scholarly journals The direction of airlines business models – up or down? (Post Covid-19 crisis – case study)

2021 ◽  
Vol 13 (1) ◽  
pp. 263-274
Author(s):  
Mária MRÁZOVÁ ◽  
Antonín KAZDA
Keyword(s):  
Business Model ◽  
Airline Industry ◽  
Business Models ◽  
Low Cost ◽  
Model Development ◽  
Point Of View ◽  
Aviation Industry ◽  
Role Of The State ◽  
Negative Impacts

This paper deals with airlines business models, mostly full service network carriers (FSNC) and low-cost carriers (LCC) and their position on the airline market. Covid-19 crisis causes many negative impacts on all airline industry. Hybridisation process in aviation industry is described many times in the past; now it has a stronger impact on airline business model development and it is oriented on different aspects than before. The paper emphasises the fact that low-cost carrier’s business model is much closer to the features of the FSNC carriers from the price point of view and vice versa. Furthermore, the authors introduce some other diversifications of airlines business models and the paper offers the new stimulus to move forward in this tough time for airlines business, paradoxically, thanks to Covid-19. Finally, yet importantly, the authors emphasise the important role of the state in the further direction of the airlines during and after the Covid-19 crisis

scholarly journals Low-Cost Carriers – Business Model Development

2015 ◽  
Vol 3 (1) ◽  
pp. 1-5
Author(s):  
Antonín Kazda ◽  
◽  
Mária Mrázová
Keyword(s):  
Business Model ◽  
Business Models ◽  
Low Cost ◽  
Model Development ◽  
Aviation Industry ◽  
Historical Evolution ◽  
Financial Benefits ◽  
Low Cost Carriers ◽  
Business Model Development

This paper deals with low-cost airline business model that has overwhelmingly been the favoured mode of the airline. Fast-changing aviation industry forces low-cost carriers to transform their initial business model and therefore, author stresses further opportunities for the expansion of these models to another direction with more concentration on customer ´s needs as well as company´s operational and financial benefits. One of the most important partial results is analysis of existing low-cost carrier’s business models, describe their historical evolution and propose future modifications to stay competitive and profitable.

scholarly journals The Role of Business Models in Developing Business Networks

2011 ◽  
pp. 221-231 ◽  
Author(s):  
Jukka Heikkila ◽  
Marikka Heikkila ◽  
Markku Tinnila
Keyword(s):  
Business Model ◽  
Large Scale ◽  
Business Models ◽  
Model Development ◽  
Customer Relationship ◽  
Business Networks ◽  
Geographical Distances ◽  
Business Model Development

Business models have received a substantial amount of interest recently. Also, various research studies have discussed business models, especially in the context of a single company operating in mass markets. Unfortunately, these models often are not applicable for complex products or services that build on long-term knowledge about customer tastes, facilities, and skills. Especially on global markets, the asset specificity and vast geographical distances make it difficult for any single company to provide this kind of service cost-efficiently on a large scale. Instead, it calls for cooperation among multiple firms. Creation of a joint business model for a collaborative network is a necessary means by which companies can coordinate cooperation in practice. The CSOFT metamodel proposed in this chapter provides guidance for joint business model development by emphasizing customer relationship and adjustment processes needed within the network.

scholarly journals Hybrid” airlines – Generating value between low-cost and traditional

2017 ◽  
Vol 11 (1) ◽  
pp. 577-587 ◽  
Author(s):  
Cristina Stoenescu ◽  
Camelia Monica Gheorghe
Keyword(s):  
Business Model ◽  
Airline Industry ◽  
Business Models ◽  
Low Cost ◽  
Theoretical Perspective ◽  
Loyalty Programs ◽  
Market Segments ◽  
New Business ◽  
Basic Services ◽  
Cost Efficient

Abstract Over the last years, the rise of low-cost airlines has determined significant changes in the airline industry and has shaped the evolution of the existing business models. Low-cost airlines started by offering basic services at very low prices; traditional airlines responded by equally cutting costs and reinventing the services offered, with an orientation towards braking down the fare and implementing add-ons, in order to become cost-efficient. As traditional airlines developed strategies to become competitive in this new environment, low-cost airlines started focusing on new ways of enhancing passenger experience and attracting new market segments. As a result, the fragmentation of the market segments addressed by low cost carriers and traditional airlines became less obvious and the characteristics of both business models started to blend at all levels (airline operation, distribution channels, loyalty programs, fleet selection). Thus, this new competition became the foundation of the development of a new „hybrid” carrier, between the low-cost and the traditional models. This article investigates the characteristics of the newly created business model, both from a theoretical perspective and by analysing several case studies. A particular attention will be granted to the evolution of the Romanian carrier Blue Air towards the “hybrid” model. The article focuses on determining the position of the “hybrid” airline in a market with carriers situated along both sides of this business model: lower cost vs. “better” experience and raises the question on how value can be generated in this context. Another aspect tackled is the understanding of the new segmentation of the market, as a consequence of the development of the new business model. In order to achieve this purpose, a survey has been conducted, aiming to mark out the travel preferences of the passengers travelling through the Henri Coandă International Airport.

scholarly journals The Role of Business Models in Developing Business Networks

2011 ◽  
pp. 235-249 ◽  
Author(s):  
Jukka Heikkila ◽  
Marikka Heikkila ◽  
Markku Tinnila
Keyword(s):  
Business Model ◽  
Large Scale ◽  
Business Models ◽  
Model Development ◽  
Customer Relationship ◽  
Business Networks ◽  
Geographical Distances ◽  
Business Model Development

Business models have received a substantial amount of interest recently. Also, various research studies have discussed business models, especially in the context of a single company operating in mass markets. Unfortunately, these models often are not applicable for complex products or services that build on long-term knowledge about customer tastes, facilities, and skills. Especially on global markets, the asset specificity and vast geographical distances make it difficult for any single company to provide this kind of service cost-efficiently on a large scale. Instead, it calls for cooperation among multiple firms. Creation of a joint business model for a collaborative network is a necessary means by which companies can coordinate cooperation in practice. The CSOFT metamodel proposed in this chapter provides guidance for joint business model development by emphasizing customer relationship and adjustment processes needed within the network.

scholarly journals Determinants of Financial Risk: An Empirical Application on Low-Cost Carriers

2019 ◽  
Vol 66 (3) ◽  
pp. 335-349
Author(s):  
Kasım Kiracı
Keyword(s):  
Business Model ◽  
Airline Industry ◽  
Financial Risk ◽  
Business Models ◽  
Low Cost ◽  
Panel Data Analysis ◽  
Rapid Development ◽  
Transformation Process ◽  
Size Firm ◽  
Second World

The airline industry has entered a rapid development and transformation process, especially after the Second World War. In this process, it is seen that the market structure changed and many private airlines were established. Due to increased competition, airlines have begun to follow various strategies and business models in order to gain a competitive advantage over each other. One of the business models successfully applied recently is the low-cost business model. Therefore, this study focuses on airline companies that applied the low-cost business model. The study aims to reveal the factors that determine the financial risk in airlines, which implements the low-cost business model. For this purpose, firstly, airline companies that implement the low-cost business model have been identified according to the classification in the literature. The study included an analysis of 13 airlines with the low-cost business model that was fully accessible to financial data for the 2004-2017 period. Panel data analysis was used in the study and Altman (1968) Z-Score and Springate (1978) S-Score were used in measuring financial risk. Empirical findings of the study reveal that firm leverage, asset structure, firm size, firm profitability, and liquidity ratio have an effect on financial risk.

scholarly journals MODEL BISNIS USAHA PAKAN IKAN MANDIRI BERBASIS MASYARAKAT DI PROVINSI DAERAH ISTIMEWA YOGYAKARTA

2017 ◽  
Vol 12 (1) ◽  
pp. 57
Author(s):  
Budi Wardono ◽  
Rikrik Rahadian ◽  
Tajerin Tajerin
Keyword(s):  
Business Model ◽  
Business Models ◽  
Low Cost ◽  
Model Development ◽  
Raw Material ◽  
Primary Data ◽  
Depth Information ◽  
Fish Feed ◽  
Community Based ◽  
Business Model Canvas

Program Gerakan Pakan Ikan Mandiri (GERPARI) bertujuan mengurangi ketergantungan pakanikan pabrikan melalui peningkatan pemanfaatan bahan baku lokal, yang diharapkan bisa menjadi modelbisnis pengembangan pakan ikan di Indonesia. Tujuan penelitian menyusun model bisnis usaha pakanikan mandiri berbasis masyarakat. Penelitian telah dilakukan pada bulan Januari-Desember 2016,dengan lokasi penelitian di pabrik pakan Kabupaten Sleman dan Gunungkidul, Provinsi Daerah IstimewaYogyakarta. Data yang digunakan adalah data primer dan data sekunder terkait manajemen pabrik pakanmandiri di kedua lokasi. Analisis data eksisting pabrik pakan untuk mengetahui dan menggambarkankinerja pabrik pakan saat ini. Analisis yang digunakan untuk menyusun model bisnis yang diperbaikidengan pendekatan Bisnis Model Canvas/Business Model Canvas (BMC) dengan strategi blueocean (blue ocean strategy). Analisis SWOT dengan pendekatan Blue Ocean menghasilkan strategiberdasarkan empat elemen yaitu: menghilangkan (eliminate); mengurangi (reduce); meningkatkan(raise) dan menciptakan (create). Pendalaman informasi dilakukan dengan cara Focus Group Discusion(FGD). Hasil yang diperoleh menunjukkan bahwa usaha pabrik pakan ikan mandiri memiliki resiko danketidakpasatian yang menyebabkan usahanya kurang menarik bagi pelaku usaha. Model Bisnis pabrikpakan ikan mandiri yang ada sekarang belum dapat mencerminkan kinerja “yang baik”. Penyebabutamanya adalah tidak terpenuhinya kontinuitas usaha dan rendahnya produktifitas pabrik pakan ikanmandiri karena tidak terjaminnya ketersediaan bahan baku secara kontinyu. Model bisnis yang diperbaikidiharapkan mampu meningkatkan kinerja pabrik pakan. Perbaikan model ini dilakukan dengan strategi:menciptakan ruang pasar yang belum ada pesaingnya; menciptakan dan menangkap peluang baru danmemadukan keseluruhan sistem untuk mengejar diferensiasi dengan biaya murah. Penerapan ModelBisnis yang diperbaiki perlu disertai dengan perbaikan identifikasi yang lebih spesifik terkait dengan:karakteristik ekosistem usaha, SDM dan manajemen pengelolaan.Title: Community Based Model for Self-sufficiency Fish Feed in Daerah Istimewa Yogyakarta ProvinceThe self-sufficient fish feed movement program (Gerakan Pakan Ikan Mandiri/GERPARI), aims atloosening the dependency toward manufactured fish feed through locally available raw material usage,hopefully could become the model of business development for Indonesian fish feed businesses. Thisresearch purpose is intending on developing a business model of a community-based, self-sufficient fishfeed business. The samples of fish feed manufacturers were observed during January-December 2016in Sleman and Gunungkidul regency, Special region of Yogyakarta. Data collected were secondary aswell as primary data related to the management and operational of the manufacturers. The analysis ofthe existing manufacturers was done to describe the current on-going performance, and the improvedbusiness model development was run using the Business Model Canvas (BMC) with the blue oceanstrategy. SWOT analysis with Blue Ocean approach obtained strategy based on four elements:eliminating; reduce; improve and create. An in-depth information collection was also conducted throughan FGD. The results showed that fish feed businesses model are heavily invested with high risks anduncertainties thus rendering them unfavorable in the investors’ perspective. Existing self-sufficientfish feed business models are considered to be inefficient, since both business continuity as well as productivity are mostly very low due to the lack of stable raw material supply. Therefore, the improvedfish feed business model would hopefully be able to enhance performance through several strategies,such as: creating market space with no competition; and creating and capturing new opportunities andmixing the whole system to seize differentiation with low cost. The application of the improved businessmodel would also require improvement in a more specific identification regarding business ecosystemcharacteristics, human resources and management.

scholarly journals The Viability of Long-Haul, Low Cost Business Models

2011 ◽  
Vol 2 (1) ◽  
pp. 69-91 ◽  
Author(s):  
Mauricio Emboaba Moreira ◽  
John O’Connell ◽  
George Williams
Keyword(s):  
Business Model ◽  
Business Models ◽  
Low Cost ◽  
Operating Cost ◽  
Aviation Industry ◽  
Cost Advantage ◽  
Low Cost Carriers ◽  
The World ◽  
Cost Simulation ◽  
Cost Differences

Recent events have confirmed the concerns that many within the aviation industry have held about the viability of the low cost business model for long-haul operations. This paper begins by reviewing the operating cost differences between low cost carriers (LCC) and legacy airlines in different regions of the world. This is followed by a summary of the various cost advantages of low cost carriers operating in short-haul markets. The main focus of the work, however, is a cost simulation involving the use of a Boeing 767-300 by both a LCC and a legacy carrier under varying operating assumptions. The research demonstrates that in none of the cases cited is the LCC cost advantage greater than 10%.

scholarly journals Trends and Prospects of the Development of the Global and National Air Transport Markets

2020 ◽  
pp. 99-109
Author(s):  
Sergiy Lytvynenko ◽  
Iryna Panasiuk
Keyword(s):  
Business Model ◽  
World Economy ◽  
Business Models ◽  
Low Cost ◽  
Air Transportation ◽  
Global Market ◽  
Air Transport ◽  
Aviation Industry ◽  
Market Expansion ◽  
The World

The article identified the preconditions for the development of the world economy which included the processes of globalization and internationalization. The role of air transport in the world economy is emphasized because its weight grows every year, because it provides the development of tourism, international programs and cooperation between individual regions of the world. There has been an increase in the number of multinational corporations, increasing the mobility of business passengers what is very important for the airlines. The critical analysis of scientific publications made it possible to state that in Ukraine and abroad the development of the air transportation market was studied by many scientists and their contribution to solving a number of scientific problems related to identifying prospects and opportunities for international and national air transportation markets as well as with the optimization of air carriers is important. However, it was found that insufficient research on recent trends and prospects for the development of global and national air transport markets is in the face of new challenges including the outbreak of coronavirus infection COVID-19. It was found that air passenger traffic in the global market has grown steadily in recent years by 7-8% every year and a quarter of sales depend on the regularity of air transportation of which 70% of this type of business determine the vectors of market expansion. The analysis of aviation accidents revealed that they have a very significant impact on the performance of the carrier whose aircraft suffered them. This applies to both reputational and purely financial losses. The problems with the Boeing 737 Max type also became a serious challenge for the aviation industry due to a number of incorrect design decisions of the world’s leading aviation concern and attempts to save on the training of pilots of this type of aircraft. It is noted that modern passengers are trying to minimize the time spent on travel, the trend of fragmentation of the holiday period is growing rapidly. As a result of the analysis of the domestic air transportation market, it was revealed that during 2019 there was an expansion of the market in general, as well as the activities of foreign airlines, travel from Ukraine to Europe and other parts of the world increased rapidly. A radical change in market trends was observed in mid-March 2020, when due to the spread of the COVID-19 coronavirus in the world, quarantine was introduced and regular flights were stopped. The national air carrier Ukraine International Airlines has declared a two-stage period of resumption of work after the end of quarantine. The authors found signs of hybridization of the airline’s business models at the first stage of the restart and the transition to the airline’s business model which has features of both point-to-point models and obvious features of the model of low-cost carriers. Whereas in the second stage the transition to a partial network model with low-cost models is most likely followed by the emergence of a new already stable hybrid business model based on network principles but with stable features of a low-cost airline.

Business Model Literature Overview

2014 ◽  
pp. 79-130 ◽  
Author(s):  
Ales Novak
Keyword(s):  
Business Model ◽  
Financial Reporting ◽  
Business Models ◽  
Potential Role ◽  
Financial Instruments ◽  
Business Logic ◽  
Literature Overview ◽  
Ifrs 9 ◽  
Definition Of

The term ?business model' has recently attracted increased attention in the context of financial reporting and was formally introduced into the IFRS literature when IFRS 9 Financial Instruments was published in November 2009. However, IFRS 9 did not fully define the term ‘business model'. Furthermore, the literature on business models is quite diverse. It has been conducted in largely isolated fashion; therefore, no generally accepted definition of ?business model' has emerged. Therefore, a better understanding of the notion itself should be developed before further investigating its potential role within financial reporting. The aim of this paper is to highlight some of the perceived key themes and to identify other bases for grouping/organizing the literature based on business models. The contributions this paper makes to the literature are twofold: first, it complements previous review papers on business models; second, it contains a clear position on the distinction between the notions of the business model and strategy, which many authors identify as a key element in better explaining and communicating the notion of the business model. In this author's opinion, the term ‘strategy' is a dynamic and forward-looking notion, a sort of directional roadmap for future courses of action, whereas, ‘business model' is a more static notion, reflecting the conceptualisation of the company's underlying core business logic. The conclusion contains the author's thoughts on the role of the business model in financial reporting.

Evaluating and Exploring Successful Disruptive Innovation in the Aviation Industry From the Perspective of Consumers

2021 ◽  
Vol 13 (4) ◽  
pp. 105-119
Author(s):  
Gang-Hoon Seo
Keyword(s):  
Word Of Mouth ◽  
Low Cost ◽  
Disruptive Innovation ◽  
Point Of View ◽  
Aviation Industry ◽  
Basic Service ◽  
Low Cost Carriers ◽  
Content Analyses ◽  
Southwest Airlines

Since Southwest Airlines' disruptive innovation was introduced, low-cost carriers (LCCs) have had a prominent impact on the aviation industry. Therefore, considerable attention has been paid to the LCC model. However, it is still not clear whether it is a successful disruptive innovation, or what factors and differentiation points for successful LCC service exist from the passengers' perspective. As this study's methodology, quantitative and qualitative content analyses are conducted using the word-of-mouth data of 1,854 passengers of 20 airlines. This study found that the LCC model is perceived as a successful disruptive innovation from the passengers' point of view. For successful LCC service, LC airlines should offer higher quality services than passengers' expectations using basic service elements. Also, good staff characteristics, leaving a professional impression, and providing good optional services could play a role as differentiation tools.

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