An analysis of trust governance mechanism in airline-airport relationship with resource dependence theory and transaction cost theory perspectives

Developments have transformed airport operations into more commercially focused centers in the airport sector. This situation has raised the question of how to execute interdependent airport-airline relationships. In interdependent relationships, trust-based governance is the least costly governance structure and is crucial for fostering cooperation in long-term relationships. Trust-based governance is a management approach where relationships and decisions are guided by mutual trust, transparency, and collaboration between parties. When considering the nature of the relationship, it is observed that environmental uncertainty and asset specificity are high. Transaction cost theory suggests that trust governance mechanisms can be the least costly governance structure under high uncertainty and asset specificity. Similarly, resource dependency theory indicates that in situations with high environmental uncertainty, dependencies can be managed through trust governance mechanisms. Therefore, this study analyzes the trust governance mechanism in airport-airline relationships. Drawing from the perspectives of resource dependency theory and transaction cost theory, this research analyzes the trust governance mechanism in airport-airline relationships using case studies of Turkish Airlines and Istanbul Airport relationship is governed by contract-based trust, while the Pegasus Airlines and Istanbul Sabiha Gokcen Airport relationship is based on goodwill-based trust. It can be argued that the history of the airport-airline relationship and the belief in the continuity of the relationship have a positive impact on trust.