Title: Long-haul market entry by value-based airlines: dual business models support product innovation

Authors: Ian Douglas

Addresses: Department of Aviation, University of New South Wales, UNSW Sydney 2052, NSW, Australia

Abstract: Airline innovation is often driven by external factors. Evolving aircraft technology opens markets, while information technology reshapes distribution. New entrants in deregulated markets often adopt short-haul low-cost operations, where network connectivity is less important, and traditional costs can be converted to revenues. Buoyant conditions in 2005 saw new airlines serving long-haul routes. The survivors avoided competition in highly contested markets, and followed low-cost concepts. Carriers with large premium cabins had to compete in key markets and failed. Porter|s (1980) generic strategies, Markides and Charitou|s (2004) dual-business model study and Yoffie and Kwak|s (2002) judo strategy help explain this failure.

Keywords: low cost airlines; long haul airlines; airline strategy; airline innovation; business class airlines; market entry; product innovation.

DOI: 10.1504/WRITR.2010.034662

World Review of Intermodal Transportation Research, 2010 Vol.3 No.3, pp.202 - 214

Published online: 14 Aug 2010 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article