Retrospect and Prospect
The current evolution of the aviation sector in Europe can be described in terms of the combination of two main factors. The first concerns the liberalization process which began in the EU during the 1990s and was then succeeded by the boom of the low-cost carriers. This process has radically modified the competitive environment where traditional airlines operate. The nature of competition has changed as new entrants or potential entrants have different business models, especially concerning the network organization (i.e. low-cost carriers). The second factor is related to specific exogenous factors such as terrorism, epidemics, and globalization that have pushed the aviation industry into a ‘perfect storm’. The main concern is whether this model, successful during the 1980s and 1990s, is now sustainable in a market crowded by low-cost carriers. Within this frame of discussion, the objective of this study is to analyse the new strategic conduct of the full-service carriers (FSCs) in a more liberalized European market in terms of how they cope with global economic crises and increased competition with low-cost carriers (LCCs).
KeywordsBusiness Model Adjustment Cost Airline Industry Network Strategy Asian Crisis
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