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  • A Network-Design Analysis of Airline Business Model Adaptation in the Face of Competition and Consolidation

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    de Oliveira462284-Accepted.pdf (1.022Mb)
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    Accepted Manuscript (AM)
    Author(s)
    de Oliveira, Renan P
    Oliveira, Alessandro VM
    Lohmann, Gui
    Griffith University Author(s)
    Lohmann, Gui M.
    de Oliveira, Renan P.
    Year published
    2021
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    Abstract
    By focusing on the intrinsic relationship between business models and network configurations in the airline industry, this paper develops a two-stage methodology to estimate the strategic drivers of network design of the major carriers in Brazil. The empirical approach decomposes their domestic network-building rationales into the ones adopted by virtual archetypical carriers. We consider the previously conceived low-cost, full-service, and regional carrier archetypes. Our main contribution is the development of a model that allows airlines’ networks to be strategically designed in a time-evolving pattern, reflecting a ...
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    By focusing on the intrinsic relationship between business models and network configurations in the airline industry, this paper develops a two-stage methodology to estimate the strategic drivers of network design of the major carriers in Brazil. The empirical approach decomposes their domestic network-building rationales into the ones adopted by virtual archetypical carriers. We consider the previously conceived low-cost, full-service, and regional carrier archetypes. Our main contribution is the development of a model that allows airlines’ networks to be strategically designed in a time-evolving pattern, reflecting a dynamically chosen blend of these archetypes. Moreover, we also consider the effects that mergers and acquisitions may have had in inducing changes in these blends. Our results suggest that all analyzed airlines have repositioned themselves through their trajectories to adopt a hybrid configuration, aiming at the intersection of at least two archetypical network-design rationales. Besides, the effects of consolidations point to certain diversions of the acquiring airlines’ domestic network-building rationales toward the ones of the acquired carriers, providing evidence that the consolidations may have served as stepping stones for market-repositioning moves.
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    Journal Title
    Transportation Science
    DOI
    https://doi.org/10.1287/trsc.2020.1025
    Copyright Statement
    © 2021 INFORMS. This is the author-manuscript version of this paper. Reproduced in accordance with the copyright policy of the publisher. Please refer to the journal website for access to the definitive, published version.
    Note
    This publication has been entered in Griffith Research Online as an advanced online version.
    Subject
    Applied Mathematics
    Transportation and Freight Services
    Publication URI
    http://hdl.handle.net/10072/403299
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    • Journal articles

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