acmehomework.com€¦ · Web viewAlthough the increase of point-to-point flying has coincided...
114
THE IMPACT OF LCC CARRIERS ON HUB AIRLINES
Transcript of acmehomework.com€¦ · Web viewAlthough the increase of point-to-point flying has coincided...
THE IMPACT OF LCC CARRIERS ON HUB AIRLINES
AbstractAlthough the increase of point-to-point flying has coincided with the growth of the
aviation industry, very little research has been conducted to analyse the impacts of
these carriers on established hub airlines. The research is done with the intention
of filling up a small portion of this knowledge gap. The paper used a multi case
study design in to provide an in-depth understanding the impacts that low cost
carriers have on established hub carriers. The paper relied heavily on secondary
data that was collected from the OAG and CAPA databases. This paper is one of
the very few dealing with the impact of point-to-point flying on hub carriers.
Keywords- Hub carriers, point-to-point flying, airport economics, and airline
deregulation
Word Count: 17045
iii
Acknowledgements I would like to take this opportunity to especially thank …. my supervisor whose input and feedback was invaluable in the writing of this paper. His patient guidance and support allowed me to overcome the challenges posed from research to finished product.
A big thank you to all the lecturers and academics of ….. whose knowledge bestowed upon me during the course of the year culminated in the writing of this paper. Furthermore, a special thank you to the various industry experts who used their time to give me feedback and advice on the topic.
Last but not least, I would like to express my gratitude to all my master’s colleagues that not only made the time at ….. special, but also helped me develop in the field through shared experiences.
iv
Table of ContentAbstract..........................................................................................................................iii
Acknowledgements........................................................................................................iv
List of Figures................................................................................................................viii
Chapter 1: Introduction...................................................................................................1
1.1 Background........................................................................................................................1
1.2 The Era of Point-to-Point Flying..........................................................................................2
1.3 Impacts of the Introduction of Airbus 350 and Boeing 787.................................................2
1.4 LHR-PER Route...................................................................................................................3
1.5 Case Study: Malaysia Airlines.............................................................................................31.5.1 Background......................................................................................................................................31.5.2 Downfall...........................................................................................................................................31.5.3 Recovery Phase................................................................................................................................4
1.6 Statement of the Problem..................................................................................................4
1.7 Research Questions...........................................................................................................5
1.8 Research Objectives...........................................................................................................5
1.9 Significance of the Study....................................................................................................6
Chapter 2: Literature Review...........................................................................................7
2.0 Introduction.......................................................................................................................7
2.1 Historical Review...............................................................................................................72.1.1 Evolution of Airline Regulation Policies in the United States............................................................72.1.2 Airline Deregulation Policies in Asia.................................................................................................72.1.3 Airline Deregulation Policies in Europe............................................................................................8
2.2 Theoretical Reviews...........................................................................................................82.2.1 The Theory of the Complex Network Design....................................................................................82.2.2 The Hub Theory................................................................................................................................92.2.3 The Point-To-Point Theory...............................................................................................................9
2.3 Air Finance and Aviation Economics.................................................................................102.3.1 Benefits of the Hub Model.............................................................................................................102.3.2 Benefits of the Point-To-Point Model.............................................................................................112.3.3 Competitive Strategies Adopted by Non-Hub Airlines....................................................................122.3.4 Airline Financial Risk Mitigation Strategies.....................................................................................122.3.6 Reshape of the Airline Networks....................................................................................................14
v
2.3.7 Impacts of Airline Deregulation......................................................................................................15
2.4 Air Connectivity...............................................................................................................152.7.1 Factors that Influenced the Shift to Hub Connectivity....................................................................152.7.2 Factors that Influenced the Return to Point-To-Point Connectivity...............................................162.7.3 Low-Cost Carriers...........................................................................................................................172.7.4 Factors that Facilitated the Growth of Low-Cost Carriers..............................................................172.7.5 Impacts of Deregulation and Privatization on Hub Carriers...........................................................182.7.6 Impacts of Low-Cost Carriers on Airport Hubs...............................................................................192.7.8 Low-Cost Carriers in Long-Haul Airline Operations........................................................................202.7.9 Comparative Review of Connectivity in the Middle East and Europe.............................................20
Chapter 3: Methodology................................................................................................22
3.0 Introduction.....................................................................................................................22
3.1 Research Design...............................................................................................................22
3.2 Research Approach..........................................................................................................223.2.1 Miles and Snow Strategy................................................................................................................23
3.3 Data Collection and Tools.................................................................................................233.3.1 Library Research.............................................................................................................................233.3.2 Case Study......................................................................................................................................24
3.4 Ethical Issues...................................................................................................................27
3.5 Limitations of the Research Methodology........................................................................27
3.6 External Validity...............................................................................................................28
3.7 Conclusion.......................................................................................................................28
Chapter 4: Analysis and Results of the Study..................................................................29
4.1 Introduction.....................................................................................................................29
4.2 Case Study 1: Malaysia Airlines and the Growth of AirAsia...............................................294.2.1 Growth and penetration of low-cost carriers in Asia (Air Asia)......................................................314.2.2 Airline Market Share on Domestic Routes......................................................................................334.2.3 AirAsia Interlining with AirAsia X....................................................................................................35
4.3 Case Study 2: Cathay Pacific and the Purchase of HK Express............................................374.3.1 Growth and Transformation of Cathay Pacific................................................................................374.3.2 Competition from High-Speed Trains.............................................................................................42
4.4 Case Study 3: SAS Airline and the Growth of Norwegian Air.............................................424.4.1 Political Limitations........................................................................................................................444.4.2 Norwegian Air Shuttle....................................................................................................................44
4.5 Case Study 4: The Merger between Iberia and British Airways.........................................45
vi
4.5.1 Launch of Iberia Express.................................................................................................................464.5.2 LEVEL (Airline Brand)......................................................................................................................484.5.3 Carrier within Carrier......................................................................................................................49
4.6 Chapter Summary............................................................................................................50
Chapter 5: Conclusion, Interpretation, and Discussion...................................................51
5.1 Introduction.....................................................................................................................51
5.2 Summary of the Research................................................................................................51
5.3 Discussion and Interpretation of the Findings...................................................................52
5.4 Significance of the Findings..............................................................................................53
5.5 Recommendations of the Research..................................................................................53
5.6 Recommendations for Further Research..........................................................................54
5.7 Conclusion.......................................................................................................................55
References.....................................................................................................................56
vii
List of FiguresFigure 1- Expenditure vs Revenue for the Period between 2009 and 2013..............................34
Figure 2- Malaysia Airlines Financial Report for 2013 and 2014..............................................35
Figure 3- Low-Cost Growth vs Full-Service Growth in Asia......................................................36
Figure 4- Asia Pacific LCC annual seat capacity (red within and blue to/from): 2008 to 2018...37
Figure 5- Malaysia Aviation....................................................................................................38
Figure 6- Increase domestic market share..............................................................................38
Figure 7- Malaysia Airlines Fleet Summary.............................................................................39
Figure 8- AirAsia X Statistics...................................................................................................40
Figure 9- Hong Kong seat capacity share (% of seats) by airline: week commencing 25-Mar-2019......................................................................................................................................42
Figure 10- HK Express capacity share by country: week beginning 25th March 2019...............43
Figure 11- Cathay Pacific Fleet Summary: as of March 25th 2019...........................................45
Figure 12- Fleet Level.............................................................................................................52
viii
Chapter 1: Introduction1.1 BackgroundIn the works of Çiftçi and Şevkli, (2015), the point-to-point flying model is defined as
direct flying from one point to a specific destination, instead of flying into and out of one
or two major airports. The model was popular in the United States before the
deregulation act was passed; this was influenced by the fact that the aviation industry
was controlled by the government; therefore, many airlines flew direct, low demand
routes between small cities (Johnston & Ozment, 2013). One of the biggest advantages
of point-to-point flying is reduced travel time. Passengers are able to save time without
having long layovers between connecting flights and would not have to deal with the
consequences of a delayed flight (Johnson, Hess, & Matthews (2014). After
deregulation airline routing structure changed and many aviation companies adopted
the hub-and-spoke model, however, the business press noticed the financial success of
carriers offering direct flights. Some of the airlines that use the point-to-point model
include Southwest Airlines, Jetblue Airways, and Ryanair amongst others.
According to a journal by Ryerson and Kim (2013), a hub is a central airport, through
which flights are interconnected, hubs serve as transfer points that get passengers to
their final destinations. The journal further introduces the concept of spokes and defines
it as the routes that planes take out of the hub airports. Therefore, hub carriers are
airlines that operate under the hub-and-spoke network model. This model became
popular after deregulation in the aviation industry. The Hub-and-Spoke model is often
used by airlines because it is efficient, flights are cheap, and it allows for easy
expansion. However, this method also has its downfalls. First, facility costs are high
(Maasoumi, 2015). Cook and Billig (2017) estimated that up to 60% of flights only pass
through hubs to make outbound connections. Many successful airlines, especially in the
Americas, use factors of both models to create business models that work best for both
the passenger and the company. Some of these include American Airlines, United
Airlines, Alaska Airlines and Delta Airlines among others.
1.2 The Era of Point-to-Point FlyingOver the past years, the aviation industry has experienced rapid growth. However, as a
result of increased competition among airlines, soaring oil prices and financial crisis
followed by the diffusion of liberalization and deregulation on international levels,
adaptation to an ever-changing environment has been quite difficult, this, in turn, has
influenced cost reductions and the restructuring of most airline companies (Park et al.
2013).
Nevertheless, during these challenging years, a group of airlines were able to maximize
profits by developing a cost advantage, no-frills, and a point-to-point network business
model in contrast to the traditional hub-and-spoke national flag carriers. The low-cost
business model is currently quite popular and is advocated as an alternative for the
traditional airlines business models which, on the contrary, aims to cover all market
segments and city-pairs, and therefore these airlines are named ‘full-service carriers’
(FSCs) (Park et al. 2013).
1.3 Impacts of the Introduction of Airbus 350 and Boeing 787The introduction of the Airbus 350 and Boeing 787 influenced the development of long-
haul Low-cost carriers that are operated with the aim of cost minimization (Gross &
Lück, 2016). Built with an advanced, single-barrel composite fuselage and robust
design, the two planes enable cost efficiency by cutting down operating costs by 15%
and maintenance fees by 30% per cent (Sarlioglu & Morris, 2015). Less scheduled
repairs ensure more airtime and ultimately increased revenues. In addition, the planes
consume less fuel in comparison to other aircraft. The additional capacity of these
planes provides airlines with the lowest operating cost per seat. The planes also have
larger cargo holds that facilitate the transportation of cargo, which is a major source of
revenue for airline companies (Sarlioglu & Morris, 2015). Besides being more cost-
efficient to operate, the planes offer a more comfortable in-flight experience; this makes
longer direct flights more feasible. Because of its fuel efficiency, the planes are able to
fly further than other aircrafts, as a result, opening up more than 50 new point-to-point
routes all over the world, such as the London to Perth (LHR-PER) route which will be
discussed in the next subsection (Halpern, Graham & Dennis, (2016).
2
1.4 LHR-PER RouteThe growth of new flying routes has mainly been influenced by the introduction of low
cost carries back in 2016 (Halpern & Graham, (2016). Airlines have become more
active in route development in order to attract more customers. Qantas launched its
direct London to Perth route (LHR-PER) in March 2018, since then, the flight has
facilitated international and interstate visitors travelling to Perth and the rest of West
Australia (Lee & Horton, 2018). In addition, the new route is three hours faster as
compared with the fastest existing one stop-connection at Qatar Airways. Before the
launch of the route, many people dubbed it impossible to convince passengers to fly
17.5 hours non-stop from Perth to London, however a report by Deloitte that the route
stirred up economic growth between the countries as more and more passengers used
the route (Economic contribution of Qantas’ London-Perth direct flight, 2019). The flight
has also been rated as the airline’s outstanding performer with 14points above average;
furthermore, the route is 99.5% reliable with only four flights being cancelled, all
because of technical issues (Lee & Horton, 2018).
1.5 Case Study: Malaysia Airlines1.5.1 Background The airline began operations in 1947 as Malayan Airways Limited. Later on, in 1972 the
airline's assets were divided to form Singapore Airlines and Malaysian Airline System.
The Airline received numerous awards from the aviation industry, such as a five-star
rating from Skytrax in 2005, 2009 and 2013; one among seven Airlines in the world with
this rating, the airline also received recognition from World travel awards as the leading
airline in Asia. However, being a hub carrier, the Airline struggled with cutting costs in
order to compete with new low-cost carriers since early 2000. The airline was under a
lot of pressure as compared to its peers in the Asian region, this is because, AirAsia, the
largest low-cost airline in Southeast Asia, was established in Malaysia. This posed great
competition to the airline as passengers started preferring AirAsia to Malaysia Airlines
(Ping et al., 2019).
1.5.2 Downfall In 2011, the company experienced huge losses despite the fact that other competing
airlines were thriving. The losses were attributed to, increased fuel prices and high
3
operating costs brought about by unprofitable route cutting and long-haul destinations
such as South Africa. In 2014, the Airline was hit again when Malaysia Airlines lost two
planes in less than six months. The combined causalities of 537 passengers
exacerbated the airline’s financial troubles and led to the renationalization of the airline
(Gavrea & Dézsi, 2018).
1.5.3 Recovery PhaseFor the reasons above, the airline initiated a turnaround strategy that was aimed at
restructuring the airline’s management; furthermore, the Malaysian government’s
strategic investment fund took over the company and formulated a $1.66 billion
restructuring plan (Ping et al., 2019). The plan involved a comprehensive overhaul of
the airline that included a specific 12-point package of measures whose combined
delivery would enable the airline to achieve sustained profitability within the first three
years of delisting. In 2016, the Airline Company revised its fares, offering prices that
match or beat those offered by low-cost carriers, in order to ensure that the airline
effectively competes with full-service carriers, like Cathay Pacific and Singapore Airlines
(See & Rashid, 2016). The company also introduced frequent discounts to passengers
in order to attract more clients. Also, they refurbished their business class and
economy class seats in order to provide a comfortable in-flight experience (Farooq,
Salam, Fayolle, Jaafar, & Ayupp, 2018).
1.6 Statement of the ProblemThe aviation industry is being faced with excess capacity, increased competition and
rising oil prices; as a result, most airlines have been prompted to be innovative in order
to ensure continued profitability. According to Williams (2017), the deregulation Act of
1978 was aimed at creating a healthy competitive environment where the forces of
demand and supply could interact freely. However, competition has intensified thus
resulting in industry consolidation as operators adjust to the realities of a deregulated
environment.
The issue of growth in the aviation industry presents both threats and opportunities for
airlines, opportunities in the sense of the development of new markets through the
signing of open skies agreements between countries. On the other hand, each player in
the industry now faces more competition from other players as each one of them ups
4
their game in an effort to control the market. Many regional airlines have opted to code-
share with major carriers to survive in the industry. Airlines must, therefore, formulate
appropriate strategies to quickly tap into such markets in order to reap the potential
benefits.
Various studies have been conducted to address the impacts of point-to-point flying on
economic variables. Also, research has been conducted to prove a comparative
analysis of both network systems, however, little has been done to address the impacts
of point-to-point carriers on established hub carriers. Therefore, there is an academic
gap on addressing the impacts of point-to-point flying on hub carriers, this study has the
intention of filling this gap through the use of case studies, it will address the challenges
that the different carriers have faced over the years, and the strategies that the airlines
have taken in order to compete effectively with other Airlines particularly low-cost
carriers.
1.7 Research Questions1. What are the impacts of the introduction of low-cost carriers in markets with
established full-service carriers?
2. What are the economic impacts of point-to-point flying on established hub
carriers?
3. What were the effects of airline deregulation and privatization on hub
carriers?
4. What factors have contributed to the return of point-to-point connectivity?
1.8 Research Objectives1. To analyse the impacts of the introduction of low-cost carriers in markets with
established full-service carriers
2. To investigate the economic impacts of point-to-point flying on established
hub carriers
3. To expound on the effects of airline deregulation and privatization on hub
carriers
4. To establish factors that have contributed to the return of point-to-point flying
5
1.9 Significance of the StudyThe findings of this research will be beneficial to the management of hub carriers, in
determining the effectiveness of the competitive strategies being employed in order to
compete efficiently in the industry. The study will also be beneficial to the whole airline
industry in general, especially among new entrants who are struggling to compete with
the already established carriers. The research will help boost the understanding of
strategies that these airlines will need to adopt in order to compete with other airlines.
The research will also provide an ample base for further research for other scholars,
little research has been conducted to establish the reasons for the emergence of new
airline companies and the reasons why they have managed to stay competitive despite
harsh economic environments.
6
Chapter 2: Literature Review2.0 IntroductionThe chapter provides a review of extant research in the domain of point-to-point flying
and hub carriers relevant to the current study. The literature review includes books and
peer-reviewed journal articles published within the last 10 years. The literature review
presents the historical review, theoretical review, airline finance and aviation economics,
and airway connectivity.
2.1 Historical Review
2.1.1 Evolution of Airline Regulation Policies in the United StatesSince 1938, the Federal Civil Aeronautics Board has regulated all domestic air transport
routes in the United States (Starkie, 2016). The board determined the fares, routes, and
schedules of airline companies. However, airlines that flew intrastate routes were not
regulated by the board but by the governments in which they operated. Leick and
Wensveen (2014) report that some of the United States airlines had organised into the
hub-and-spoke networks prior to the Deregulation Act. However, most airlines used
point-to-point networks since regulations restricted route entry and exit. This rigid
system began to encounter difficulties in the 1970s due to the oil recession and the
introduction of wide-body aircraft. This, in turn, gave birth to the Airline Deregulation Act
which was passed in 1978 (Pickrell, 2017). The Act was aimed at deregulating the
airline industry in the United States. The Act prevented the federal government from
controlling fares, routes, market entries, and flight schedules (Button, 2017). This
allowed airlines to increase the number of routes they flew, charge competitive prices,
and enter foreign markets that were once dominated by Pan-American World Airways.
Prior to deregulation, two U.S. airlines, Western Pacific and Southwest, used point-to-
point networks in the deregulated intrastate markets of California and Texas
respectively (Williams, 2017). After the Deregulation Act was passed, these airlines
began to embrace the low-cost carrier flight model (Bitzan & Peoples, 2016).
7
2.1.2 Airline Deregulation Policies in Asia Since the US deregulated its airlines in 1978, reforms of airline regulation have
gathered pace and now are taking hold in developing regions, especially in Asia. In
November 2009, the Association of South East Asian Nations Senior Transport Officials
Meeting (ASEAN-STOM) signed a memorandum of understanding with the intent of
endorsing a multilateral agreement on full liberalisation of air freight services (Laplace &
Latgé-Roucolle, 2016). The deregulation of airlines in Asia has led to rapid growth and
expansion of low-cost carriers, increased competition between airlines, and facilitated
network growth. In a deregulated environment, airlines have to adapt their strategies in
response to high competition (Zhang, Hanaoka, Inamura, & Ishikura, 2017). Airlines
have the freedom to vary fares to develop their networks. The deregulation of airlines
has also facilitated the expansion and growth of many airlines beyond their home
markets to reach out to other countries in the region (Bowen, 2016). AirAsia and Lion
Air are good examples of airlines that have expanded greatly in the past few years as a
result of deregulation policies.
2.1.3 Airline Deregulation Policies in EuropeAirline deregulation in Europe began in 1987 when the European Union passed the
“Single European Act” aimed at doing away with government regulation on the airline
industry (Button & Swann, 2017). The deregulation process was largely completed by
April 1997 (Button & Swann, 2017). This move was motivated by the desire to promote
a less regulated economic environment; also, the European countries feared that they
may not be able to compete effectively with the US airline companies who had already
implemented the Deregulation Act in 1978 (Burghouwt, 2016). The new regime
heightened competition among airlines and also catalysed the growth and development
of other airline companies. With increased competition among airline companies, air
travel prices reduced significantly to affordable rates (Bartlik, 2016).
2.2 Theoretical ReviewsThe section presents an overview of the theories relevant to the current study. Some of
the theories that will be discussed under this section are the theory of the complex
network design, the hub theory, and the point-to-point theory.
8
2.2.1 The Theory of the Complex Network DesignIn the last few years, the network theory has gained scientific interest and scientific
models have been used in different fields. However, this trend has faced a number of
difficulties as existing models have not been able to clearly describe network properties
of many real-world systems whose complexity is yet to be understood. Airport transport
networks are very complex because agents interact to gain significant benefits (Gillen &
Morrison, 2005). This interacting process may become a permanent feature and prompt
a structure change thus leading to a new or macrostructure, for example, the creation of
activity clusters. Air transport systems have over the past years been experiencing a
variety of such clustering processes. An example is provided by airlines’ alliances. The
main reason why carriers cooperate or form alliances stems from cost reductions they
can thus obtain. Being a member of an alliance impacts on the carriers’ strategy for a
long time and also influences the network configuration adopted by partners and
competitors (Gillen & Morrison, 2005).
2.2.2 The Hub TheoryAfter the enactment of the Airline Deregulation Act, many domestic carries began to
embrace the hub-and-spoke network strategy for their operations. Ryerson and Kim
(2013) suggested that the hub-and-spoke network pattern occur when all flights are
directed to a central location. This began as a pattern of scattered airports all over a
region and as time went by, comprehensive routes between cities began to develop
thus leading to increased connectivity. Gradually, more comprehensive routes between
cities began to emerge. As a result of rapid growth and improved efficiency in operating
systems, a central hub was developed (Ryerson & Kim, 2013). The hub served as a
centre of economic and flight activity in the region and surrounding spokes that will
directly deal with it (Button, 2017). This pattern was introduced and developed by
commuter groups in the United States since the early 1980s. The growth of hub-and-
spoke networks allowed medium and large size airports that limited in passenger
demand in the catchment area to become the primary hubs in their respective regions
(Button, 2017).
9
2.2.3 The Point-To-Point TheoryThe point-to-point theory is slightly different from the hub-and-spoke theory as it puts
more emphasis on flying directly from one point to another, regardless of the size of the
plane (Cook & Goodwin, 2008). Planes fly directly from one destination to another with
no stopovers or layovers at the hub. The point-to-point model was very popular in the
United States before the introduction of the deregulation policies in the 1970s (Morrison
& Winston, 2010). This is because the government had control over airline routes;
therefore, many airlines flew direct. Also, this strategy was widely used due to the lack
of sufficient flights to establish more complex networks. After the passing of the
Deregulation Act, most airlines adopted the hub-and-spoke strategy. However, in the
1980s, the massive number of flights through the hub systems resulted in congestion
and increased delays in flights (Morrison & Winston, 2010). This created a market gap
for airlines to provide services that are more practical such as point-to-point flying. This
approach was first adopted by Southwest Airlines that began by offering short-haul
services at affordable rates. By avoiding the big city routes, the airline thrived in
providing point-to-point airline services.
2.3 Air Finance and Aviation Economics
2.3.1 Benefits of the Hub ModelSince the regulatory policies were removed, airline companies have to make a decision
between two operating systems, the hub-and-spoke carriers or the point-to-point
operating system. The hub-and-spoke model has often been used by many airlines all
over the world. This is because it allows airlines to be efficient through the reduction of
the number of operated flights which, in turn, reduces landing and take-off fees (Marti,
Puertas, & Calafat, 2015). According to Rai (2013), the hub-and-spoke model enables
airlines to schedule their flights efficiently all over the hub thereby allowing passengers
to get from one point to the other with ease.
According to Belobaba, Odoni, and Barnhart (2015), the hub-and-spoke model allows
airlines to have a lot of passengers flying at one time without having to worry about
positioning aircraft or losing baggage thereby allowing airlines to focus less on
transporting crew members by centralizing them around one or two hubs. This efficiency
also allows airlines to increase flight frequencies since routes into and out of hubs will
10
have a higher demand than flights between two non-hub destinations will (Switzer et al.,
2013). Also, the hub-and-spoke model provides airlines with the option to choose which
planes to use on each route more effectively thereby reducing costs and increasing
efficiency.
The hub-and-spoke model allows airlines to reduce seat-mile costs (Huang & Wang
2017). As route demand increases, especially between two major hubs or international
destinations, airlines can use larger aircrafts. This means that they can fly more
passengers between two cities with fewer flights which allow them to reduce airport fees
and crew costs. Lower seat miles allow airlines to have higher profit margins or lower
their prices to better compete with other airlines. According to Cook and Goodwin
(2008), the hub-and-spoke model makes it easier for airline companies to open up new
routes, therefore, allowing people to access new destinations. In turn, this increases
their revenue base thus encouraging easy expansion.
2.3.2 Benefits of the Point-To-Point ModelOne of the major advantages of point-to-point flying is reduced time travel. Passengers
are able to save time without experiencing long layovers between flights. As a result,
point-to-point flying eliminates the problem of missed flights. According to Marti et al.
(2015), point-to-point flying reduces the total travel time. This is primarily because point-
to-point flying eliminates the intermediate stopovers hence avoiding circuitous routings
and increased aircraft speeds. The point-to-point model also decreases airport
dependency. Many hub-and-spoke airlines and their alliance partners operate flights
through a limited number of hubs, each of which represents a high share of the
business. The dependency on these airports reduces the number of new routes that
enter the airport hence limiting the entrance of new airlines or the addition of new routes
(Vasigh, Fleming, & Tacker, 2018). However, the point-to-point model reduces this
dependency greatly as every route from each airport is actively important. In addition,
the removal of a “dependent airport”, point-to-point flying reduces the risk that an airline
would face in case of route failure. Point-to-point airlines simply eliminate the struggling
route while hub-and-spoke airlines may be forced to make dozens of accommodations
for passengers affected by the route change. The elimination of hub-and-spoke routes
might also severely damage the profits of the airport which depends on the hub-and-
11
spoke airlines for the majority of its business (Besanko, Dranove, Shanley, & Schaefer,
2016).
2.3.3 Competitive Strategies Adopted by Non-Hub AirlinesNetwork airlines have increasingly concentrated their flights in a small number of
airports that they dominate and from which they operate their hub-and-spoke routes
(Kjærnes & Qvist, 2011). During the recent decades, Norwegian Air Shuttle ASA (NAS)
has managed to become a highly successful company and is today the third-largest
European low-cost carrier and the second largest airline in Scandinavia (Hudson &
Hudson, 2017). The airline has managed to compete effectively with other giant
companies such as Scandinavian Airline System and Singapore Airlines despite facing
challenges such as low profit margins.
2.3.3.1 Norwegian Air Business Strategy The company uses a twofold business strategy. It aims to become the preferred
supplier of air travel in its selected markets and generate excellent profitability and
return to its shareholders (Hudson & Hudson, 2017). The Norwegian Airline aims to
attract customers and stimulate markets by providing operational excellence, helpful
friendly service, and low operating costs which results in low ticket prices. In addition,
the company offers customers the “freedom to choose” therefore ensuring a broader
market reach. According to Baltheiser (2018), providing a comprehensive and attractive
route network is crucial. Therefore, the Norwegian airline is constantly working to offer a
route network consisting of both high frequency business destinations to primary
airports within and or outside of Scandinavia as well as popular destinations for leisure
travellers (O’Brien, 2019).
By adopting the strategies mentioned above, the Airline has been able to reduce costs
through the exploitation of density economies and offering higher flight frequencies
which are highly valued by business and connecting passengers (Chen & Pawlikowski,
2015). While competition between network airlines operating at different hubs to attract
connecting passengers may be intense, non-hub airlines have typically benefited from a
rather weak competition with low-cost airlines (Nordbø & Raza, 2016).
12
2.3.4 Airline Financial Risk Mitigation StrategiesThe primary objective of risk mitigation strategies in aviation is usually detailed as being
a plan to implement risk controls that reduce the severity of each identified specific risk
(Morrell, 2018). This sub-section will provide a review of different airline companies and
the financial risk management strategies that they use. The airlines discussed are
Southwest Airlines and Singapore Airlines.
2.3.4.1 Southwest AirlinesThe Texas based airline uses hedging contracts in oil purchases; this has proven to be
effective over the years. In 2005, the airline hedged 85% of its fuel consumption (Lim &
Hong, 2014). This move proved very effective as it resulted in a hedge benefit of $892
million for the year. In addition, the company also uses interest rate swap agreements in
order to reduce volatility of the net income (Morrell, 2005). Hedging instruments are
also intended to take advantage of times when the short-term interests are substantially
lower than the fixed interest rates. Furthermore, there are provisions in the agreement
with counterparties that allow the airline to terminate early or ask for additional security
to be posted when the market risk exposure goes beyond what is expected (Morrell,
2005).
2.3.4.2 Singapore AirlinesSingapore Airlines highest operating expenditure is on fuel costs, unlike for the
American airline, which constitute 35% of the total operation costs of the airline. The
company’s financial risk management program consists of utilising forward currency
contracts, interest swap contracts, jet fuel option, and jet fuel interest contracts (Morrell
& Swan, 2006). Interest rate swaps are used to mitigate fluctuations in the interest rate
costs (Morrell & Swan, 2006). Counterparty risk is managed by following a policy that
limits the aggregate exposure of financial instruments held by any one party.
2.3.5 External Factors that Influence the Airline IndustryLike any other business, the airline industry is impacted by changes in its external
environment. This-sub section review focuses mainly on the environmental and political
factors that influence decision-making in the aviation industry.
13
2.3.5.1 Environmental FactorsIn light of the work by Myre (2015), the effect of environmental factors on the airline
industry is higher than in most industries. This is because fuel is a major environmental
pollutant. As a result, most airline companies invest in more fuel efficient and
environmentally friendly aircraft (Myre, 2015). The earliest efforts to reduce toxic
emissions began in the 1960s with efforts being focused on reducing engine fumes
(Lynes & Dredge, 2006). The earlier aircrafts emitted visible smoke that was hazardous.
The industry invests in research and development to manufacture more efficient and
environment friendly aircrafts (Lacar, 2009). It is focused on reducing emissions and the
carbon footprint.
2.3.5.2 Political FactorsPolitical factors can generally vary between nations. However, the aviation industry is
global and spans the entire world. According to an industry report, it generated $709
billion globally in 2016 (Merkert & Swidan, 2019). However, government regulations are
required to address concerns like safety, passenger security, and several other issues
(Shaw, 2016). In the US, deregulation took place in 1978 which reduced the restrictions.
With it, the popularity of air travel rose thereby boosting revenue (Morrell & Swan,
2006). Deregulation eliminated the regulations related to prices and entry into domestic
markets. However, the situation is not the same in all the markets (Namukasa, 2013).
Many aviation markets are still heavily regulated; in some, the bilateral agreements are
still highly restrictive. This limits competition and revenue. Moreover, international flights
are more heavily regulated than the domestic flights (Namukasa, 2013).
Increased government regulation affects the industry negatively (Shaw, 2016). Williams
(2017) argued that government regulation or political factors play an important role in
determining the growth and proliferation of the airlines industry. Over time, one thing
has gotten absolutely clear; the growth of the airlines has benefited governments,
businesses, and individual passengers (Williams, 2017). Airlines add or trigger trading
activities. This produces economic benefits and, in turn, benefits the entire society.
Hence, there is a need to strengthen the partnership between the government and the
industry. Organisations like the International Civil Aviation Organization are working to
deepen this relationship (Shaw, 2016).
14
2.3.6 Reshape of the Airline NetworksOne major differentiating factor between the air transportation system and other means
of transport is the topological network configuration. According to Burghouwt (2007), a
network is a set of interconnected nodes. The author further argued that
interconnectedness should not only be considered from a spatial view but also from a
temporal view point of view. The Deregulation Act of 1978 caused profound changes in
the aviation and aeronautical industry. Airline networks also suffered a deep reshape. A
good example is the expansion of Delta Airlines route network arising from the merger
with Western Airlines (Mattos & Fregnani, 2016). Western Airlines entered an operating
agreement with regional airline SkyWest to add feeder lines between Salt Lake City and
smaller cities, many formerly served by Western (Mattos & Fregnani, 2016). The joint
service was named Western Express. Western and Delta Air Lines announced a merger
agreement that led to Delta's acquisition of Western on September 9, 1987. Western
became a wholly-owned subsidiary of Delta on December 19, 1987 (Burghouwt, 2007).
2.3.7 Impacts of Airline DeregulationMattos and Fregnani (2016) described the deregulation effects in terms of four stages of
evolution. The first period was characterised by the expansion of the traditional and
bigger airlines and the consolidation of the hub-and-spoke model. All this increased the
load factor of flights and also offered people more and new destinations. The second
period was a counterbalancing growth in point-to-point services largely by new low-cost
carriers, the most notable of which was Southwest Airlines. The third wave is
characterised by the growth of regional services provided by regional carriers which fill
the gaps left by major carriers. The fourth period - which we are in at present - registers
the unbundling of fares with many things that used to be included in a ticket price, but
are now charged extra or are no longer offered at all. At the same time, there is a
reduction in the number of airlines through consolidation (Mattos & Fregnani, 2016).
2.4 Air ConnectivityAir connectivity can be broadly defined as the ability and ease with which passengers
and cargo can reach destinations by air (Allroggen, Wittman, & Malina, 2015). The sub-
section will examine point-point carriers, low-cost carriers, and hub carriers.
15
2.7.1 Factors that Influenced the Shift to Hub ConnectivityBefore the Deregulation Act of 1978 was passed, airline companies used the point-to-
point connectivity strategy (Fu, Oum, & Zhang, 2010). Airlines obeyed an intricate
network of rules elaborated by the federal government which determined whether a new
airline could fly to a particular city and even specified the airfare; however, this changed
after the Deregulation Act was passed (Button, 2017). Without government controls on
airlines and their route structures, the airline business became a more competitive
industry (Goetz & Vowles, 2009). Many airlines dropped unprofitable routes which were
no longer subsidised in favour of more heavily travelled and profitable routes. New
airlines sprung up, some literally overnight, to take advantage of new markets. To
improve efficiency and cut costs, airlines began to develop the "hub-and-spoke system"
where some airports are used as a connecting point for passengers from different
origins and destinations (Burghouwt, 2016).
2.7.2 Factors that Influenced the Return to Point-To-Point ConnectivityAccording to Wu et al. (2017), the development of hub airports over time resulted in
very heavy congestion at airports. The Federal Aviation Administration reported that in
1987, 3200 airports were available to the public with the top 50 commercial airports
accounting for more than 80 per cent of all passenger enplanements (Graham, 2017). In
essence, airline activities then were characterised by "hub to hub competition" where by
airlines were required to be as efficient as possible when building successful hubs
(Graham, 2017). However, the airport facilities became heavily overused. Many airports
which were built to handle fewer than 300 flights per day were now handling more than
1,000 flights (Janic, 2017). Much of the scheduling problem at major airport hubs was
as a direct result of airlines' attempts to meet customers’ demands; that is, providing
service at the times passengers want to fly. However, people tend to want to fly at the
same time hence all the airlines schedule flights around those times. The inevitable
result is delayed flights which hurt everyone; passengers miss connections, airlines lose
money as planes burn fuel on the ground, and the government air traffic control system
gets saturated (Abeyratne, 2016). As a result, airline companies began to embrace
point-to-point flight strategies to counterbalance growth. This was largely characterised
16
by the introduction of new low-cost carriers, the most notable of which was Southwest
Airlines (Graham, 2017).
2.7.3 Low-Cost Carriers According to Shaw (2016), low-cost carriers are airlines that are operated under the
emphasis of cost minimisation. Over the past decades, low-cost carriers have
dominated the airline industry. The concept of low-cost flights was developed by Pacific
Southwest and later implemented by the Southwest Airlines. Facilitated by the Airline
Deregulation Act of 1978, Southwest Airlines achieved rapid growth and increased its
operations from a small regional airline into an international airline serving 30 states.
The success of Southwest Airlines in the early 1980s triggered the adoption of the low-
cost carrier model by other airline companies in the industry (Shaw, 2016).
Low-cost carriers operate on a point-to-point basis. This is because the network is
created from one or a few airports known as the “bases” from which the carrier operates
its routes to main destinations. All passengers in this network board at flight origin and
deplane at the destination (Cook & Goodwin, 2008). Low-cost carriers mainly operate
from secondary airports because the airport charges are lower, and the airports are less
congested. Also, low-cost carriers generally operate a single type of aircraft, the Boeing
737 or Airbus 320, which transport up to 186 passengers depending on configuration.
The airplanes are utilised at a higher rate than full-service carriers. Low-cost carriers are
also referred to as ‘no frills’ service since they provide no lounge services, charge for
seats and in-flight services such as entertainment, food, and beverages, and provide no
frequent flyer programs. Low-cost carriers operate via an electronic distribution system;
therefore, tickets are sold electronically and sent to customers via email (Kwoka,
Hearle, & Alepin, 2016).
2.7.4 Factors that Facilitated the Growth of Low-Cost Carriers Wongleedee (2017) argued that the Air transport industry is cyclical in nature such that
it generally flourishes during periods of economic boom and produces low revenues
during periods of economic recession. Flouris (2007) suggested that the emergence of
low-cost carries was influenced by the fact that the price of air transport often
represents a constraint factor for a large portion of the population.
17
Furthermore, Gillen and Gados (2008) pointed that the Deregulation Act of 1978 played
an important role in influencing the robust growth of airline carries. The authors
suggested that deregulations encouraged the development of new services which led to
the creation of new airlines.
Diaconu (2012) established in her research that the most important determinant of the
emergence of low-cost carriers was the deregulation of airlines. According to the
researcher, the Deregulation Act encouraged airlines to diversify the methods and the
strategies they used to maintain or improve their profitability (Lawton, 2017). Therefore,
the original low-cost business model was gradually adapted and changed thereby
generating several new versions. The deregulation created a favourable environment
for LCC to emerge and prosper (Lawton, 2017). Further, a survey conducted by Sarker,
Hossan, and Zaman, (2012) established that a cheap flight option was the main reason
that facilitated the growth and survival of low-cost carriers. The research also predicted
low-cost carriers were expected to grow rapidly in the next coming years (Graham &
Shaw, 2008). Low-cost carriers provide ancillary services which generate a large portion
of their revenue. These include luggage charges, inflight food and beverages, and
advertising space.
2.7.5 Impacts of Deregulation and Privatization on Hub CarriersThe sub-section discusses the impacts of deregulation on hub carriers in three phases,
the expansion phase, the consolidation and concentration phase, and lastly, during the
international phase.
2.7.5.1 The Expansion Phase This period was just right after the deregulation act was passed. The period
experienced an increase in the number of airline companies. These new airlines needed
ramp space, counter space, and gate space to operate at key terminals (Borenstein,
2017). Furthermore, existing airlines were beginning to experience the benefits of route
freedom under deregulation and were making efforts to add as many routes as possible
to their systems (Borenstein, 2017). As a result, many major airlines began to
individually adopt a hub-and-spoke strategy in to maximise on space. This strategy was
adopted both as a competitive strategy and a market response to competition and an
18
economic response to the deregulation (Dobruszkes & Wang, 2019). Another impact
during the expansion period and the resulting use of hub-and-spoke strategies by larger
airlines was the increasing need to focus on regional and commuter airline services to
feed hubs. By mid 1980s, 29 of the top 30 regional airlines signed an ownership
agreement with an airline operating hub-and-spoke. If an airport was not served by an
airline with such an agreement, the airport was at risk of losing airline services
(Dobruszkes & Wang, 2019).
2.7.5.2 The Consolidation and Concentration PhaseThe two phases are combined due to their sequential nature (Lawton, 2017). Airline
concentration in the market place is a direct result of the consolidation or merger of
airlines. In addition, the phases occurred over a short period of time. Airlines
concentrating their services after a merge had both negative and positive impacts on
the growth and development of hubs (Williams, 2017). For instance, Eastern Airlines
decided to stop its Kansas City hub operation in September 1988 as a result of a
decision by the parent company to put more attention to its Denver hubs which led to
the reduction of Eastern overall. Another hub operator, Braniff began operations in
Kansas City in late 1988; however, Braniff declared bankruptcy and terminated all
operations early in 1989 (Borenstein, 2017). On the positive side, consolidation and
concentration led to addition of new hubs such as the San Jose, California, after it
merged with Air California (Albers, Baum, Auerbach, & Delfmann, 2017).
2.7.5.3 International PhaseThis phase includes the international expansion of airline companies. The phase led to
the development of strong single hub-and-spoke operations in the airline industry. In
addition, it triggered the development of twin-engine wide body aircrafts such as the
Airbus A300 and the Boeing 767 which are able to connect the hubs more economically
to long-range international destinations (Albers et al., 2017).
2.7.6 Impacts of Low-Cost Carriers on Airport Hubs One of the major consequences of deregulation in the airline industry was the
discontinuation of direct flights to smaller markets. This led to the development of the
hub-spoke systems. As a result, smaller markets began to be served by small carrier
19
low capacity commuter flights connecting to major hubs (Lin & Zhang, 2016). The major
carriers’ plan was to use these possibly unprofitable flights from the “spokes” to bring
passengers to profitable connecting flights. However, the hub-and-spoke system did not
prove to be an effective entry barrier (Lin & Zhang, 2016). Low-cost carriers were able
to achieve economies of scale by “skimming the cream” from denser routes using fewer
aircraft models and offering fewer amenities to passengers. As long as the low-cost
carriers had a relatively small market share, they were not a threat to the hub-and-
spoke system maintained by the majors (Button, 2017). Nevertheless, the hub-and-
spoke system’s higher costs became increasingly difficult to support as the market
share enjoyed by the low-cost carriers rose. A study conducted by Chen (2017) that
investigated the general entry effects of low-cost carriers concluded that the presence of
low-cost carrier competition in the market has reduced air fares by as much as 20%.
2.7.8 Low-Cost Carriers in Long-Haul Airline OperationsLow-cost long-haul business is more likely to happen for pure leisure markets because
it does not demand high frequency. Also, dense point-to-point markets with a modest
market share to operate one flight per day (Humphreys, Graham, Dennis, & Ison, 2007).
New airlines are beginning to embrace the new low-cost long-haul strategies (Graham,
2017). The main problem for a long-haul low-cost model is that as distance increases,
operating costs rise and unit costs decrease. To be successful, a long-haul low-cost
airline must find advantages in these factors and find markets where lower fares can be
profitable. Some characteristics of these models are strong local catchment areas,
affluent leisure and VIP traffic, seasonal and economic balance, the availability of peak-
time slots, and seven to twelve-hour length (Wensveen, 2007). Opportunities could exist
in developing long-haul in conjunction with solid short-haul network (Hind, 2007). Long-
haul low-cost carriers should concentrate on niche markets with the possibility of
connecting with other markets (Wenseveen, 2007).
2.7.9 Comparative Review of Connectivity in the Middle East and EuropeOverall, Europe remains the largest market for commercial passenger aviation from the
Middle East. The emerging carriers have been successful in replacing legacy carriers
from both the Middle East and Europe as the largest airlines by flights and capacity (Al-
20
Sayeh, 2014). The carriers continue to grow and expand their networks within Europe
year after year. Concurrently, low-cost carriers from the Middle East have begun
competing with their European counterparts in markets that the emerging carriers are
present in as well as many they are not. Emerging carriers now account for 41% of
flights between the two regions (Aydin & Morefield, 2010). As European legacy carriers
continue to struggle with high costs, it appears that they will not be able to effectively
compete with the emerging carriers. This is especially true when considering that aside
from British Airways, none of the other major European carriers have a large connecting
hub in the Middle East (Aydin & Morefield, 2010). On the other hand, low-cost carriers
from both regions pose a minor risk to the emerging carriers. The emerging carriers are
reliant on connecting traffic between the East and the West as well as traffic to their hub
cities. According to Aydin and Morefield (2010), if European LCCs expand their
networks to reach the three hubs in the Arabian Gulf, it may affect the emerging carriers
in the Middle East.
21
Chapter 3: Methodology3.0 IntroductionThe chapter presents the methodology used to study the research topic. The chapter
details the research design adopted with an explanation of the selection of research
designs and the development of tools as well as the methods of data collection and
analysis. The chapter also provides a detailed review of the case study. Finally, the
chapter concludes with a summary of the entire chapter, provides an insight into the
ethical issues that are considered during the research and finally provides an overview
of the limitations experienced in the research.
3.1 Research DesignThe study was conducted using a case study design to provide an in-depth
understanding of the impact of low carriers on established hub carriers. Hancock and
Algozzine (2016) defined a case study as an empirical inquiry that investigates a
phenomenon within its real-life context. Case study research provides a logical and
systematic way of viewing events in the context of data collection, information analysis,
and reporting of the results. As a result, the researcher may gain a sharpened
understanding of why the instance happened as it did and what might become essential
to look at more extensively in future research (Yin, 2017).
3.2 Research ApproachAccording to Johnston (2017), a research approach is a blueprint that gives direction to
research systematically and efficiently. The study will adopt an inductive research
approach because it aims at generating meaning from a set of data collected to
determine relationships. The procedure involves the search for pattern from an
observation or a series of hypothesis. Burney (2008) defined inductive research
approach as the process through which specific concepts are explained in a more
general way. Researchers do not require a pre-determined theory to conduct the
research; this makes the approach more flexible. The research made use of the
inductive method to evaluate quantitative and observational information. However, the
main weakness of the inductive approach is that it produces generalized theories.
Furthermore, conclusions are based only on a small number of observations, thereby,
22
the reliability of research results remain in question (Eisenhardt, Graebner, &
Sonenshein, 2016). To address this challenge, the data will be obtained from several
case studies of some of the big players in the airline industry which will make the
recommendations provided more grounded. Finally, the study used academic business
models to explain competitive strategies adopted by full-size carriers and low-cost
carriers. Specifically, the miles and snow organizational strategy were used.
3.2.1 Miles and Snow StrategyMiles and Snow categorise business strategies into four groups, prospector, analyser,
reactor and defender. The prospector is considered innovative and aggressive in
venturing into new markets. The prospector is a risk taker. An analyser on the other
hand, is reserved, puts less emphasis on innovative ideas but values current consumer
satisfaction. The reactor has no clear formulated strategy; however, they react to
changes around them and drift with the events. Lastly the defender is considered
territorial in their current markets; they maintain stable growth and ensure that their
customers are satisfied.
3.3 Data Collection and ToolsThe study used the quantitative research method in data collection. This was done in
order to collect adequate data that would be used to address the research questions
and meet the research objectives stated in the first chapter (Griffiths, 2010).
3.3.1 Library ResearchWalliman (2017) defined library research as a process that deals with the analysis of
evidence such as historical records and documents. Other scholars describe it as a
process of gathering data from library materials such as books, published journals,
dissertations, reports, and theses. Information gathered from the Internet is also
included in the library research. Data collected from library research is categorized as
secondary data; this means that it is readily available to be used by anyone else other
than the researchers. This data is not the original work of the researcher.
The study mainly relied on secondary sources of data. According to Tripathy, (2013),
secondary data is collected by someone else for their research purposes. Secondary
data provide basic research principles. Secondary information is mainly used by
23
researchers who do not have sufficient time to go to the field and collect primary data
(Harrell & Bradley, 2009). The data used in the current research was collected from the
statistical reports of the Official Airline Guide (OAG) database. A three year time period
between the year of 2016 and 2019 was utilised.
The OAG database consists of a weekly schedule of all direct flights operated by all
international and domestic carriers since 1996 up to date (Christensen, 2016). Each
observation in this database represents a particular flight by a carrier in a quarter and
includes information on the identity of the carrier, the origin and destination airports, the
arrival, departure and flying times, the days of the week on which the flight operates,
whether the flight is a codeshare flight and, for codeshare flights, the identities of the
operating and code sharing carriers (Christensen, 2016). The OAG data is used to
determine the exact routes that are served by each carrier in each quarter and to
identify the quarter in which carriers enter particular routes. These data are also used to
construct several of our explanatory variables (Martini, Manello, & Scotti, 2013).
The use of secondary data presents various advantages. Secondary data helps a
researcher save on time, especially with this era of technology where all information can
be found with a click. Second, using secondary data is time-saving (Ghauri &
Grønhaug, 2005). Generally, it is less expensive as compared to primary data where
one has to be out in the field. Lastly, secondary data ensures the feasibility of both
longitudinal and international comparative studies (Ghauri & Grønhaug, 2005).
However, it also has disadvantages. Secondary data collected may sometimes
inappropriate for the study being collected; this is because the data had been previously
used to answer a different question. Also, the lack of control for the data may
sometimes lead to incorrect results (Cheng, & Phillips, 2014). However, in order to deal
with these challenges, the research retrieved online published data from the Official
Airline Guide website. The data is recognised is widely acceptable in the aviation
industry and considered efficient in research work. Furthermore, the data published on
the site is regulated and controlled by the organisation; therefore it is controlled and
considered appropriate for use.
24
3.3.2 Case StudyThe research made use of a case study methodology. A case study research allows the
exploration and understanding of complex issues (Yazan, 2015). The design is
considered holistic and robust when detailed analysis is required. Case study approach
has been utilised by many scholars in various fields of research; this is because the
method allows a researcher to go beyond quantitative statistical results and enables
them to understand the behavioural patterns being investigated (Yazan, 2015). The
approach further helps to explain the process and the outgrowth of a phenomenon
through critical observation, reconstruction and analysis of studies under review.
Zainal (2007) defines a case study as a method that allows a researcher to critically
examine data within a specified context. In another study by Cronin, (2014), a case
study is explicated as an empirical exploration that probes a contemporary phenomenon
within its real-life context. A case study design can assume any of the three categories,
exploratory descriptive or explanatory. The exploratory category is focused on
exploration of a phenomenon in the data. The descriptive case is set to analyse the
natural events that occur within the data at hand. Lastly, the explanatory case is aimed
at providing an in-depth study of the data, in order to expose trends in the data. This
case study will be descriptive in nature.
Under the case study design, researchers are also able to choose between single case
studies or multiple case studies depending on the issue being addressed. The single
case study is applied in cases where there are no other available cases for replication
(Cronin, 2014). For example, the effects of the 9/11 crisis can be analysed using the
single-case study, where occurrences are limited to one event. However, the single
case study does not provide a generalizing conclusion, especially when the events are
infrequent. Multiple case studies, on the other hand, are adopted with real-life events
that are of regular occurrences, with numerous reference points. Multiple case studies
elevate and support the results of previous findings (Yin, 2017).
The paper provides four case studies in order to provide a detailed overview of the topic
at hand. The first case study is on the impacts of the growth of AirAsia on Malaysia
Airlines. It discusses in detail the challenges that Malaysia Airlines has suffered over the
years. The paper also presents a case study of Cathay Pacific and focus specifically on
25
the profitability purchase of HK express. The third case study that is discussed in the
paper is on SAS Airlines and the growth of Norwegian Airlines. Finally, the paper will
provide a detailed insight into competitive strategies adopted by Iberia Airlines to
compete against low-cost carriers such as Ryanair and easyJet among others.
3.3.2.1 Advantages of Case StudiesThe case study design has several advantages as discussed by Duff, (2018). The first
advantage is that the research method can incorporate both the quantitative and
qualitative analysis of data. For example, in a multiple case study, the research can
draw evidence from both categorical and numerical responses from individuals.
However, the case study design can also entirely be founded on quantitative evidence
(Duff, 2018). Second, detailed qualitative evidence reported under case study design,
not only explore and describe the data in real life but also helps to explain the relativity
and complexity of a situation which may not be captured in a survey (Hyett, Kenny, &
Dickson, 2014).
The case study approach not only provides access to numerical details concerning
strategies adopted but also provides detailed analysis for the reasons for the use of the
strategy in relation to other strategies. Each finding in the case study cannot be
analysed in isolation but in relation to other strategies (Hyett, Kenny, & Dickson, 2014).
3.3.2.2 Disadvantages of case studies. Despite the advantages discussed above, case studies have received criticisms from
various scholars, Starman, (2013), suggests that case studies use a small number of
subjects, as a result, they end up providing little basis for generalization. Yin, (2017)
termed the case study approach as microscopic due to the limited sample size.
However, in our case the study, we will analyse four main players in the Airline Industry,
the results from the case studies will, therefore, be efficient to come up with meaningful
conclusions and recommendations for other airline companies all over the world. The
case study approach has also been criticized for the tendency for a researcher to be
biased in their interpretation of data (Unluer, (2012). Despite the critics discussed
above, the method has been widely used by other scholars especially when studying
26
real-life situations surrounding social and economic issues. Case studies from various
domains have been comprehensively reported and published in the literature.
3.4 Ethical IssuesThe purpose of any research is to disseminate knowledge that is truthful and
counteracting errors. In order to meet all the requirements mentioned, the researcher
selected appropriate methodologies and relevant data collection methods that were
employed in the study. Christensen, et al. (2011) suggests that when ethical
considerations are not observed in a study, it could result to research misconduct. And it
is within this framework that the study addresses ethical issues that were considered
during the study period emphasising on the issues related to the research itself and the
research process.
Ethical issues that are considered during this research revolve around secondary data
usage. The data used in the research is from the OAG database which is freely
accessible to anyone from the internet. The research acknowledges the ownership of
the data to the Official Airline Guide in the United Kingdom. The data obtained from the
database was adequate and relevant enough to facilitate the research. In addition, the
data collected was for a period of three years between 2016 and 2019, data was
collected with the intention of analysing the impacts of the influx of low-cost carriers on
established hub airline carriers. Data collected was not used for any other purpose that
would result in damage or distress, data was specifically used for the reasons stated
above. The researcher also acknowledges the fact that insights that will be provided
from the case studies are correct and can be used by other scholars are reference
points in their own research.
3.5 Limitations of the Research MethodologyDue to limited time and resources, the sample size of the case studies conducted was
not as exhaustive as desired; it was confined to four case studies. A greater number of
case studies would have covered more airlines and therefore providing more efficient
results, thus, increasing the possibility of generalizing the research. Moreover, the
methods of data collection and analysis discussed above have various weaknesses
some of which the research found solutions to, while others still remain. Finally, the
27
research relied heavily on quantitative methods of data collection, therefore making the
research a bit restrictive.
3.6 External ValidityChristensen et al. (2011) describes validity in research as a criterion for determining
how effective a research design is in applying methods of measurement that will capture
the data to answer the research questions raised in the research questions. External
validity refers to the extent to which the study can reflect similar outcomes elsewhere
and can also be generalized to other situations. Validity in this study is assured by the
used of quality data that will be retrieved from the OAG database. Furthermore, the
provision of multiple case studies ensures that the findings of the research are not
biased and are reliable; also they can be used a reference point by other scholars and
aviation companies all over the globe.
3.7 ConclusionThe chapter restated the problem statement described in the research design and
research approach that was utilised. The chapter also provided a detailed overview of
the tools of data analysis that are used in the paper, discusses their advantages and
disadvantages. It also provides the sources of secondary data that are used in the
study. Last but not least, the chapter provides a detailed highlight of the case study
research methodology that was utilised in the paper. It provides the benefits of using the
study methodology and also discusses in detail the limitations of the method.
Furthermore, the chapter provides some of the measures that the whole paper adopts in
order to deal with the limitations involved in employing a case study methodology.
Finally, the chapter comes to an end with a brief overview of the case studies that were
considered in the paper. The case studies mentioned above will be discussed further in
detail under chapter four, the results chapter.
28
Chapter 4: Analysis and Results of the Study4.1 IntroductionThis chapter will be focused on presenting an analysis of the multiple case studies
highlighted in chapter three. We shall compare how the growth of various low-cost
carriers has impacted on the development of established full-service carriers. Mainly,
this chapter will provide answers to research questions and meet the objectives
presented in chapter one. The study adopted a case study research design; this
enabled the research to be systematic and logical. In addition, an inductive research
approach was utilized in order to analyse quantitative observational information. The
chapter also provides a detailed discussion of how various airlines in the case study are
applying the miles and snow strategy to remain competitive. For the purpose of data
collection for the case studies, the study used quantitative secondary data retrieved
from annual reports of the OAG database. The chapter presents a detailed discussion
of the findings of the case studies. Data will be presented in the form of charts, graphs,
tables and pie charts in order to enhance understanding.
4.2 Case Study 1: Malaysia Airlines and the Growth of AirAsiaMalaysia Airlines is one of Asia’s oldest carriers and, like its rivals Singapore Airlines
and Cathay Pacific; it is battling stiff competition from a new generation of low-cost
carriers in the region such as AirAsia. The worldwide Low-Cost Carrier penetration rate
has grown from 8% in 2001 to 26.3% in 2013(Oliveira, 2017). Within Asia-Pacific, it has
increased from 1.1% to 24.5% in this time period (Oliveira, 2017). South and Southeast
Asia are at the forefront of LCC development within Asia, with around double the
worldwide rate. As a result, the previous profits of the full-service carriers such as
Malaysian Airlines have diminished significantly over the years. Market shocks have
placed extreme pressure on network carriers and favoured the entry of low-cost carriers
(Oliveira, 2017).
29
Figure 1- Expenditure vs Revenue for the Period between 2009 and 2013. Source: UOB-NUS
30
Figure 2- Malaysia Airlines Financial Report for 2013 and 2014. Source: Malaysia Airlines 3Q2014 results announcement
Following two accidents in 2014, the airline sold its B777-200ER fleet at a throwaway
price, mainly because of the negative image the aircrafts had bestowed to the public
eye. Furthermore, the aircraft was considered bad luck to the airline and disposal was
the most appropriate measure. Despite the fact that the two tragedies worsened the
airline's financial situation, the airline has always struggled to keep up with competition
from the influx growth of low-cost carriers. The airline had not been profitable since
2001 due to stiff competition from LCCs. The long-term losses together with the two
major disasters in 2014 forced the airline company out of the Kuala Lumpur stock
exchange and influenced its privatization (Nasir, Ahmed & Barkat, 2017).
4.2.1 Growth and penetration of low-cost carriers in Asia (Air Asia)Despite carrying almost one-third of Malaysian passengers, Malaysia Airlines
encountered losses of $522 million in 2013; this was mainly a result of competition from
31
low-cost carriers such as AirAsia. The capacity of low-cost carriers in Asia has
quadrupled over the past decade.
Figure 3- Low-Cost Growth vs Full-Service Growth in Asia. Source: Centre for aviation and OAG
AirAsia began operations in 2002. The airline adopted a prospective strategy in order to
compete efficiently with established hub carriers such as the Malaysia Airlines. The
airline launched new carriers and ventured into international markets. Without the
structural costs of its legacy rival, Malaysia Airlines, AirAsia offered promotional
discounts on fares to as low as RM 1 (the US $ 0.27) and conducted rigorous
advertisements domestically. AirAsia soon found a way to penetrate the Malaysian
market and by 2006, it was in control of 50% of the domestic air market (Hanaoka,
2018). Later on, the airline spread its wings internationally by launching AirAsia branded
carriers in Indonesia and Thailand from there; they were able to operate intra-Asian
routes such as Singapore, Philippines, Vietnam and Cambodia (Wang, & Wong, 2019).
In order to accommodate the rapid growth of the airline, the airport authorities
developed a low-cost terminal with a throughput of 10 million passengers, charging 40%
fewer fees as compared to its competitors (De Wit & Zuidberg, 2012). According to a
graphical representation by the Centre of Aviation (2018) the annual number seat
capacity for low-cost carriers has been increasing over the years:
32
Figure 4- Asia Pacific LCC annual seat capacity (red within and blue to/from): 2008 to 2018. Source: Centre for Aviation and OAG.
4.2.2 Airline Market Share on Domestic RoutesMalaysia Airlines continues to face stiff competition as low-cost carriers take over the
domestic markets. In 2018 AirAsia, was the largest low-cost carrier by passenger
volume with 50% share mark domestically as rivals, Malaysia Airlines cut back on
domestic capacity (Wang, & Wong, 2019). In 2016, the domestic market for Malaysia
Airlines declined from 25% to 22% in 2017 (Herdman, 2016); this included its point-to-
point carrier, FireFly, subsidiary market share. On the other hand, Lion Group’s Malindo
Air increased its domestic market share by 2% during the same period as shown in the
figure below.
Figure 5- Malaysia Aviation. Source: IATA, Crucial perspective
33
Airline/Airlines
2012
2013
2014
2015
2016
2017
2018
AirAsia/AirAsia
X
4
4
%
4
2
%
4
2
%
4
4
%
4
6
%
4
7
%
5
0
%
Malaysia
Airline
s/Firefly/MASwi
ngs
3
3
%
3
5
%
3
3
%
2
9
%
2
5
%
2
2
%
2
1
%
Malindo0
%
2
%
4
%
6
%
8
%
1
0
%
9
%
Figure 6- Increase domestic market share. Source: CAPA – Centre for Aviation & OAG.
4.2.2.1 Reduced Airline NetworksTo compete efficiently with the influx of low-cost carriers, Malaysia Airlines adopted the
reactor strategy. Under this strategy the airline made amendments to its structural
design with respect to competitive strategies posed by low cost carries. Some of the
changes made included route and fleet reductions. First, the Malaysian flag carrier
reduced the number of routes it served. The airline company reduced flight frequencies
in 13 route destinations (Pearson, O'Connell, Pitfield, & Ryley, 2015). The most
significant cut was Frankfurt. Frankfurt Airport is one of the major hubs internationally
serving over 100 airlines all over the globe. Almost all major metropolitan centres across
Europe, Asia, North America and South America are served directly from Frankfurt.
The decision of reducing long-haul capacity for years, was made as Malaysia Airlines
faced stiff competition in the German market, after Lufthansa launched flights on the
Frankfurt-Kuala Lumpur route. The move made it harder for Malaysia Airlines to make
profits in the Frankfurt market. Furthermore, the airline also suspended flights Kunming
34
in China on 30th April 2015, to Krabi in Thailand on 6th May 2015 and to Kochi in India on
1st Jun 2015 (Stephenson, Lohmann & Spasojevic, 2018). The three destinations are
now currently being served by AirAsia. Cape Town, Johannesburg and Rome were also
axed in early 2012. The suspension of flight services leaves Malaysia Airlines with only
six destinations outside Asia Pacific Jeddah, Istanbul, Amsterdam, Paris and London
(Elliot, 2015).
4.2.2.2 Fleet Streamlining Following the reduction in route coverage, Malaysia Airlines also downsized in its fleet
size in order to cut on costs by reducing operations. This was part of the restructuring
strategy adopted by the company in 2015. The airline wanted to rebuild itself into a
smaller but more efficient maintenance organization. According to the Flightglobal
database, the airline has dramatically reduced its fleet between 2014 and 2018.
Figure 7- Malaysia Airlines Fleet Summary. Source: Flightglobal.
4.2.3 AirAsia Interlining with AirAsia XDempsey, (2018) defines interlining or interlines booking, as a commercial agreement
between individual airline companies to handle passengers who require multiple flights
between airlines in order to get to their destinations. Today, most of AirAsia X’s route
connections interline with the short-haul AirAsia as per the graphical evidence in figure
3. Kuala Lumpur International Airport (KLIA) effectively designed and constructed a
35
hybrid terminal (KLIA); this facilitates a cost-efficient transfer process of passengers that
works well with low-cost carriers (Fageda, Suau-Sanchez, & Mason, 2015). The
arrangement creates a whole new dimension to the low-cost model, one that needs
further insights as each airline develops complementary cross-border relationships with
other airlines (Materna & Tomova, 2016). Almost half of AirAsia X’s passengers who go
through Kuala Lumpur are hub transfer traffic and the percentage is growing steadily.
However, many full-service hub operators cannot handle that level of connectivity
(Chang, 2010). When the KLIA was officiated in 2014, it catered for transfer of
domestic-to-domestic, international-to-domestic, domestic-to-international and
international to international, these transfer services could be applied to both inter and
intra-airline services. The airport serves as a hub for low-cost carriers (Bardai, Er,
Johari, & Noor, 2017). Through working together, AirAsia group and Kuala Lumpur
International Airport are creating mutual benefits.
36
Figure 8- AirAsia X Statistics. Source: CAPA – Centre for Aviation & OAG
37
4.3 Case Study 2: Cathay Pacific and the Purchase of HK Express
4.3.1 Growth and Transformation of Cathay PacificAs one of the oldest airlines in Asia, Cathay Pacific has employed the analyser strategy
for its survival. This strategy has allowed the carrier to adapt to changing market
conditions and acquire various airlines to expand its market reach. For the past decade,
Cathay Pacific has experienced tough financial periods following the influx of low-cost
airline carriers, which intensified competition thereby threatening its existence and
fluctuating oil prices. However, the carrier took a transformation turn in 2017 to compete
effectively with low-cost carriers and improve its financial performance. The company
initiated a four-pillar strategy. The strategy was focused on customer satisfaction, which
was intended to put passenger’s needs first, operational excellence which ensured
maximum utilization of the airline’s resources. The third strategy was aimed at
improving productivity and value management and the last strategy centred on high-
team performance (Du, 2017).
In the second half of its transformation process, the airline aimed at changing how they
work, through the incorporation of technological advancements such as big data and
introduction of new aircraft such as the A350 series (King, 2017). It is also upgrading its
business class experience in order to make customers more comfortable. The airline
will overhaul its in-flight entertainment to offer an expansive range of entertainment
options and introduce better sleeping pods for its business class passengers; the airline
further increased the meal menu to incorporate a variety of food for it (King, 2017).
Likewise, they re-introduced meals on some flights like HKG-TPE, where passengers
are served a hot meal instead of pastries. The airline also went a step ahead to
introduce an on-board menu consisting of Hong Kong dishes. It was intended to make
passengers feel as though they were home away from home and this would, in turn,
create customer loyalty.
In order to expand their network coverage, Cathay Pacific and its subsidiary airline
Cathay Dragon, launched new routes to 10 new destinations in 2017, these included,
Dublin, Washington DC, Davao City, Cape Town, Jinan, Brussels, Copenhagen and
Tokushima (Bright, 2019). The airline has also invested in a new fleet of aircraft having
38
received its first eight Airbus A350-900 in 2018 and aims at acquiring a total of 28 A350-
900 and 20 A350-1000 by the end of 2021(Bright, 2019).
4.3.1.1 Acquisition of HK ExpressFor a while, Hong Kong (HK) Express, the only low-cost carrier in Hong Kong, had been
a major competitor of Cathay Pacific, both short-haul and long-haul. However, on 27 th
March 2019, Cathay Pacific entered into a share purchase agreement for the acquisition
of 100% of Hong Kong Express for USD628.1 million (HKD4.93 billion), with USD286.7
million paid in cash and a non-cash component of USD314.4 million (Gilroy, 2019). The
transaction was completed on July 19, 2019, whereby, Hong King Express is now a full
subsidiary of Cathay Pacific Group. Since the business models are complementary, the
transaction will be beneficial for both airlines. However, Hong Kong Express will be
operated as a single airline under the low-cost model (Wong, 2018). The acquisition will
provide Cathay airlines with an upper hand as it competes with other low-cost carriers.
According to a report from the OAG and CAPA database (25 th March 2019), the Cathay
group accounted for a 46% share of seat capacity in Hong Kong. This is inclusive of a
16% share for Cathay Dragon, the regional’s full-service airline and also a 31% share of
Cathay Pacific.
39
Figure 9- Hong Kong seat capacity share (% of seats) by airline: week commencing 25-Mar-2019. Source: CAPA – Centre for Aviation & OAG
The purchase of HK Express will increase Cathay’s capacity share in Hong Kong to
51%, this is legally acceptable, thereby boosting competitiveness. The acquisition of
Hong Kong Express is just one element of its preparation to take advantage of growth
opportunities supported by the opening of the third runway at its Hong Kong base. In
addition, it will provide Cathay Pacific with a solid foundation to expand into the low-cost
segment especially after opening up of the new runway in 2023 (Chen, 2019). The
investment will further strengthen the development and competitiveness of its Hong
Kong base as a cardinal aviation hub. Hong Kong Express encapsulates a unique
market segment that Cathay Pacific has faced competition from; as a result, the
accretion will increase connection opportunities through Hong Kong. This will bring
numerous benefits to passengers, with increased convenience and a wide variety of
flights to choose from for their travel experience (Chen, 2019). As shown in the pie chart
below, Japan accounts for 58% of HK Express low-cost capacity, for this reason, the
acquisition will enhance Cathay’s presence in Japan.
40
Figure 10- HK Express capacity share by country: week beginning 25th March 2019. Source: CAPA – Centre for Aviation & OAG
Previously, Cathay was shy from pursuing the low-cost strategy adopted by a majority
of its peers. Although, increasing pressure from growing budget brands like Jetstar and
AirAsia prompted it to stay competitive by embarking on a transformation program. The
efforts included generation of additional revenue, arrogating cost management
strategies and the recent addition of a low-cost carrier to its portfolio (Whyte &
Lohmann, 2016).
4.3.1.2 Cathay Airlines Fleet GrowthThe airline has been focused on growing its fleet size by 50% in time with the opening
of the third runway. The addition of HK Express is also a major component of its fleet
expansion plan. According to CAPA fleet database (2019), the airline currently operates
184 passenger aircraft and has 69 aircraft on order that are meant to be growth and a
replacement before the third runway is complete. The data presented below does not
include fleet that will be acquired from the purchase of HK Express.
41
AircraftIn service
On order
Airbus A32
0-20015 0
Airbus A321
-2008 0
Airbus A321
-200neo0 32
Airbus A33
0-30020 0
Airbus A33
0-300E23 0
Airbus A33
0-300X15 0
Airbus A35
0-1000XWB10 10
Airbus A35
0-900XWB22 6
Boeing 777-
2004 0
Boeing 777-
30015 0
Boeing 777-
300ER52 0
Boeing 777-
9X0 21
Total: 184 69
42
Figure 11- Cathay Pacific Fleet Summary: as of March 25th 2019. Source: CAPA Fleet Database.
4.3.2 Competition from High-Speed Trains Other than the rapid growth of low-cost airlines, Cathay dragon is experiencing new
competition from Chinese Bullet trains. Cathay dragon serves most of the group’s
mainland routes as well as Japan and South East Asia. The longest high-speed railway
in the globe stretches from Beijing to downtown Hong Kong; this has facilitated direct
connectivity to 44 mainland destinations. Using the train has become more convenient
for passengers as they are able to alight in the city centre rather than an airport on an
island and then taking another train to the city (Ma, Wang, Yang, Zhang, & Zhang,
2019). The cost of using the bullet train is also much cheaper as compared to flights
especially for routes shorter than 800 kilometres. A bullet train ride can cost less than
half of the ticket price on Cathay to 11 destinations.
Passengers are also able to save time on pre-boarding security checks required at
airports. Furthermore, the train’s wider seats and increased legroom translates to better
comfort for travellers. Although airlines have an advantage of customer loyalty, that may
fail to be a big enough incentive to retain customers (“Bullet Trains Are Coming for
Hong Kong's Airlines,” 2018). The Cathay group has lost customers and is under
pressure from mainland carriers that are offering cheaper air travel tickets (Ma et al.,
2019).
Many airlines have shifted their focus to longer domestic routes where flying has a clear
advantage of time rather than competing with bullet trains. Cathay Dragon may have to
come up with new measures to modify its network in order to realize profits and
accelerate competition after two straight annual losses. With the operation of Bullet
trains, it is uncertain whether the purchase of HK Express by the Cathay Group will lead
to profitability to the airline company or the airline will fall deeper into a financial
recession.
4.4 Case Study 3: SAS Airline and the Growth of Norwegian AirIn terms of seat capacity, SAS is the biggest airline in Scandinavia followed by Finnair.
However, Norwegian Air has overtaken SAS by total passenger numbers. For years, the
company had fallen under the defender category. The Airline was satisfied with its
43
performance since it had already established a solid foundation for market base.
However, this changed as a result of the stiff competition from low-cost carriers and
increased operational costs.
Jon Carlzon, who held the CEO position for 12 consecutive years, introduced the
businessman’s airline strategy to SAS Airlines. The strategy focused on businessmen
characterized by a willingness to pay higher prices, therefore increasing profits per flight
seat (Lee & Worthington, 2014). Carlzon focused on employee and customer
satisfaction, which translated to increased operational costs. But since SAS was a
monopoly back in the 1990s, they were able to set prices to their own liking (Ussing,
2013). This laid ground for the SAS the market has known for years, pervaded by high
service levels and a continuing struggle with high fixed costs. The rapid increase in low-
cost carriers prompted the airline to adopt strategies that would help it compete
effectively with low-cost carriers.
In 2002, the airline initiated the “Turnaround 2005” that was aimed at increasing
profitability and enhancing competitiveness. In 2006 SAS launched a second initiative,
“Strategy 2011”. The strategy was focused on ensuring passenger growth of 20% by
2011. Nevertheless, as a result of the changing market conditions, the strategy proved
inadequate (Barros & Couto, 2013). Therefore, the airline launched yet another
strategy, “Core SAS”, in 2009. Under this strategy companies that are outside the
Nordic home market were outsourced and not considered as part of SAS’s core
business. Core SAS was successfully implemented in 2011 with a total reduction in
costs of SE7.6 billion. In the same year, the airline launched the “4Excellence Strategy”.
The strategy was meant to address four factors, commercial, sales, people and
operational. These were the main areas that SAS wanted to excel in (Kjærsgaard,
2015).
The “4Excellence New Generation strategy” (4XNG) was launched in 2012. The
strategy is focused on making the airline less complex, more flexible, exchanging fixed
costs for variable costs and securing the airline’s financial profitability in the long-term.
The strategy is conditional on parliamentary agreements and union agreements. The
strategy includes centralization of administration, outsourcing of call centres and ground
handling, new pension terms, cutting down employee salaries and disinvestments in
44
Widerøe, Airport-related real estate, Ground handling and aircraft engines. The strategy
was aimed at making the airline less dependent on lenders in the future and easing the
financial burden (Kjærsgaard, 2015). In an effort to save the airline, the company sold
out most of its shares to private investors. Currently, the governments of Denmark and
Sweden claim 14.3% and 21.4% of the shares respectively. The remaining 64.3% is
owned by private investors (Jansson, 2018).
4.4.1 Political Limitations The airline was owned by the Swedish and Danish states, with each state claiming 50%
of the shares. This stirred up a lot of controversies especially after the deregulation of
the industry, but specifically, after the financial recession in SAS took off. Being owned
by the state has had unfortunate limitations to the SAS group. Politicians had key
interests in keeping the airline and as a result, retained unprofitable units particularly
during the recession period (Rajwani & Paroutis, 2013).
The importance of modern infrastructure is also another area of conflict. Particularly in
Sweden where the airline industry is very crucial since other means of transport might
not be an alternative. As a result, politicians may have an interest in keeping non-
profitable routes open for their own benefits. Keeping these routes alive creates
overcapacity which in turn leads to downward pressure on profits, not only for the airline
but also for the whole aviation industry (Rajwani & Paroutis, 2013).
Other factors that influenced the performance of the industry were taxes and duties
charged on the airline by both states. Enhedslisten, a Danish left-wing party
represented in the Parliament, proposed a DKK 75 air passenger duty, for every
passenger that takes off from a Danish airport (Kjærsgaard, 2015). This would
presumably affect the number of passengers, as the airline companies would be forced
to pass on the duty to the passengers in terms of higher ticket prices. The taxes would
end up increasing ticket prices thereby making the airline less competitive (Lawton,
Rajwani & Doh, 2013).
4.4.2 Norwegian Air ShuttleThe airline is known for adopting both the short-haul and long-haul, low-cost model in
2012. However, the airline began operations as short-haul before initiating its long-haul
45
subsidiary. A research conducted by Rintakoski, (2018), showed that the financial
performance of the Norwegian Airline was low as compared to its competitors for the
period between 2010 and 2018. Although the demand was high and led to profits, the
net profit was unstable due to high operational costs. In addition, liquidity and solvency
ratios proved that the airline had been heavily expanding its business through debts;
this resulted in low solvency and liquidity ratios. Only from 2010 to 2012 was the gross
profit margin steady, this was followed by years of high instabilities. The gross profit
margin fell into the negatives three years during the decade, one of which was in 2008,
one of the most difficult years for most airlines resulting from the worldwide recession
that triggered high fuel prices and lack of demand. The result of 2014 presented the
least profitable year for Norwegian with a gross profit margin of -0.072. The highest
gross profit margins were experienced in 2009, with a value of 0.078 (Rintakoski, 2018).
It can be difficult for low-cost carriers to attain sufficient cost advantage as compared to
full-service carriers on long routes of more than 12 hours, especially in an environment
where fuel prices are high. The Norwegian airline has been struggling to keep up with
other full-service carriers and this has led the airline to suspend some flights. In 2018,
the airline suspended services between London Gatwick and Singapore, which was
then the longest LCC route in the world (Maslen, 2012). The decision came a year after
the route began operations. The route suspension highlights challenges of long-haul
operations for low-cost carriers.
For its long-haul division and intra-Europe, the airline operates a hub-and-spoke
system. On the other hand, it bases on a point-to-point model for its transatlantic 737
MAX flights. Adopting the point-to-point model enables the airline to operate non-stop
flights between destinations and enhances flexibility in the route network. By adopting
this system the airline is able to handpick and operate profitable routes (Pallini, 2018).
4.5 Case Study 4: The Merger between Iberia and British AirwaysThrough a merge that was aimed at securing their market position, Iberia and British
Airways embraced the analyser strategy. Under this strategy, the newly formed airline
company was able to improve on service delivery and take advantage of market
dominance. In addition, the airline was now able to address consumer needs more
efficiently and take advantage of market gaps in the industry. A good example was
46
through the launch of Level airline brand and Iberia Express which will be discussed in
detail under this sub-section. The multi-billion deal was completed on 24 th Jan 2011.
The new company was split 55% to British Airways and 45% to Iberia with Madrid,
Spain acting as its administrative location (Dennis & Pitfield, 2018). The merger created
Europe’s third-largest airline group after the Lufthansa Group and the world’s sixth-
biggest carrier by revenues after Delta, Air France-KLM, Lufthansa, United Continental
and AMR; with a fleet of 406 aircraft and 55 million passengers in 2010. The merger
created a combined network of 204 destinations (Moss, 2019).
The merger coincided with the global economic recession in the industry as well as the
rise of low-cost carriers in Europe. The merger brought about many benefits including,
economies of scale, improved efficiencies, greater investment and increased
international competition. The merge has enabled both airlines to expand their
opportunities and has helped reduce overcrowding at Heathrow and Gatwick airports.
The merge has also been beneficial to Iberia by improving their brand image, increasing
its network coverage and cost reduction. The advantages of this merger are mainly the
economies of scale. British Airways is the largest airline in the United Kingdom with its
main hub at Heathrow Airport, one of the world’s busiest airports and several other
airports such as Gatwick, Manchester and Newcastle. Therefore, it has relatively high
fixed costs; the merger reduced the average operational costs. As a group the two
airlines can buy necessary aircraft by bulk buying, which will reduce costs. There will be
a better rate for large companies in financial areas and also organizational problems will
be much easier to solve as a result of having one head office rather than two. Moreover,
the companies are in a better position to deal with the threat of multinational airlines and
compete on an international scale. Also, the merger attracts investors in the company
because the firm will generate more profits (Zhang, & Zhang, 2018).
4.5.1 Launch of Iberia Express In 2012 Iberia’s new subsidiary was given a go-ahead by IAG to begin operations,
replacing mainline Iberia on many of its domestic and regional routes. The new division
operates as part of Iberia’s medium and short-haul networks using a fleet of A320s from
the Madrid Barajas base. The flights are two-class configured, providing services to
47
point-to-point markets as well as transfer feed onto Iberia’s long –haul markets. The
airline network offers lower competitive air ticket prices (Dempsey, 2018).
Madrid was a significant choice for Iberia not only because it is the hub for many long-
haul flights but also because of competitive challenges. The launch transferred many
domestic and short-haul European routes to the low-cost subsidiary. Moreover, Madrid
is unique for having only one airport with no low-cost alternative. This means that low-
cost carriers operate from the same airport as legacy carriers, and seats become more
commoditized; there is no trade-off in location or centrality for a legacy carrier at a city's
main airport versus an LCC at a secondary airport some distance from the city. In fact, if
anything, LCCs have a slight advantage over Iberia as they operate from
terminals marginally closer to the Madrid city centre than Iberia at the new terminal four.
LCCs presently account for 24% of seat capacity at Madrid, whereas in cities with
multiple airports, the main hub airport has a smaller share of LCC traffic (Maertens,
2018).
In efforts to compete with low-cost carriers Iberia Express took over additional routes
from its parent in its 2012/13 winter operation. This move enabled the low-cost unit of
Iberia to take additional routes to Germany, Scandinavia and other domestic flights from
Mainline. The following routes were taken over:
Madrid – Berlin Tegel 3 daily IBERIA Mainline service transfers to IBERIA
Express
Madrid – Copenhagen 1 daily IBERIA Mainline service transfers to IBERIA
Express
Madrid – Dusseldorf 3 daily IBERIA Mainline service transfers to IBERIA
Express (2 Daily) and IBERIA Regional (1 Daily)
Madrid – Frankfurt 3 daily IBERIA Mainline service transfers to IBERIA Express
Madrid – Jerez de la Frontera 3 daily IBERIA Mainline service transferred to
IBERIA Express (2 Daily) and IBERIA Regional (1 Daily)
Madrid – Stockholm 1 daily IBERIA Mainline service transfers to IBERIA
Express
Source: Routes Online
48
4.5.2 LEVEL (Airline Brand) Level is an airline brand under which International Airlines Group operate as a low-cost,
long-haul carrier. Level was launched as a competitive response to Norwegian, which
has been giving IAG competition in most of their markets. It began operations from
Barcelona- El Prat Josep Airport. In June 2017, Level expanded with long haul services
from Paris by integrating IAG’s OpenSkies subsidiary. The airline brand was initiated in
response to heightened competition in the low-cost long-haul market including
Norwegian long haul (Jim, 2018).
4.5.2.1 Long-Haul ExpansionIn July 2018, level announced flights from Paris Orly Airport to Montreal and point-to-
point flights from Barcelona to Boston in order to further facilitate its long-haul
expansion. In September 2018, flights from Paris to Fort-de-France were also initiated.
Flights from Paris were operational under the air operators’ certificate of OpenSkies
(AOC) and the crews were also from that subsidiary. The operations of OpenSkies were
later absorbed into the Level brand. On 8 November 2018, flights from Barcelona
to Santiago de Chile and New York JFK were announced to begin in March and May
2019 respectively. On 8 May 2019, a service from Paris to Las Vegas was announced
to begin from 30 October 2019 (Jim, 2018).
4.5.2.2 Short-Haul ExpansionA new low-cost subsidiary was launched on 29 th June 2018, by IAG, Anisec Luftfahrt,
this operates under the LEVEL brand. The airline was aimed at offering a stylish
approach to flying at affordable rates. Passengers have access to in-flight entertainment
facilities with a wide range of entertainment options at their disposal. Economy class
travellers are able to purchase what they want from the menu.
The subsidiary operated flights from Vienna International Airport branded as LEVEL
from 17th July 2018, with four Airbus A321 aircraft previously used by Air Berlin.
However, by the end of 2018, LEVEL announced cuts to it’s the Vienna route, some
routes were reduced in frequency while others were cancelled altogether, as a result of
poor performance. In 219, level opened seven routes that are operated by Vueling
being transferred to their second base at Amsterdam Airport; these routes are all
49
operated under the LEVEL brand. As of July 2019, the combined Level branded fleet
consists of the following aircraft:
Aircraft In fleet OrdersPassengers Notes
W Y Total
Airbus A320-
2002 1 —
18180
Operated by Anisec Luftfahrt.
Transferred
from Vueling from March
2019.
Airbus A321-
2004 — —
21210 Operated by Anisec Luftfahrt.
Airbus A330-
200
4
1
2129
314 Operated by Iberia.
2
Operated by OpenSkies.
1 to be delivered in the third
quarter of 2019.
Total 12 2
Figure 12- Fleet Level. Source: IAG
4.5.3 Carrier within CarrierThis subsection provides a case study of Go Fly a carrier established by British Airways
in efforts to respond to competition from low cost carriers. The carrier began operations
in 1998. The new airline was run separately from British Airways as a full subsidiary and
was expected to compete in the European low-cost market that was dominated by
easyJet and Ryanair. The airline began operations without factoring in all aspects of the
low-cost model. It operated expensive aircrafts that consumed a lot of fuel and flew to
over-crowded airports (Pearson & Merkert, 2014). This led the airline to make losses
during its operation period; as a result, British Airways sold the airline in 2001 and by
2003, Go was absorbed by easyJet. British Airways sold the airline as it was not
50
compatible with their new strategy of flying fewer routes and focusing more on high
paying business traffic.
4.6 Chapter SummaryThe chapter provided clear discussions of various case studies on the impact of point-
to-point carriers on established full-service carriers. The chapter has looked at some of
the airlines that have suffered stiff competition from low-cost carriers, for example,
Malaysia Airlines, and has analysed the strategic measures that these companies have
taken and are still taking in order to remain competitive. The chapter has also discussed
preventive measures being taken by established full-size carriers in order to dominate
the airline industry, such as the merging of British Airways and Iberia to form a multi-
billion airline company that can withstand competition from low-cost carriers. The other
measure that was addressed was how both full-size carriers and low-cost carriers are
embracing the low-cost long-haul system in order to stay profitable. It has also provided
a detailed discussion on how-low cost carriers are trying to stay ahead of the
competition by incorporating the hub model in their operations through interlining. The
chapter has also made use of graphs, tables and pie charts to elaborate on the
concepts and provide a clear understanding of competition between the two models.
51
Chapter 5: Conclusion, Interpretation, and Discussion5.1 IntroductionThe chapter will conclude the research paper. The section will begin by providing a
detailed summary of the various case studies discussed in chapter three; this will serve
as a foundation for the chapter. After the review, a detailed discussion and interpretation
of the findings will be presented. It will also discuss the significance of this research to
various players in the aviation industry. Finally, the chapter will be concluded by
providing recommendations for further research to other scholars in the field.
5.2 Summary of the ResearchThe research adopted a multiple case study research design; this enhanced the
logicality of the findings (Gustafsson, 2017). The various case studies discussed in
chapter three were aimed at analysing the impacts of low-cost carriers on established
full-service carriers. The case studies examined the intensity of competition brought
about by low-cost airlines and how full-service carriers are struggling to keep up with
high costs of operation, such as the case study of Scandinavian Airline System. The
deposition also reflected on the growth of low-cost carriers in the airline market over the
years and their dominance on airline market shares. Furthermore, strategies that full-
service carrier have adopted to reduce operational costs were discussed in detail.
The case studies also discussed in detail strategies that full-service carriers are
adopting in order to compete effectively in the industry. The studies revealed that FSC
carriers are adopting new price strategies in order to compete with low cost carriers. In
addition, in order to have greater dominance in the market share, FSC carriers are
merging amongst one another and also buying out shares of low-cost carriers that
threaten their existence. FSC carriers have also began to incorporate some of features
of low-cost carriers in order to minimize operational costs therefore remaining profitable.
One of the features evident from the case studies was the introduction low-cost long-
haul subsidiaries. Under this strategy, full-service carriers offer long haul flights with less
comfort at affordable rates.
The case study also provided an overview of the impacts of modern-day airline
regulations and political factors have on carriers. It is also evident that full-service
52
carriers are beginning to adopt some functionalities of the low-cost model, for example,
the case of IAG that has expanded its short-haul and long-haul routes through the
Vueling and Level brands that were launched as a competitive response to Ryanair and
Norwegian Air.
5.3 Discussion and Interpretation of the FindingsThe research concluded that the success of low-cost carriers in Europe and the United
States encouraged the infiltration of this business model in Asia and other countries all
over the globe. The study also found out that the penetration rate of low-cost carriers
has been increasing over the years as they continue to dominate the airline industry
(Fu, Lei, Wang, & Yan, 2015). The model influenced reshaping in the airline industry.
Additionally, the cheap business model sparked economic growth in various countries
through promoting tourism while making it affordable for people to fly. At the same time,
the competition between low-cost carriers and full-service carriers in the aviation
industry intensified. Airfare prices mainly influenced this. Low-cost carriers were price-
oriented, therefore offered lower rates, whereas full-service carriers were service-
oriented, they provided value for money.
Some full-service carriers could not survive the competition and thus either went out of
business or were absorbed by other larger companies. Meanwhile, the survival of full-
service carriers to compete with low-cost airlines took different paths. This included
restructuring their operational and marketing strategies through cost reduction
processes such as reducing their staff numbers and selling off their assets.
Other airlines streamlined in size to have a smaller, better organized, and manageable
fleet size. Also, the airlines discontinued unprofitable routes. Collective agreements are
yet another strategy that has been adopted by full-service carriers; these agreements
enable them to be used as feeder traffic by subsidiaries. Moreover, in response to low-
cost carrier competition, other full-service carriers have launched low-cost carrier
subsidiaries that directly compete with other low-cost carriers while at the same time
maintaining high fares and quality service of their original carriers.
In the context of network expansion, the study reveals that, low-cost carriers are
beginning to operate longer-haul routes. However, some of them are struggling to
maintain their profit margin. This is because it is difficult for low-cost carriers to be
53
profitable in the long-haul market due to high fuel prices and fixed costs. Other low-cost
carriers have been able to incorporate the model successfully. The move has been
made possible by adopting the multi-hub strategy, launching subsidiaries, purchasing
shares in different airlines, and making joint agreements between themselves in sharing
maintenance and ground handling services.
Concerning the future of low-cost carriers in the aviation industry, the study observes
that the number of new entries from low-cost airlines is expected to increase all over the
globe. Unprofitable full-service airlines will be taken out of the race by low-cost carriers
due to high operational costs and losses. Additionally, it is expected that most airlines
will adopt the hybrid model in the long-run. This is because many full-service carriers
are embracing the mixed model all over the industry.
5.4 Significance of the FindingsThe study acknowledges growth and developments in the airline industry as a result of
low-cost carrier penetration. It also addresses the challenges faced by full-service
carriers as they try to keep up with market changes. The findings of the study add
modestly to the body of literature on the impacts of low-cost carriers. Furthermore, the
study will be beneficial to the entire airline industry, specifically new entrants who are
struggling to keep up with the competition. The findings will enable such airlines to
adopt effective competitive measures.
5.5 Recommendations of the ResearchBased on the findings of the case studies, the research recommended the following:
Airport authorities must expand infrastructure. There is a need to expand existing
airports and also establish new ones to accommodate the expansion of the industry and
further avoid a shortfall of capacity in the long run. These steps will benefit not only low-
cost carriers but also full-service carriers and the economy as well.
All airlines irrespective the network model it adopts should strengthen their position in
the airline market through maximizing the load factor and maintaining its identity. On the
other hand, in the context of competition between airlines, especially after the advent of
low-cost carriers, many airlines were absorbed, thus losing their identity. Although it is
expected that many airline companies will adopt the hybrid model in the future, this
trend will make airlines lose their status and competitive advantage. Full-service carriers
54
would be profitable in the short-run if they adopt the hybrid model. However, in the long
run, they would lose their reputation by getting rid of high-quality services in order to
lower their fares.
Similarly, low-cost carriers would lose their competitive advantage of offering low
airfares based on cost cuts in the long run. This is because they will not be able to
provide the same low fares when they incorporate the hybrid model into their network.
This, in turn, will make them lose their market share. Consequently, their market share
of price-sensitive travellers would turn to original full-service carriers. Low-cost carriers
are recommended to invest capital in maintaining and improving their fleet to ensure the
safety of passengers and erase the notion created by rivals that low-cost airlines are
unsafe due to low airfares.
The research also recommends that full-service carriers should focus on operating long-
haul routes and cut services on unprofitable short-haul routes. This will enable them to
maintain their market share of loyal customers and also maintain their quality of service.
However, in the instance where full-service carriers are interested in making a profit
from short-haul, the research recommends that they launch their low-cost carrier
subsidiaries or enter into a code-sharing agreement with another low-cost carrier. This
will enable both airlines to achieve a high load factor. The study further recommends
that various policy tools could be adopted to support hub operations at Europe’s
airports, should it be deemed convenient (Bilotkach & Fageda, 2013), including
investments, airport charges and allocation of slots.
5.6 Recommendations for Further ResearchOther than the influx of low-cost carriers in the aviation industry, there seems to be a
new competition in the Asian market. The introduction of the bullet trains that serve
most mainland routes, among them Japan and South East Asia. The train has facilitated
connectivity to 44 mainland destinations, as discussed in chapter four (Yang, Zhang, &
Wang, 2018). Apart from the railroad enhancing efficiency in travel, it also poses stiff
competition for Cathay Pacific following the recent purchase of Hong Kong Express. It is
therefore unclear whether the purchase was the right move for the airline. Besides, it
also unclear whether Cathay Group should maintain Hong Kong Express as a single
low-cost short-haul airline or it should absorb it into the mainline. The second future
55
investigation can cover on the environmental airline performance, carefully analysing
eco-efficiency of low-cost and full-service carriers.
5.7 ConclusionThe airline industry is seasonal where revenues can be affected by economic
recessions, instability, and unstable fuel prices. To combat competition and ensure
stability, airlines have to take into consideration the cornerstones of the industry and
adopt effective development strategies. The principal significance of this paper has
been to show how full-service carriers are affected by the presence of low-cost airlines
and what survival strategies they can pursue. Based on the merger between British
Airways and Iberia, the research concludes that airline mergers may result in re-
organization of the route structure in favour of the hubs of the larger airline. In summary,
many scholars have documented positive impacts of the influx of low-cost carriers in
promoting route competition. However, this research provides an argument that these
impacts must also be weighed against the decrease in performance of hub operators.
56
ReferencesAbeyratne, R. (2016). Achieving Competitive Advantage through Connectivity and
Innovation: An Application in Airline Hubbing. In Competition and Investment in Air
Transport (pp. 131-143). Cham: Springer.
Ahmed, S. (2017). Strategic Sales Management of AirAsia in Bangladesh. [online]
Available at: http://dspace.bracu.ac.bd/xmlui/handle/10361/8957 [Accessed 8 July
2019].
Albers, S., Baum, H., Auerbach, S., & Delfmann, W. (2017). Strategic Management in
the Aviation Industry. New York: Routledge.
Allroggen, F., Wittman, M. D., & Malina, R. (2015). How Air Transport Connects The
World- A New Metric of Air Connectivity and its Evolution Between 1990 and 2012.
Transportation Research Part E: Logistics and Transportation Review, 80, pp. 184-201.
Al-Sayeh, K. M. (2014). The Rise of the Emerging Middle East Carriers: Outlook and
Implications for the Global Airline Industry. Doctoral Dissertation, Massachusetts
Institute of Technology).
Aydin, R. & Morefield, R. (2010). Hub-and-Spoke Airlines versus Low-Cost Airlines and
Price Discrimination. Journal of Business & Economics Research (JBER), 8(5), 1-10.
Baltheiser, F. A. (2018). The Performance Effect of Business Model Change in the
Airline Industry: Evidence from Low-Cost Carriers. Doctoral Dissertation, Universidade
Católica Portuguesa Reitoria. Available at: https://repositorio.ucp.pt/handle/10400.14/25757
[Accessed 8 July 2019].
Bardai, A. M., Er, A. Z., Johari, M. K., & Noor, A. M. (2017). A Review of Kuala Lumpur
International Airport (KLIA) as a Competitive South-East Asia Hub. In IOP Conference
Series: Materials Science and Engineering (Vol. 270, No. 1, p. 012039). IOP Publishing.
Barros, C. P., & Couto, E. (2013). Productivity Analysis of European Airlines, 2000–
2011. Journal of Air Transport Management, 31, pp. 11-13.
57
Bartlik, M. (2016). The Impact of EU Law on the Regulation of International Air
Transportation. New York: Routledge.
Belobaba, P., Odoni, A. & Barnhart, C. (2015). The global Airline Industry. Hoboken, NJ:
John Wiley & Sons.
Besanko, D., Dranove, D., Shanley, M. & Schaefer, S. (2016). Economics of Strategy.
Hoboken: NJ: John Wiley & Sons, Inc.
Bilotkach, V., & Lakew, P. A. (2014). On sources of market power in the airline industry:
Panel data evidence from the US airports. Transportation Research Part A: Policy and
Practice, 59, pp. 288-305.
Bitzan, J., & Peoples, J. (2016). A Comparative Analysis of Cost Change for Low-Cost,
Full-Service, And Other Carriers in the US Airline Industry. Research in Transportation
Economics, 56, pp. 25-41.
Borenstein, S. (2017). The Evolution of US Airline Competition. In Low Cost Carriers
(pp. 1-31). New York: Routledge.
Bowen Jr, J. T. (2016). “Now Everyone Can Fly”? Scheduled Airline Services to
Secondary Cities in Southeast Asia. Journal of Air Transport Management, 53, pp. 94-
104.
Bright, C. (14 Mar 2019). Cathay Pacific Returns to Profitability after Two Years of
Losses. Available at:
https://www.businesstraveller.com/business-travel/2019/03/14/cathay-pacific-returns-to-
profitability-after-two-years-of-losses/ [Accessed 8 July 2019].
Brueckner, J. & Pels, E. (2005). European Airline Megers, Alliance Consolidation, and
Consumer Welfare. Journal of Air Transportation Management, 11, pp. 27-41.
Burghouwt, G. (2016). Airline Network Development in Europe and Its Implications for
Airport Planning. Abingdon-on-Thames: Routledge.
58
Burney, A. (2008). Inductive And Deductive Research Approach. Available At:
Https://Www.Researchgate.Net/Publication/330350434_Inductive_And_Deductive_Res
earch_Approach / [Accessed 8 July 2019].
Button, K. (2017). Airline Deregulation: International Experiences. New York: Routledge.
Button, K., & Swann, D. (2017). Aviation Policy In Europe. In Airline Deregulation (Pp.
85-123). New York: Routledge.
CAPA (2012). Iberia Express Launches as Europe’s Latest Salvo io Bring The Short-
Haul Model to Profitability. Available at:
https://centreforaviation.com/analysis/reports/iberia-express-launches-as-europes-
latest-salvo-to-bring-short-haul-model-to-profitability-70547 [Accessed 8 July 2019].
Cathay Pacific Outlook: HK Express & Runway 3 are Golden Opportunities. (2019).
CAPA. Available at: https://centreforaviation.com/analysis/reports/cathay-pacific-
outlook-hk-express--runway-3-are-golden-opportunities-465364 [Accessed 15 July
2019].
Chang, Y. C. (2010). The Development of Regional Airports in Asia. WIT Transactions
on State-of-the-art in Science and Engineering, p. 38.
Chen, J. (22 Jul 2019). Cathay Pacific Completes Acquisition of HK Express. Available
at: https://www.businesstraveller.com/business-travel/2019/07/22/cathay-pacific-
completes-acquisition-of-hk-express/ [Accessed 15 July 2019].
Chen, L., & Pawlikowski, H. (2015). The Expansion of Low-Cost Carriers into the Long-
Haul Market: A Strategic Analysis of Norwegian Air Shuttle ASA. Master's Thesis,
Norwegian School of Economics. Available at:
https://openaccess.nhh.no/nhh-xmlui/bitstream/handle/11250/2375490/
masterthesis.PDF?sequence=1 [Accessed 11 July 2019].
Chen, R. (2017). Competitive Responses of an Established Airline to the Entry of a
Low-Cost Carrier into Its Hub Airports. Journal of Air Transport Management, 64, pp.
113-120.
59
Cheng, H. G., & Phillips, M. R. (2014). Secondary Analysis of Existing Data:
Opportunities and Implementation. Shanghai Archives Of Psychiatry, 26(6), p. 371.
Cheng, T. C., & Yuen, A. (2016). Exploring the Potential of Asian Low-Cost Carriers
Forming Strategic Alliances. Available at:
https://tichung.com/static/Yr4_DSME4080__final_essay_1155043421.pdf [Accessed 16
July 2019].
China's Bullet Trains Are Coming For Hong Kong's Airlines. (2018). Bloomberg News.
Available at: https://www.bloomberg.com/news/features/2018-09-17/china-s-bullet-
trains-are-coming-for-hong-kong-s-airlines [Accessed 13 July 2019].
Christensen, L. (2016). Environmental Impact of Long Distance Travel. Transportation
Research Procedia, 14, pp. 850-859.
Christensen, L. B., Johnson, B., Turner, L. A., & Christensen, L. B. (2011). Research
Methods, Design, and Analysis. New York: Pearson
Çiftçi, M. E., & Şevkli, M. (2015). A New Hub and Spoke System Proposal: A Case
Study for Turkey's Aviation Industry. Journal of Air Transport Management, 47, pp. 190-
198.
Cook, G. N. & Goodwin, J. (2008). Airline Networks: A Comparison of Hub-And-Spoke
and Point-To-Point Systems. Journal of Aviation/Aerospace Education & Research,
17(2), pp. 1-14.
Cook, G. N., & Billig, B. (2017). Airline Operations and Management: A Management
Textbook. New York: Routledge.
Cronin, C. (2014). Using Case Study Research as a Rigorous Form of Inquiry. Nurse
Researcher, 21(5), pp. 19-27
De Wit, J. G., & Zuidberg, J. (2012). The Growth Limits of the Low-Cost Carrier Model.
Journal of Air Transport Management, 21, pp. 17-23.
60
Dempsey, P. S. (2018). Regulatory Schizophrenia: Mergers, Alliances, Metal-Neutral
Joint Ventures and the Emergence of a Global Aviation Cartel. J. Air L. & Com., 83, p.
3.
Dennis, N., & Pitfield, D. (2018). A Tale of Two Cities: The Impact of Airline Mergers
and Consolidation in London and New York. Transportation Research
Record, 2672(23), pp. 1-7.
Diaconu, L. (2012). The Evolution of the European Low-Cost Airlines ‘Business Models.
Ryanair Case Study. Procedia-Social and Behavioral Sciences, 62, pp. 342-346.
Dobruszkes, F. & Wang, J. (2019). Developing a low-cost airline in a semi-protected
regime: Comparing China to Europe and the US. Journal of Transport Geography, 77,
pp. 48-58.
Du, J. (2017). How Service Brand Equity Can Be Built Up: A Case Study on the
Branding Strategy of Cathay Pacific Airway. In 2017 3rd International Conference on
Humanities and Social Science Research (ICHSSR 2017). Atlantis Press.
Du, W. B., Zhou, X. L., Lordan, O., Wang, Z., Zhao, C., & Zhu, Y. B. (2016). Analysis of
the Chinese Airline Network as Multi-Layer Networks. Transportation Research Part E:
Logistics and Transportation Review, 89, pp. 108-116.
Duff, P. (2018). Case Study Research in Applied Linguistics. New York: Routledge.
Duval, D. T. (Ed.). (2016). Air Transport in the Asia pacific. New York: Routledge.
Eisenhardt, K. M., Graebner, M. E., & Sonenshein, S. (2016). Grand Challenges and
Inductive Methods: Rigor Without Rigour Mortis. Academy of Management Journal,
59(4), p. 1113
Elliot, M. (Apr 19, 2015). Malaysia Airlines cancels Frankfurt flights. Available at:
https://www.traveldailymedia.com/malaysia-airlines-cancels-frankfurt-flights/ [Accessed
13 July 2019].
61
Essays, UK. (2018). The Merger Of British Airways And Iberia Management Essay.
Available at: https://www.ukessays.com/essays/management/the-merger-of-british-
airways-and-iberia-management-essay.php?vref=1 [Accessed 18 July 2019].
Fageda, X., Suau-Sanchez, P., & Mason, K. J. (2015). The Evolving Low-Cost Business
Model: Network Implications of Fare Bundling and Connecting Flights in
Europe. Journal of Air Transport Management, 42, pp. 289-296.
Farooq, M. S., Salam, M., Fayolle, A., Jaafar, N., & Ayupp, K. (2018). Impact of Service
Quality on Customer Satisfaction in Malaysia Airlines: A PLS-SEM Approach. Journal of
Air Transport Management, 67, 169-180.
Flouris, T. (2007). Financial Comparisons across Different Business Models in
Canadian Airline Industry. Journal of Air Transportation, 12, pp. 25-52.
Fu, X., & Peoples, J. (2018). Introduction and Overview', Airline Economics in Asia
(Advances in Airline Economics, Volume 7) (pp. 1-8). Bingley, UK: Emerald Publishing
Limited
Fu, X., Lei, Z., Wang, K., & Yan, J. (2015). Low Cost Carrier Competition and Route
Entry in an Emerging but Regulated Aviation Market–The Case of China. Transportation
Research Part A: Policy and Practice, 79, pp. 3-16.
Fu, X., Oum, T. H., & Zhang, A. (2010). Air Transport Liberalization and its Impacts on
Airline Competition and Air Passenger Traffic. Transportation Journal, 49(4), pp. 371-
390.
Garrett, M. (Ed.). (2014). Encyclopedia of Transportation: Social Science and Policy.
Thousand Oaks, CA: SAGE
Gavrea, C., & Dézsi, K. (2018). The Impact of Low-Cost Carriers Growth: A
Comparative Study. Managerial Challenges of the Contemporary Society.
Proceedings, 11(1), p. 101.
Ghauri, P. N., & Grønhaug, K. (2005). Research Methods in Business Studies: A
Practical Guide. London: Pearson Education.
62
Gillen, D. & Gados, A. (2008). Airlines within Airlines: Assessing the Vulnerabilities of
Mixing Business Models. Research in Transportation Economics, 24(1), pp. 25-35.
Gillen, D. & Morrison, W. G. (2005). Regulation, Competition and Network Evolution in
Aviation. Journal of Air Transport Management, 11(3), pp. 161-174.
Gilroy, R. (2019). Top 50 News. Transport Topics, p. 1.
Goetz, A. R., & Vowles, T. M. (2009). The Good, the Bad, and The Ugly: 30 Years of
US Airline Deregulation. Journal of Transport Geography, 17(4), pp. 251-263.
Graham, A. (2017). The Regulation of US airports. In The Economic Regulation of
Airports (pp. 63-72). New York: Routledge.
Graham, B. & Shaw, J. (2008). Low-Cost Airlines in Europe: Reconciling Liberalization
and Sustainability. Geoforum, 39(3), pp. 1439-1451.
Griffiths, M. D. (2010). The Use of Online Methodologies in Data Collection for
Gambling and Gaming Addictions. International Journal of Mental Health And
Addiction, 8(1), pp. 8-20.
Gross, S., & Lück, M. (Eds.). (2016). The Low-Cost Carrier Worldwide. New York:
Routledge.
Gustafsson, J. (2017). Single Case Studies Vs. Multiple Case Studies: A Comparative
Study. Available at:
http://www.diva-portal.org/smash/get/diva2:1064378/FULLTEXT01.pdf [Accessed 19
July 2019]
Halpern, N., & Graham, A. (2016). Factors Affecting Airport Route Development Activity
and Performance. Journal of Air Transport Management, 56, pp. 69-78.
Halpern, N., Graham, A., & Dennis, N. (2016). Low-Cost Carriers and the Changing
Fortunes of Airports in the UK. Research in Transportation Business &
Management, 21, pp. 33-43.
63
Hanaoka, S. (2018). Low-cost Carriers in the Japanese Aviation Market', Airline
Economics in Asia (Advances in Airline Economics, Volume 7). Emerald Publishing
Limited.
Hanaoka, S., Takebayashi, M., Ishikura, T., & Saraswati, B. (2014). Low-Cost Carriers
versus Full-Service Carriers in ASEAN: The Impact of Liberalization Policy on the
Competition. Journal of Air Transport Management, 40, pp. 96-105.
Hancock, D. R., & Algozzine, B. (2016). Doing Case Study Research: A Practical Guide
for Beginning Researchers. Teachers College Press.
Harrell, M. C., & Bradley, M. A. (2009). Data Collection Methods. Semi-Structured
Interviews and Focus Groups. Rand National Defense Research Inst santa monica ca.
Herdman, A. (2016). Asia Pacific Aviation Growth Dynamics & Sustainability. Available
at:
http://www.aapairlines.org/wpcontent/uploads/2017/09/AAPA_60AP_DG_PRESENTATI
ONS-_18Nov2016.pdf [Accessed 14 July 2019]
Hind, P. (2007). Developing the Long Haul Low-Cost Model. Available at:
www.airneth.com [Accessed 19 July 2019].
Holloway, S. (2017). Straight and Level: Practical Airline Economics: Practical Airline
Economics. New York: Routledge.
Huang, J., & Wang, J. (2017). A Comparison of Indirect Connectivity in Chinese Airport
Hubs: 2010 vs. 2015. Journal of Air Transport Management, 65, 29-39.
Hudson, S., & Hudson, L. (2017). Marketing in Action: Low Cost Airlines Take Off.
Thousand Oaks, CA: SAGE Publications Ltd.
Humphreys, I., Graham F., Dennis, N., & Ison, S. (2007). The Transferability of the Low-
Cost Model To Long-Haul Airline Operations. Tourism Management, 28, pp. 391-398
64
Hyett, N., Kenny, A., & Dickson-Swift, V. (2014). Methodology or Method? A Critical
Review of Qualitative Case Study Reports. International Journal of Qualitative Studies
on Health and Well-Being, 9(1), p. 23606.
Janic, M. (2017). Transport Systems: Modelling, Planning, and Evaluation. Boca Raton,
FL: CRC Press
Jansson, C. (2018). Financial Resilience: The Role of Financial Balance, Profitability,
and Ownership. The Resilience Framework (pp. 111-131). Springer, Singapore.
Jim, L. (2018). LEVEL adds new Barcelona Trans-Atlantic routes in NS19"Routesonline.
UBM (UK) Ltd. Retrieved 8 November 2018.
Johnson, D., Hess, S., & Matthews, B. (2014). Understanding Air Travellers' Trade-Offs
Between Connecting Flights and Surface Access Characteristics. Journal of Air
Transport Management, 34, pp. 70-77.
Johnston, A., & Ozment, J. (2013). Economies of scale in the US airline
industry. Transportation Research Part E: Logistics and Transportation Review, 51,
pp.95-108.
Johnston, M. P. (2017). Secondary Data Analysis: A Method of Which the Time Has
Come. Qualitative and Quantitative Methods in Libraries, 3(3), pp. 619-626.
King, J. M. (2017). Business Strategy and Airline Models for Operating Managers.
In Airline Operations (pp. 31-43). Routledge.
Kjærnes, K. K., & Qvist, C. (2011). Valuation of Norwegian Air Shuttle ASA.
Copenhagen Business School. Available at:
https://studenttheses.cbs.dk/handle/10417/2322 [Accessed 19 July 2019]
Kjærsgaard, M. A. (2015). Strategic Analysis and Valuation of Scandinavian Airlines.
Available at: https://studenttheses.cbs.dk/handle/10417/4813 [Accessed 14 July 2019]
Koo, T. T., Lim, C., & Dobruszkes, F. (2017). Causality Indirect Air Services and
Tourism Demand. Annals of Tourism Research, 67, pp. 67-77.
65
Kumar, R. (2019). Research Methodology: A Step-By-Step Guide for Beginners.
Thousand Oaks, CA: Sage Publications Limited.
Kwoka, J., Hearle, K., & Alepin, P. (2016). From the Fringe to The Forefront: Low Cost
Carriers And Airline Price Determination. Review of Industrial Organization, 48(3), 247-
268.
Lacar, F. (2009). Singapore Airlines: Factors Accounting For Marketplace Success.
Australian Journal of Business and Informatics, 4(1), pp. 1-14.
Laplace, I. & Latgé-Roucolle, C. (2016). Deregulation of the ASEAN Air Transport
Market: A Measure of Impacts of Airport Activities on Local Economies. Transportation
Research Procedia, 14(2106), pp. 3721-3730.
Lawton, T. C. (2017). Cleared for Take-Off: Structure and Strategy in the Low Fare
Airline Business. New York: Routledge.
Lawton, T., Rajwani, T., & Doh, J. (2013). The Antecedents of Political Capabilities: A
Study of Ownership, Cross-Border Activity and Organization at Legacy Airlines in a
Deregulatory Context. International Business Review, 22(1), pp. 228-242.
LCCs in the Asia Pacific: Two Decades of Steady Market Share Gains. (17-Jan-2019).
Centre of Aviation. Available at: https://centreforaviation.com/analysis/reports/lccs-in-
asia-pacific-two-decades-of-steady-market-share-gains-456096 [Accessed 11 July
2019]
Lee, B. L., & Worthington, A. C. (2014). Technical Efficiency of Mainstream Airlines and
Low-Cost Carriers: New Evidence Using Bootstrap Data Envelopment Analysis
Truncated Regression. Journal of Air Transport Management, 38, pp. 15-20.
Lee, J. W., & Horton, W. (2018). Fifth Freedom Traffic Rights: Formidable Threat or
Theoretical Concern?. Air and Space Law, 43(3), pp. 303-318.
Leick, R., & Wensveen, J. (2014). The Airline Business. The Business of
Transportation. . In: Prokop D (ed), The Business of Transportation (pp. 65-99). Santa
Barbara, CA: Praeger Publishing.
66
Lim, S. H., & Hong, Y. (2014). Fuel Hedging and Airline Operating Costs. Journal of Air
Transport Management, 36, 33-40.
Lin, M. H., & Zhang, Y. (2016). Hub-Carrier Scheduling and Hub-Airport Congestion
Pricing. Available at SSRN 2715407.
Lynes, J. K. & Dredge, D. (2006). Going Green: Motivations for Environmental
Commitment in The Airline Industry. A Case Study of Scandinavian Airlines. Journal of
Sustainable Tourism, 14(2), pp. 116-138.
Ma, W., Wang, Q., Yang, H., Zhang, A., & Zhang, Y. (2019). Effects of Beijing-Shanghai
High-Speed Rail on Air Travel and Fare: Passenger Types, Airline Groups and Tacit
Collusion. Res. Transport. Econ., 74, pp. 64-76.
Maasoumi, E., Heshmati, A., Wan, G., Marti, L., Puertas, R., & Calafat, C. (2015). The
Efficiency of Airlines: Hub and Spoke Versus Point-to-Point. Journal of Economic
Studies, 42(1), pp. 157-166.
Mackey, A., & Gass, S. M. (2015). Second Language Research: Methodology and
Design. New York: Routledge.
Maertens, S. (2018). A Metric to Assess The Competitive Position of Airlines and Airline
Groups in the Intra-European Air Transport Market. Research in Transportation
Economics, 72, pp. 65-73.
Malaysia Aviation: Growth Slows Profits Under Pressure (2019). Available at:
https://centreforaviation.com/analysis/reports/malaysia-aviation-growth-slows-profits-
under-pressure-463080 [Accessed 11 July 2019]
Marti, L., Puertas, R., & Calafat, C. (2015). The Efficiency of Airlines: Hub and Spoke
Versus Point-To-Point. Journal of Economic Studies, 42(1), pp. 157-166.
Martini, G., Manello, A., & Scotti, D. (2013). The Influence of Fleet Mix, Ownership and
LCCs on Airports’ Technical/Environmental Efficiency. Transportation Research Part E:
Logistics and Transportation Review, 50, pp. 37-52.
67
Maslen, R. 2012). Norwegian Announces Initial Long-Haul Destinations. Available at:
https://www.routesonline.com/news/29/breaking-news/168300/norwegian-announces-
initial-long-haul-destinations/ [Accessed 11 July 2019]
Materna, M., & Tomova, A. (2016). Long-Haul Low-Cost Air Services: Revealing Key
Competitive Features of Airline within Airline Strategy. Ekonomiczne Problemy Usług,
1(124), pp. 151-162.
Mattos, B. & Fregnani, J. A. G. (2016). Effects of the Airline Deregulation Act on
Aeronautical Industry. International Journal of Advance Innovations, Thoughts and
Ideas, 3(161), pp. 2277-1891.
Morrell, P. (2005). Airlines within Airlines: An Analysis Of US Network Airline
Responses to Low Cost Carriers. Journal of Air Transport Management, 11(5), pp. 303-
312.
Morrell, P. S. (2018). Airline Finance. New York: Routledge.
Morrell, P., & Swan, W. (2006). Airline Jet Fuel Hedging: Theory and Practice.
Transport Reviews, 26(6), pp. 713-730.
Morrison, S. & Winston, C. (2010). The Economic Effects of Airline Deregulation.
Washington: Brookings Institution Press
Moss, D. L. (2019). Alliances and Antitrust Immunity: Why Domestic Airline Competition
Matters. The Air and Space Lawyer, 32(1), pp. 1-18.
Myre, M. A. (2015). An Analysis of Airline’s Financial Performance and Its Influencing
Factors. Bachelor’s Thesis, Aarhus University School of Business and Social Sciences.
Namukasa, J. (2013). The Influence of Airline Service Quality on Passenger Satisfaction
and Loyalty: The Case of Uganda Airline Industry. The TQM Journal, 25(5), pp. 520-
532.
Nasir, A. M., Ahmed, A., & Barkat, W. (2017). Operational Performance and Financial
Performance of Malaysia Airlines. Paradigms, 11(1), p. 34.
68
Nordbø, C., & Raza, J. (2016). Valuation of Norwegian Air Shuttle ASA. Master's
Thesis, University of Stavanger, Norway.
O’Brien, J. (2019). Marketing a New Route: Norwegian Flies London–Singapore.
Thousand Oaks, CA: SAGE Publications
Oliveira, A. V. (2017). An Empirical Model of Low-Cost Carrier Entry. In Low-Cost
Carriers (pp. 89-112). New York: Routledge.
Pallini, T. (2018). Low-Cost Airlines Crossing the Pond: Norwegian Air International.
Available at: https://airlinegeeks.com/2018/03/20/low-cost-airlines-crossing-the-pond-
norwegian-air-international/ [Accessed 11 July 2019]
Pannucci, C. J., & Wilkins, E. G. (2010). Identifying and Avoiding Bias in
Research. Plastic and Reconstructive Surgery, 126(2), p. 619.
Pearson, J., O'Connell, J. F., Pitfield, D. E., & Ryley, T. (2015). Competition between
Asian Network Airlines and Low-Cost Carriers: Strategic Analysis. Transportation
Research Record, 2501(1), pp. 56-65.
Pearson, J., & Merkert, R. (2014). Airlines-Within-Airlines: A Business Model Moving
East. Journal of Air Transport Management, 38, pp. 21-26.
Pickrell, D. (2017). The Regulation and Deregulation of US Airlines. In Airline
Deregulation (pp. 5-47). New York: Routledge.
Ping, C. Y., Kee, D. M. H., Ling, C. Y., Xian, C. S., Sian, W. C., & Alnasser, Y. H.
(2019). Malaysia Airlines Berhad. International journal of Tourism and hospitality in Asia
Pasific, 2(2), pp. 1-14.
Rai, A. (2013). Measurement of Efficiency in the Airline Industry Using Data
Envelopment Analysis. Investment Management and Financial Innovations, 10(1), pp.
38-45.
69
Rajwani, T., & Paroutis, S. (2013). Institutional Conditions and Political Capabilities: An
Examination of Airlines Reactions To 9/11. Academy of Management Proceedings.
p.10.
Rintakoski, A. (2018). Financial Analysis of Norwegian Air Shuttle ASA. Available at
https://www.theseus.fi/bitstream/handle/10024/158002/Rintakoski_Amanda.pdf?
sequence=1&isAllowed=y [Accessed 24 July 2019]
Ryerson, M. S., & Kim, H. (2013). Integrating Airline Operational Practices into
Passenger Airline Hub Definition. Journal of Transport Geography, 31, pp. 84-93.
Ryerson, M. S., & Kim, H. (2013). Integrating Airline Operational Practices into
Passenger Airline Hub Definition. Journal of Transport Geography, 31, pp. 84-93.
Sarker, M. A. R., Hossan, C. G., & Zaman, L. (2012). Sustainability and Growth of Low
Cost Airlines: An Industry Analysis in Global Perspective. American Journal of Business
and Management, 1(3), pp. 162-171.
Sarlioglu, B., & Morris, C. T. (2015). More Electric Aircraft: Review, Challenges, and
Opportunities For Commercial Transport Aircraft. IEEE transactions on Transportation
Electrification, 1(1), pp. 54-64.
See, K. F., & Rashid, A. A. (2016). Total Factor Productivity Analysis of Malaysia
Airlines: Lessons from the Past and Directions for the Future. Research in
Transportation Economics, 56, pp. 42-49.
Shaw, S. (2016). Airline Marketing and Management. New York: Routledge.
Starkie, D. (2016). Aviation Markets: Studies in Competition and Regulatory Reform.
New York: Routledge.
Starman, A. B. (2013). The Case Study as a Type of Qualitative Research. Journal of
Contemporary Educational Studies/Sodobna Pedagogika, 64(1). pp. 1-14.
70
Stephenson, C., Lohmann, G., & Spasojevic, B. (2018). Stakeholder Engagement in the
Development of International Air Services: A Case Study on Adelaide Airport. Journal of
Air Transport Management, 71, pp. 45-54.
Switzer, J. A., Demaerschalk, B. M., Xie, J., Fan, L., Villa, K. F., & Wu, E. Q. (2013).
Cost-Effectiveness of Hub-and-Spoke Telestroke Networks for the Management of
Acute Ischemic Stroke from the Hospitals’ Perspectives. Circulation: Cardiovascular
Quality and Outcomes, 6(1), pp. 18-26.
Taneja, N. K. (2016). Adaptation Strategies by Airlines. In Airline Industry (pp. 101-125).
New York: Routledge.
Temba, M. (2013). The Assessment of Service Quality and Customer Satisfaction Using
the SERVQUAL Model: The Case Study of Tanzania Telecommunications Company
Limited (TTCL). Doctoral Dissertation, The Open University of Tanzania.
The Economic Contribution of Qantas’ London-Perth Direct Flight. Deloitte Access
Economics. (2019). Available at:
https://www.qantasnewsroom.com.au/wp-content/uploads/2019/03/190326-QANTAS-
PERTH-LONDON-ECONOMIC-IMPACT-REPORT.pdf [Accessed 11 July 2019]
Tripathy, J. P. (2013). Secondary Data Analysis: Ethical Issues and Challenges. Iranian
Journal of Public Health, 42(12), p. 1478.
Unluer, S. (2012). Being an Insider Researcher While Conducting Case Study
Research. Qualitative Report, 17, p. 58.
Ussing J. (2013). Den grønne SAS-bog og de Andre år. Available at: www.business.dk
[Accessed 24 July 2019]
Vasigh, B., Fleming, K., & Tacker, T. (2018). Introduction to Air Transport Economics:
From Theory to Applications. New York: Routledge.
Walliman, N. (2017). Research Methods: The Basics. New York: Routledge.
71
Wang, Y. C., & Wong, J. T. (2019). Exploring Air Network Formation and Development
With A Two-Part Model. Journal of Transport Geography, 75, pp. 1-14.
Wensveen, J. (2007). Opportunities for the Long-Haul Low-Cost Model. Available at:
http://www.airneth.com/uploads/media/Presentation_John_Wensveen.pdf [Accessed 11
July 2019]
Whyte, R., & Lohmann, G. (2016). Airline business models. Air Transport Management:
An International Perspective; Budd, L., Ison, S., Eds, pp. 107-121.
Williams, G. (2017). The Airline Industry and the Impact of Deregulation. New York:
Routledge.
Williams, G. (2017). The Airline Industry and the Impact Of Deregulation. New York:
Routledge.
Wong, W. S. (2018). Transitory Identity of Hong Kong: A Reading of Cathay Pacific
Airways Television Commercials. In The Disappearance of Hong Kong in Comics,
Advertising and Graphic Design (pp. 141-161). Palgrave Macmillan, Cham.
Wongleedee, K. (2017). Customer Satisfaction in the Airlines Industry: Comparison
Between Low-Cost and Full Service Airlines. Aktual'ni Problemy Ekonomiky= Actual
Problems in Economics, 187, pp. 218-222.
Wu, Z., Li, B., Dang, C., Hu, F., Zhu, Q., & Fu, B. (2017). Solving Long Haul Airline
Disruption Problem Caused By Groundings Using a Distributed Fixed-Point
Computational Approach to Integer Programming. Neurocomputing, 269, pp. 232-255
Yang, H., Zhang, Q., & Wang, Q. (2018). Airline Deregulation, Market Competition, and
Impact of High-speed Rail on Airlines in China. In Airline Economics in Asia (pp. 79-
101). Emerald Publishing Limited.
Yazan, B. (2015). Three Approaches to Case Study Methods In Education: Yin,
Merriam, and Stake. The Qualitative Report, 20(2), 134-152.
72
Yin, R. K. (2017). Case Study Research and Applications: Design And Methods.
Thousand Oaks, CA: Sage publications.
Zainal, Z. (2007). Case Study as a Research Method. Jurnal Kemanusiaan, 5(1), pp. 1-
14.
Zhang, A., & Zhang, Y. (2018). Airline Economics and Finance. In The Routledge
Companion to Air Transport Management (pp. 171-188). New York: Routledge.
Zhang, A., Hanaoka, S., Inamura, H., & Ishikura, T. (2017). Low-Cost Carriers in Asia:
Deregulation, Regional Liberalization And Secondary Airports. In Low-Cost Carriers (pp.
55-69). New York: Routledge.
Zhang, A., Hanaoka, S., Inamura, H., & Ishikura, T. (2017). Low-Cost Carriers in Asia:
Deregulation, Regional Liberalization, and Secondary Airports. In Low-Cost Carriers
(pp. 55-69). New York: Routledge.
73
