خطوط هوایی در درون خطوط هوایی : بررسی آسیب پذیری مدل های کسب و کار مختلط

In this paper we examine two questions; what is it that makes some cases of airlines within airlines apparently successful while in many other cases it is just the opposite? And second, why would a carrier attempt such a strategy, is there a common set of circumstances or is each case unique? In the US, Canada and Europe a number of legacy carriers have sought to respond to LCC entry by creating an LCC within the legacy carriers; most have failed but some have succeeded, most notably in Australia and Germany. We first examine the evolution of the LCC business model and illustrate the different forms it takes today. Following this we provide a discussion of the underlying sources of cost advantage of the LCC and assess which sources are sustainable in the longer term. Finally we examine the conditions under which these apparent successes have occurred and look for common threads. We find market dominance, judicious network planning and co-ordination are necessary conditions for success.

In June 2008 United Airlines made the decision to shut down ‘Ted’ the airline within an airline it had started in an attempt to compete with the LCC sector in the US; Ted mainly served such tourist destinations as Las Vegas and Cancun, and lots of points in Florida, and was aimed at stopping Southwest in those markets. This venture followed the ill-fated Shuttle by United airline within an airline that was started in hopes of staving off Southwest's entry into the California market. Ted was the last of the US carriers to abandon this business model; others that had been discarded in the US included Shuttle by United, CALite (Continental), Metrojet (US Airways), Delta Express (Delta), Song (Delta). All had been put in place to compete with the low cost carrier business model (LCC) – Southwest, JetBlue and AirTran in most cases in specific markets. In Canada, Air Canada finally abandon Zip, an attempt to compete with Westjet in the latter's primary western Canadian markets. This after having previously had a try with Tango, which was more of a fighting brand designed to focus primarily on one carrier, Canada 3000. Although best known in the airline industry as ‘a firm within a firm’ strategy, there are other industries, not many, that have also tried (unsuccessfully) to use this strategy generally targeted at a specific product or geographic market. A good example is the Saturn by GM which was and is a car company within a car company. The motivation for GM was to produce a car that could compete with foreign imports while GM would continue competing with other North American producers particularly in the North American market. Neither Saturn, nor GM for that matter, has been a success story with continual erosion of market share and spiralling losses. There are numerous examples in North America that the airline within an airline business model does not work and a few examples in Europe but many fewer; an example is Hapag Lloyd Express, an LCC which despite appearing successful was folded back into the mother airline. But we also see apparent successes of the firm within firm approach such as Jetstar with Qantas and Tiger with Singapore and German Wings with Lufthansa. In this paper we explore two questions. What is it that makes these cases apparently successful while in many others it was just the opposite? And second, why would a carrier attempt such a strategy, is there a common set of circumstances or is each case unique? In the following section we describe those factors that led to the adoption of the airline within an airline strategy. We include changes in the regulatory structure as well as the development of new technologies such as the Internet. Section 3 looks at the history of the low cost carrier and describes how the business model differs from legacy carriers; where the cost advantages lie. In Section 4 we ask why a firm (airline) would pursue a strategy of a firm within a firm; why can hotels seemingly pursue this strategy successfully while others cannot. Finally in Section 5 we explore what the future might look like and the potential successes of Tiger, Jetstar and German Wings. We also provide a summary and conclusions in this section.

Firms within firms arise because management wishes to focus resources on a specific competitor or geographic market. The target has to be clearly identifiable and the primary firm must have a clear competitive advantage, otherwise the secondary (firm within the firm) will not be a successful strategy. In the airline business the fighting brand and focused firm is a dying strategy mostly because the LCC business model and legacy business model have moved from one of vertical17 differentiation to one of horizontal18 differentiation. Some consumers prefer to fly an LCC for various reasons, mainly their price elasticity, but also schedule, reliability, on-time performance, etc. One of the shifts has been the increased use of LCCs by business travellers. Traditionally, those business class travellers have been a major business source for FSCs, however a study by Mason (2000) revealed and gauged the propensity of business travellers to use short haul, low cost carriers for trips. Company size influences the price elasticity of business passengers and on the value placed on those purchase factors. Small and medium businesses are more likely to use LCCs (Mason, 2000). Where we have seen greater use of firms within firms such as with Qantas, Singapore, Cathay Pacific and Lufthansa, they have been used for differing purposes. Cathay and Singapore have used their secondary firms to meet some competition but more so to enter markets. Lufthansa and Qantas developed their secondary carriers, German Wings and Jetstar respectively, to meet LCC competition. They have been successful not in eliminating competitors but at holding their market share to about 30%. Both carriers have been disciplined in using their secondary carriers to avoid cannibalizing their primary product and to not create brand confusion, something which many others have been guilty of. All four carriers have a sustainable, at least for the moment for Lufthansa, competitive advantage because of their domestic market dominance and the implicit protection by their respective governments. In the present economic climate of mid-2008 and with oil prices unlikely to go below $100 again, there will be some rationalization in the industry. Some are calling for massive consolidation, Jeff Dixon of Qantas, for example, but it is not clear how any efficiencies are to be had by such a strategy; where do the cost savings lie? Yet a number of carriers most notably in the US are in desperate financial shape, have very weak fuel hedging strategies (except Southwest) and have a domestic economy which is near recession. In the near term fewer carriers, but in the mid to longer term technology, will provide some relief. It is unlikely that firms within firms will be a popular or successful strategy in the future as we will see greater alliance competition; the LCCs are and will remain more cost efficient but not by the margins they enjoyed in the past and greater liberalization of international bilaterals through more open skies agreements, changing conditions on foreign ownership restrictions and having broader use of rights of establishment all make the firm within a firm strategy non-workable.