ABSTRACT
Chapter Overview
Most airlines have a competitive strategy embodying the type of value they intend delivering. Its choice of competitive strategy is reflected in each carrier’s operating strategy. The performance associated with an operating strategy depends on revenues earned from delivering expected benefits to targeted customers and on costs incurred delivering those benefits.
Part 2 of the book will look at airline revenues (traffic × yield) and costs (output × unit cost).
Part 3 will focus on key aspects of capacity management, which is in many respects the critical operations management challenge because it lies at the interface between cost and revenue streams.
Part 4 looks at several key macro-level metrics of operating performance.
What this opening chapter does is outline the strategic context within which costs and revenues are generated. It begins by identifying the scale of the challenge. It goes on to look at the theoretical underpinnings of the important but sometimes ill-defined concepts of ‘strategy’ and ‘business model’. It then examines the changes currently taking place in airline business models. It ends by describing in more detail the structure of the book.
