Air transport in Africa: toward sustainable business models for African airlines

Although there is a vast amount of literature on airline business models and their evolution in changing global landscapes, there is a general lack of research into the applicability of those models, traditionally defined in European and North American contexts, to the African scene. Implicit in this study is the hypothesis that the African environment is unique enough to warrant its own host of strategies, which may be distinctive enough to form part of a new strategic template, or business model. Initially, a review of existing literature is undertaken to profile the African aviation environment and evaluate existing airline business models and their evolution, both globally and in Africa. The methodology consists firstly of a cluster exercise, whereby 57 African airlines are analysed in terms of their network and size, to yield a number of heterogeneous groups which serve to identify the current business models of airlines on the continent. Following this, eight airlines (representative of the groups outlined in the cluster analysis) were subsequently selected for analysis in terms of the Product and Organisational Architecture framework. While it was evident that the traditional models are followed in Africa, in some instances variations were apparent. Full-service network carriers and regional carriers were concluded as being the most prominent and stable in the African market. The applicability of the low-cost carrier model in Africa was also examined at length, with mixed results. The analysis also raised network density and connectivity as essential components of business models for delivering profits in an African context

The strategic evolution of Aer Lingus from a full-service airline to a low-cost carrier and finally positioning itself into a value hybrid airline

Aer Lingus has been an unique airline as it transitioned from a full-service airline to a low-cost carrier and is currently positioned as a value hybrid airline. It has coexisted with Ryanair for decades and it encountered three imminent periods where bankruptcy prevailed from 1993 to 2009. The research aims to uncover the various strategies that were applied to structurally re-engineer the carrier in order to adapt to its evolving competitive landscape. The key pillars underpinning Aer Lingus’ turnaround as a value hybrid were as follows: strict adherence to capacity discipline; relentless cost control and value-adding, consumer-driven product differentiation; innovative partnerships including contract flying to alleviate its problematic seasonality issues inherent in Aer Lingus markets; and by re-engineering its Dublin-based hub airport. A visionary master plan for the hub was fabricated to capitalize on Ireland’s geographical positioning which targeted the traffic flows between UK/European and North American destinations through its synchronized connection network at Dublin

Conflicts in Development: Tourism and the Cattle Industry in Brazil

This paper challenges the conventional view that where there is a political elite, economic development will proceed along lines that sacrifice future generations for the benefit of the current ruling class. We find that shortfalls in the balance of payments will cause those in authority to promote activities that encourage tourism as a solution to balance of payments deficit. The vehicle for generating tourism is the provision of public goods. More traditional paths toward development particularly cattle ranching are displaced by tourist attractions. While motivated by myopic self-interest, the pursuit of public goods reduces the amount of debt transferred to future generations and thereby serves to redistribute wealth inter-temporally. Brazil over the period 1965 until 1998 is used as a test case.tourism, cattle, ecotourism, public goods

Liberalization of China-US air transport market: assessing the impacts of the 2004 and 2007 protocols

This paper examines China's considerations in reaching the 2004 and 2007 Air Service Agreement Protocols with the United States (US) and the impacts of such policy on the China–US market from the perspective of China. Analysis shows that the 2004 and 2007 protocols have profound impacts on the China–US market. The two protocols have been associated with phenomenal traffic growth and intensified competition. Passengers also benefit from much more choice in terms of both airlines and routing. Over time, Chinese carriers' operating performance and financial performance have gradually improved after the liberalization expressed in the protocols. However, the industry's hub-building initiatives are still seriously challenged by competing hubs in Seoul and Tokyo which have diverted substantial number of passengers moving between the China and US markets. Such issues have to be addressed in order to create a win–win outcome for both countries

An analysis of the issues and prospects facing SriLankan Airlines and its embedded partnership with Sri Lankan tourism

The long civil war, which ended in May 2009, poor economic performance and weak travel demand for Sri Lanka all coalesced in hindering the tourism industry. Consequently its aviation industry, which is dominated by the national carrier SriLankan Airlines, faced growing and difficult challenges. However, since 2009 the country has witnessed a boom in tourism, while an unprofitable SriLankan Airlines changed its financial and strategic circumstances by becoming a member of the Oneworld alliance in mid-2014, driven by its regional geography and proximity to India which had strict bilateral traffic rights for international incumbents from the UK and the UAE. This study analyses tourism, economic and passenger data combined with results from a passenger survey and expert interviews in order to identify the critical issues and future prospects of aviation and tourism in Sri Lanka. The authors conclude that its ageing long-haul fleet, together with an inferior economy-class product along with high fuel prices, capacity constraints and poor management practices are the major issues faced by SriLankan Airlines. On the tourism side, uncompetitive hotel rates, unnecessarily high government taxes, visa charges and the lack of international promotion were seen as the principle drawbacks. A survey at Colombo airport revealed that fare is the principle rhetoric for passengers taking SriLankan Airlines but when they want a wider range of additional and superior attributes they choose foreign carriers

A study into the hub performance Emirates, Etihad Airways and Qatar Airways and their competitive position against the major European hubbing airlines

Arabian Gulf carriers are changing the dynamics of international aviation. While travellers flying between East and West used to connect traditionally at European hubs, the rapid emergence and growth of Emirates, Etihad Airways and Qatar Airways have altered traffic flows, transforming their home bases into global air transport hubs. Thus, this study aims to assess the hub-and-spoke system efficiency of the three main Gulf carriers and compare it to major European hubbing airlines. The paper detects that the connectivity through European hubs is being increasingly challenged by the Gulf based hubs. The research findings have shown a high degree of connectivity and temporal coordination for Gulf carriers, clearly greater than European hubs. Qatar Airways and Etihad Airways provide about twice the level of intercontinental connectivity compared to their European counterparts

Twisted [(R3P)PdX] groups above dicarbaborane ligands: 4-dimethylsulfido-3-iodo-3-triphenylphosphine-closo-3-pallada-1,2-dicarbadodecaborane and 3-dimethylphenylphosphine-3-chloro-4-dimethylsulfido-closo-3-pallada-1,2-dicarbadodecaborane

The structural analyses of [3-(PPh₃)-3-I-4-(SMe₂)-closo-3,1,2-PdC₂B₉H₁₀] or [Pd(C₄H₁₆B₉S)I(C₁₈H₁₅P)], (I), and [3-(PPhMe₂)-3-Cl-4-(SMe₂)-closo-3,1,2-PdC₂B₉H₁₀] or [Pd(C₄H₁₆B₉S)Cl(C₈H₁₁P)], (II), show that in comparison with [3-(PR₃)2-closo-3,1,2-PdC₂B₉H₁₁] the presence of the 4-SMe₂ group causes the [PdX(PR₃)] unit (X = halogen) to twist about an axis passing through the Pd atom and the directly opposite B atom of the carbaborane ligand. The halogen atoms are located almost directly above a C atom in the C₂B₃ face, and the conformations of the [PdX(PR₃)] units above the C₂B₃ faces are not those predicted from molecular orbital calculations of the closo-3,1,2-PdC₂B₉ system. The fact that the variation from the predicted conformation is greater in the case of (I) than in (II) may be ascribed to the greater steric interactions induced by the I atom in (I) compared with the Cl atom in (II)

The strategic impact of airline group diversification: the cases of Emirates and Lufthansa

The airline industry is a diverse sector, requiring the support of a varied range of ancillary businesses such as maintenance, catering and travel agencies to carry out its activities. Many of these supporting businesses demonstrate the potential to drive wider profit margins despite generating lower revenues than the airlines themselves, making them attractive investment opportunities in a sector prone to volatile and often lacklustre trading. This study investigates two of the largest diversified airline groups, Germany's Lufthansa Group and Dubai's Emirates Group, each adopting a distinct approach towards diversification that may serve as a model for airline groups worldwide. The areas investigated were Cargo, Maintenance, Catering and Travel Services. The research found that whilst diversification may not always present the most attractive option financially, strategic factors can often outweigh such concerns. Business units studied were found to have variable prospects; particularly in the case of Catering, a sector on the rise – versus in-house Maintenance, which for airlines, is likely to see decline. The pursuit of third party revenue streams to offset weak internal trading and growth in competencies were found to be the key drivers of success. Interplay between segments was also apparent, showing that a well-organised diversification strategy can achieve robust cross-functional benefits and deliver significant value to the parent organisation

Organisational Trust: A Case Application in the Air Transport Sector.

From a management perspective, it is important to know what the likely feedback effects of efficiency drives might be on levels of employee trust. This paper looks to apply this important question to a case application in the air transport sector by testing the use of recent efficiency measures in a case sample of air transport companies using a modified aggregate trust model. The findings of this study suggest efficiency creating tactics do not lead to resentment and conditions of mistrust in themselves. Rather, occupational group (flight crew/non-flight crew), airline type (FSA,LCC, Charter), and level of seniority (management/non-management level) all have a more important bearing on the employee-employer relationship. Pre-existing labour agreements and legacy arrangements with senior and certain occupational groups were found to have a more damaging effect on the trust relationship than anything else. An underlying level of resentment and defensiveness has developed due to historical agreements being changed and have been observed most notably among FSAs, flight-crew and middle-management staff. The mediating role of the unions in the employee-employer trust relationship was found to be insignificant among the sampled air transport organisations

An analysis of ongoing trends in airline ancillary revenues

This paper examines the performance of the two core classifications of airline ancillary revenues, which are unbundled products and commission based income. It also investigates the willingness of passengers to pay (WTP) for these services together with what type of ancillary items are acceptable at a particular price point. The study found that passengers value a narrow range of perceived ‘necessity’ products and services such as food and drink, checked baggage and seat assignment as opposed to perceived ‘optional’ unbundled or commission based products/services. It also found significant differences in WTP for specific ancillary services based on carrier type (FSC/LCC/Charter), length of flight (long and short haul) and journey purpose (business, leisure, VFR)