Regulatory framework and policy issues
To formulate and implement an effective airline strategy, you first need to understand the impact of public policy and regulatory issues that shape the air transport business.
→ Chicago convention and role of ICAO
→ US/EU deregulation
→ Open skies agreements
→ CORSIA and ETS trading schemes
Air transport demand and supply
We will then move on to investigate the main current and future demand and supply drivers of air transport. We will also look into the short, medium and long term impact of the COVID-19 pandemic.
→ Trends and growth drivers
→ Customer segmentation
→ Price, income and time elasticities
Airline finance, cost and revenue structure
In this module you will get a broad overview of the typical P&L structure of an airline. We will discuss the most important costs and revenues and look into the interdependencies and sensitivities between these cost and revenue factors. We will also reflect on the differences in cost and revenue structures between the different airline business models, using the balance sheets of American Airlines, Ryanair and Lufthansa group as examples.
→ Operating revenues and costs, non-operating revenues and costs
→ Operating margins, benchmarking and KPIs
→ Impact of exchange rates
→ Wet-lease, dry-lease, damp-lease agreements
Airline business models and competitive strategies
Airline business models are key to define the value proposition, create comparative strategic advantage and hence formulate and shape the strategy of airlines. We will analyze various existing, failed and novel business models and put theory into practice through a group discussion on the Singapore Airlines and Lufthansa group airline brands and strategic positionings.
→ Business Model Canvas
→ Porter model
→ Multi-brand airline groups
Airline network development
Networks are a key aspect of airline business models. We will discuss the features, advantages and disadvantages of different airline networks, and link these with the potential impact of network structure and aircraft scheduling on the cost and revenue structure.
→ Point-to-point networks
→ Hub-and-spoke networks
→ Short-haul, medium-haul, long-haul and feeder networks
→ Aircraft scheduling
Airline marketing and strategic positioning
A fairly standardized airline product needs to be differentiated based on the chosen business model and identified customer segmentation to demonstrate and gain comparative strategic advantage. This module sheds light on the strategic positioning of an airline in the competitive landscape and provides you with tools to create strategic differentiated leverage.
→ Leisure travelers
→ Business travelers
→ VFR segmentation
→ Strategic positioning
Air cargo economics
Air cargo counts for an average of about 15% of passenger airlines’ revenues. With the increased freight payloads of new aircraft models, air cargo gains importance to run an airline profitably. This module looks into the different cargo business models and strategies.
→ Importance of air cargo
→ Air cargo business models and strategies
→ Air freight division economics
Strategic alliances are key in airline strategies. Lately, these alliances seem to loose importance and are gradually being replaced by airline joint ventures and equity alliances. In this module we will analyze the rise and fall of the Swissair Qualifliyer alliance. In an interactive case study, we will draw parallels from this failure with the recent defunct Etihad equity alliance and capture lessons learned. We will also look into other successful alliance and cooperation formats.
→ Roadmap towards strategic alliances
→ Cooperation formats
→ The future of alliances