ABSTRACT
Air France, British Airways, PanAm, Qantas, Swissair, Lufthansa, KLM, Aer Lingus, Olympic, Iberia, Aeroflot, Alitalia – these are just a few of the brands which, for decades, represented passenger air travel around the world. Not long ago, many of these airlines were state-owned, had entrenched monopolistic route rights and enjoyed quasi-diplomatic status by ‘flying the flag’ for the country with which their brand name was synonymous. Today the industry looks radically different. Of those same airlines, PanAm and Swissair no longer exist, Alitalia and Olympic teeter on the verge of collapse, and Air France has merged with KLM. Aer Lingus has reinvented itself as a low-cost carrier and the remainder, with varying degrees of success, have sought to remain significant players in an increasingly liberalized industry. Market deregulation, the privatization of state-owned carriers and the onslaught of new competitors, especially in the form of low-fare airlines, have caused the former flag carriers to rethink their business models. Cost efficiencies, service restructuring and profit maximization have come to the fore, as the ‘flag carrier’ has been superseded by the ‘legacy carrier’, a label used to differentiate mature airlines from the myriad of new carriers launched since deregulation began in the US in the late 1970s.
