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A quantitative means of comparing competitive advantage among airlines with heterogeneous business models: Analysis of U.S. airlines

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  • Moir, Loren
  • Lohmann, Gui

Abstract

Increasing heterogeneity amongst airline business models makes objectively comparing their competitive advantage increasingly difficult. In this study, we develop an instrument that objectively quantifies the competitive advantage of airlines within a single market, the US. The data sample includes nine US airlines with product and financial data gathered from 2011 to 2013. The consolidated data enable the calculation of a product index and a cost index. The product index incorporates four sub-indices (revenue, connectivity, convenience and comfort), while the cost index incorporates three sub-indices (unit cost, aircraft and labour). The developed model enables the identification of the hybrid business models that are successfully pursuing an integrated cost leadership and differentiation strategy. The results also confirm that competitive heterogeneity exists whilst demonstrating that competitive advantage can be mutually exclusive to the respective airline's strategic proposition.

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  • Moir, Loren & Lohmann, Gui, 2018. "A quantitative means of comparing competitive advantage among airlines with heterogeneous business models: Analysis of U.S. airlines," Journal of Air Transport Management, Elsevier, vol. 69(C), pages 72-82.
    • Handle: RePEc:eee:jaitra:v:69:y:2018:i:c:p:72-82
    DOI: 10.1016/j.jairtraman.2018.01.003
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    1. Albers, Sascha & Daft, Jost & Stabenow, Sebastian & Rundshagen, Volker, 2020. "The long-haul low-cost airline business model: A disruptive innovation perspective," Journal of Air Transport Management, Elsevier, vol. 89(C).
    2. Alhamzah Alnoor & Khai Wah Khaw & XinYing Chew & Sammar Abbas & Zeeshan Zaib Khattak, 2023. "The Influence of the Barriers of Hybrid Strategy on Strategic Competitive Priorities: Evidence from Oil Companies," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 24(2), pages 179-198, June.
    3. Albert Danso & Samuel Adomako & Joseph Amankwah‐Amoah & Samuel Owusu‐Agyei & Renata Konadu, 2019. "Environmental sustainability orientation, competitive strategy and financial performance," Business Strategy and the Environment, Wiley Blackwell, vol. 28(5), pages 885-895, July.
    4. Nguyen, Minh-Anh Thi & Yu, Ming-Miin & Lirn, Taih-Cherng, 2022. "Revenue efficiency across airline business models: A bootstrap non-convex meta-frontier approach," Transport Policy, Elsevier, vol. 117(C), pages 108-117.
    5. Klophaus, Richard & Yu, Chunyan, 2023. "Short-haul airline services in Europe and North America - A cross-business model and cross-continental analysis," Journal of Air Transport Management, Elsevier, vol. 109(C).
    6. Magdalina, Ana & Bouzaima, Martin, 2021. "An empirical investigation of European airline business models: Classification and hybridisation," Journal of Air Transport Management, Elsevier, vol. 93(C).
    7. Chiambaretto, Paul & Combe, Emmanuel, 2023. "Business model hybridization but heterogeneous economic performance: Insights from low-cost and legacy carriers in Europe," Transport Policy, Elsevier, vol. 136(C), pages 83-97.

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