of all industries: last in performance and last in risk. Practical implications – The results help managers assess their decisions and allocate CSR resources optimally. Originality/value – This article is the first attempt to empirically test and comprehensively detect the different relationships between CSR and firm performance across industries.

A study to identify the motivation compelling the business traveler to choose a specific airline in the Miami to Atlanta market and to develop a marketing strategy

The purpose of this study was to determine if the business traveler's behavior is influenced by brand loyalty. This brand loyalty, which became evident through the use of a survey, was then to be thoroughly evaluated. In order for this information to be best understood and utilized as the basis of future marketing strategies, much research was undertaken and its significance explained in relation to the airline industry as it exists at present. The results and conclusions of this study indicate that the airline industry is, for the most part, taking a successful approach in attracting business travelers. These travelers' business is highly valued due to the frequency with which they pay full-fare rates. The airlines view business travelers as a potential for great profit and their actions are in line with these philosophies.

Aviação comercial: tendências e satisfação dos passageiros

Dissertação de Mestrado, Ciências Económicas e Empresariais, 15 de Janeiro 2014, Universidade dos Açores.

Dispersão de preços e concorrência no mercado de transporte aéreo intraeuropeu : uma análise empírica

Dissertação de Mestrado em Ciências Económicas e Empresariais.

Internationalization process of SkyPro Shoes in the Middle East

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Management from the NOVA – School of Business and Economics

Management consulting labs: Project TAP

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Management from the NOVA – School of Business and Economics

Cash conversion cycle across industries

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Management from the NOVA – School of Business and Economics

The effect of social and environmental sustainability on firm resilience

Double degree

A comparison analysis of the marketing strategy of Lufthansa and Emirates in Germany

The objective of this paper is to perform an analysis of the marketing strategy of Lufthansa and Emirates in Germany. Since both airlines use a similar approach to increase brand awareness an in-depth analysis is implemented in order to identify potential differences. Hereby, consumer insights about the perception and expectation travellers have in common will be analyzed and assessed with quantitative data. Both airlines are well positioned in terms of their marketing strategy, but when Emirates is strengthen its marketing campaign with that pace, the Gulf carrier will certainly make use of its economic strength and can become a frightening threat for the Lufthansa Group on long-haul destinations. Finally, recommendations for future marketing activities for both airlines will be given.

Scheduled service versus personal transportation: the role of distance

This paper analyzes both theoretically and empirically the relationship between distance and frequency of scheduled transportation services. We study the interaction between a monopoly firm providing high-speed scheduled service and personal trans- portation (i.e., car). Most interestingly, the carrier chooses to increase frequency of service on longer routes when competing with personal transportation because provid- ing a higher frequency (at extra cost) it can also charge higher fares that can boost its profits. However, when driving is not a relevant option, frequency of service de- creases for longer flights consistently with prior studies. An empirical application of our analysis to the European airline industry con?rms the predictions of our theoretical model.

Scheduled Service Versus Personal Transportation: The Role of Distance

This paper presents a theoretical and empirical analysis of the relationship be- tween frequency of scheduled transportation services and their substitutability with personal transportation (using distance as a proxy). We study the interaction between a monopoly firm providing a high-speed scheduled service and private transportation (i.e., car). Interestingly, the carrier chooses to increase the frequency of service on longer routes when competing with personal transportation because by providing higher frequency (at extra cost) it can also charge higher fares which can boost its profits. However, in line with the results of earlier studies, frequency decreases for longer flights when driving is not a viable option. An empirical application of our analysis to the European airline industry confirms the predictions of our theoretical model. Keywords: short-haul routes; long-haul routes; flight frequency; distance JEL Classification Numbers: L13; L2; L93