ABSTRACT
The airline business is taking a major step towards maturity, fuelled by the growth and resilience in the low cost airline model. As liberalization progresses, traditional “flag carriers” and network carriers are forced to cut costs, create flexible resources, identify new ways of differentiation as well as pursuing a clearer market segmentation in order to remain competitive in liberalized markets. The two business models are likely to converge to a certain point, as the network carriers reduce costs and adapt their product offering and low cost carriers seek to pursue differentiation strategies themselves. This chapter highlights some of the reasons behind the current airline crisis and describes various elements of differentiation that in the right combination forms strategic solutions for a future market positioning.
