In what ways can an airline company improve its core values to differentiate from its low-cost competitor?

Abstract

This research takes an internal marketing approach, relating various points of view to obtain greater understanding of the airline industry, its evolution, revolution and challenges imposed to the traditional airlines. The aim of this research is to explain the root difficulties that traditional airlines encounter to improve their core values in order to differentiate from their low-cost rivals. The research model revolves around three variables: core values and organizational culture, differentiation and leadership styles. The conceptual model involves face-to-face interviews with airline experts, constituting primary data, to confront literatures to the practice. Traditional airlines are expected to have a less complete organizational culture, which combined with their transactional leadership style, reduce their ability to differentiate and compete against low-cost airlines. Findings reveals that compared to low-cost airlines, traditional airlines’ mission statements are less comprehensive, suggesting a less unified organizational culture. The cause is found to be due to traditional airlines’long establishment and inertia, which reduce their attitudes and abilities to adapt to changes and hence differentiate. This relative lack of organizational culture, the business model nature of traditional airlines and their transactional leadership style result in struggles to find ways to differentiate and respond to the fast degree of adaptation proposed by low-cost airlines. To survive in the aviation industry, where the rules of the game are now being set by low-cost airlines, the traditional airlines must undergo profound changes. The conceptual model provides a coherent picture of the interplaying role of the variables while supporting and confirming hypotheses through literature review and the use of face-to-face interviews with experts.