Cleared for Take-Off : Structure and Strategy in the Low Fare Airline Business book cover
1st Edition

Cleared for Take-Off
Structure and Strategy in the Low Fare Airline Business

ISBN 9781138273061
Published October 25, 2016 by Routledge
234 Pages

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Book Description

Competition in air transport has been transformed by industry liberalization initiatives, resulting in the emergence of a wide array of new airline start-ups. Restrictions on low fares have been removed, uniform control requirements have been established, and legislation has facilitated the proliferation of low-fare carriers and competition. The new breed of independent low-fare airlines (LFAs) use market freedoms to shake up the industry's competitive dynamics and offer the customer the alternative of low prices and basic service. A successful low fare business model requires a ruthless and relentless focus on cost cutting and increased operational productivity, combined with an ability to generate and maintain a cash surplus and a cautious but steady fleet and route network expansion. The mastery of these techniques has made Southwest and Ryanair industry leaders, but others such as EasyJet also have a proven record of profitability and market growth, despite not always being the lowest cost or price providers. In this comprehensive and topical study the author systematically provides: · a step-by-step approach to understanding the conditions and choices shaping airline competitiveness, and an assessment of the nature of the low fare market · a comprehensive study of the low fare airline sector's evolution and growth and arguments as to why the European low fare industry is here to stay despite the inevitability of a shake out (reminiscent of the early 1980s in the USA). · unique insights into the success of low fare market leaders in Europe, North America and Australasia and an examination of the experience of US new entrants in the post-deregulations era, to discern strategic lessons for their counterparts; · critical perspectives on strategic management principles and practices in modern airline companies, discussing strategies for survival, and comparing competitive strategies for the main low fare airlines and their limitations; · key reasons for the robustness of the low fare business model during industry crises The book also determines the conditions and strategies that shape sustainable advantage for LFAs in highly competitive deregulated markets where established airlines seek to force out new entrants and considerable political interference remains. Moreover, the book considers why, during the airline industry crisis of late 2001, the market capitalizations of low fare leaders held steady in the wake of the US terrorist attacks, while the major carriers on both sides of the Atlantic were decimated. Cleared for Take-Off is essential reading for airline executives, aerospace manufacturers, regulatory and government transportation agencies, researchers or students of aviation management, transport studies, the travel industry and/or corporate strategy.

Table of Contents

Contents: Prologue: setting the scene; Liberalizing Europe’s air ways; The emergence of low fare competitors in Europe; Structure and competition in the European Airline industry; Getting the balance right: price-based competition and the cost-service trade-off; Leader of the pack: the Ryanair model; The contenders: competing low fare carriers in Europe; Trans-Atlantic lessons; The global emergence of price-based competitors; Epilogue: the way ahead for low fare airlines; Appendix; Bibliography; Index.

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Thomas Lawton is Senior Lecturer in Strategic Management at Imperial College Management School, University of London, UK. He holds degrees from University College Cork and the London School of Economics and Political Science and has a doctorate from the European University Institute. He is the author of Technology and the New Diplomacy (Avebury, 1997), European Industrial Policy and Competitiveness (Macmillan Business, 1999) and Strange Power (Ashgate, 2000). He is Managing Director of Nimbus Consulting Ltd, a firm specialising in management development and strategic business improvement.


'Tom Lawton has written an excellent book on the latest and fastest growing aspect of European aviation. He describes the emergence of the low fare carriers in the 1990s against a background of liberalization and increasing congestion, especially at major hub airports. The Ryanair model is contrasted with that of more recent low cost entrants in Europe, and similar developments in other parts of the world are also included. Predictions are difficult in this fast moving industry, but Lawton gives some pointers to the future, the depth of analysis provides the reader with more than enough material to draw their own conclusions.' Peter Morrell, Head of Air Transport Group, Cranfield University, UK ’Experts believe that the advent of low fare carriers is the single most important source of economic benefits generated from liberalization and deregulation of airline markets during the past two decades. Low cost carriers such as Southwest Airlines and Ryanair will continue to change rapidly the competitive landscape of the entire global airline industry, markets and the way consumers travel. In this much needed book, Dr. Lawton does an excellent job of examining business strategies of low airfare carriers and their impacts on full service airlines as well as describing the history, current status and future prospects of low fare airlines and their markets in a comprehensive manner. For this reason, I recommend this book strongly to airline executives, researchers, policy makers, regulators, and graduate students.’ Professor Tae Oum, Director, Centre for Transportation, University of British Columbia, Canada ’Thomas Lawton has compiled an impressive list of sources, and spoken to a number of key figures in the business...Lawton's preparation provides the reader with confidence that the insights gained from the book are based on sound industrial ideal introduction to the subject...Lawton has valuable contributions to make inthe field, particula