ABSTRACT
This chapter highlights the business environment before the opening up of the airline market. It presents major developments in the post-liberalisation period, essentially focusing on business model specialisation. The chapter analyses the very issue of convergence at both airline and airport business models, and continues by elaborating on the role of airport cities and the triangular relationship. Airport business model convergence seems to be taking place with a limited time lag, as hub airports become increasingly interested in serving Low Cost Carrier. The airports responded to the changing airline environment by adapting their infrastructure to the new needs and often changing their ownership structure. Airport cities are attractive locations for regional and international corporate headquarters, conference and exhibition centres, among others. As many traditional airlines were also owned by their respective states at the time, an indirect vertical business relationship developed between airlines and airports. The chapter discusses the evolution of airline and airport business models in the post-Second World War period.
