Assessing the strategic evolution of U.S. low cost airlines in the post-9/11 environment

Abstract

It has been suggested in the literature that low-cost airlines have, in varying degrees, departed from the original low-cost model introduced by Southwest Airlines. This study provides a multi-year analysis in the post-9/11 time period, for the years 2004-2009, of the demonstrated strategic positioning choices of U. S. low-cost airlines. The sample utilized is restricted to U. S. low-cost carriers so as not to conflate operating environments. Furthermore, a quantitative methodology is employed to measure effectively these choices and to facilitate inter-airline comparisons. Airlines, as part of their strategic planning process, articulate positions with regard to cost leadership, product differentiation, and growth. Decisions implemented are dynamic and inter-temporal in nature. Managers thus need a multi-period methodology to evaluate the implementation of strategic positions. One such approach is the strategic analysis of operating income utilized in this study.

Competitive Differentiation Strategy of Cebu Pacific Air Towards Passenger Loyalty

“…This is because position in the market, such as differentiation and low cost, requires mutually exclusive activity and resource allocation. Scheraga and Caster (2012), said that due to the dynamic and evolutionary nature of competition, business strategies are constantly changing. Porter's warning about the hazards or vulnerabilities of the cost leadership strategy serves as an illustration of this idea.…”