The Airline Industry

1. Front Matter

   Pages i-xviii

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2. The Airline Industry in Perspective

   1. Introduction

      Pages 3-12

   2. Characteristics of the Airline Industry

      Pages 13-44

3. Coping with Crises in the Airline Industry

   1. Short- and Long-Term Reaction to Exogenous Demand Shifts

      Pages 47-61

   2. The Airlines Conduct during the Crises of 2001/2003

      Pages 63-73

4. The Rise of Low-Cost Carriers

   1. Effects of LCC Entry on Pricing in Aviation

      Pages 77-94

   2. Network Competition: the Coexistence of Hub-And-Spoke and Point-To-Point Systems

      Pages 95-105

   3. New Measures to Compare Network Configurations of Full-Service and Low-Cost Carriers

      Pages 107-128

5. Conclusions

   1. Retrospect and Prospect

      Pages 131-141

6. Back Matter

   Pages 143-184

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The debate on the future of the aviation sector and the viability of its traditional business practices is the core of this book. The liberalization of the EU market in the 1990s has radically modi?ed the competitive environment and the nature of airline competition. Furthermore, the new millennium began with terrorist attacks, epidemics, trade globalization, and the rise of oil prices, all of which combined to push the industry into a “perfect storm”. Airline industry pro?tability has been an elusive goal for several decades and the recent events has only accentuated existing weaknesses. The main concern of ind- try observers is whether the airline business model, successful during the 1980s and 1990s, is now sustainable in a market crowded by low-cost carriers. The airlines that will respond rapidly and determinedly to increase pressure to restructure, conso- date and segment the industry will achieve competitive advantages. In this context, the present study aims to model the new conduct of the ‘legacy’ carriers in a new liberalized European market in terms of network and pricing competition with l- cost carriers and competitive reaction to the global economic crises.

• Airline Business Models
• Airline Network Economics
• Low-cost Carriers
• Revenue Management
• game theory

• KLM Royal Dutch Airlines, Segrate, Italy

  Alessandro Cento

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