Flexibility in Airline Business Models with Core Competence as an Indicator.

Abstract

The airline industry is often unstable and unpredictable forcing airlines to restructure and create flexible strategies that can respond to external operating environmental changes. In turbulent and competitive environments, firms with higher flexibility perform better and the value of these flexibilities depends on factors of uncertainty in the competitive environment. A model is sought for and arrived at, that shows how an airline business model will function in an uncertain environment with the least reduction in business performance over time. An analysis of the business model flexibility of 17 Airlines from Asia, Europe and Oceania, that is done with core competence as the indicator reveals a picture of inconsistencies in the core competence strategy of certain airlines and the corresponding reduction in business performance. The performance variations are explained from a service oriented core competence strategy employed by airlines that ultimately enables them in having a flexible business model that not only increases business performance but also helps in reducing the uncertainties in the internal and external operating environments.