What determines the business activities in the airline industry? A theoretical framework

Abstract

Purpose – The main purpose of this paper is to create a model, which specifies the determinants of the airline business. This sector is chosen, as the airline industry is not only influenced by national characteristics, but also characterized by international standards and internationalization processes. Design/methodology/approach – In this paper, a systematic analysis of the research published over the past decades is carried out. This analysis incorporates the most acknowledged concepts and works in the field of airline management. Findings – The main determinants of the airline business are identified as: national culture, airline alliances, the implementation of the low-fare business model, the influence of the state on business, and the impact of market liberalization. The modern airline industry can be partially seen as an embodiment of the neoliberal ideas of the 1990s. Practical implications – The model may be used by academics and practitioners who work in the area of airline business management. Specifically in the case of a merger between two airlines, the model might serve as a useful tool to analyze potential synergies. Originality/value – Although various research has been conducted on describing the way that airline business is done, little focus has been paid on the factors that actually determine and change it. This paper analyzes the unique industry variables by which the airline industry is driven and determined.