ABSTRACT
Newer airlines may emerge with more advanced business models that move them even further ahead. New paradigm airlines came along with a different business model—determine existing levels of demand within the context of the traditional business model as well as the potential level of demand within the context of a new business model. Many new airlines have low costs because they are new and are not burdened by legacy fleet, vendor contracts, and union contract provisions. A tendency exists to think of the financial community as consisting of only conventional banking. If the financial community were to decide to drive change in this area, governments would need to do their part by adopting enlightened competition policies that reflect the commercial realities of the marketplace. The financial community has the power to affect capacity by stricter terms of loans, and aircraft leases. Strategic alliances have produced some benefits in the areas of incremental revenue, product enhancement, and sharing of costs.
