ABSTRACT
Making money in the airline business is difficult; always has been, given the nature and complexity of the business, as well as some unusual constraints under which managements work. However, 'business as usual' is no longer a viable option given (a) the increasingly seriousness of events (for example, the impact of the 11 September incidents vs. the impact of the Gulf War), (b) the speed at which the industry is being affected by the convergence of powerful forces-for example, globalization; customer expectations and power; and technology, and (c) the unacceptability of the financial performance for shareholders. Consequently, there is a critical need within the industry for proactive and strategic management to produce customer and shareholder values in today's rapid pace of economic, demographic, social, political, and technological change. While proactive and strategic management is important for all airlines, it is imperative for the second-tier airlines since we cannot count on the continuation of the three-tier structure mentioned above.
