01550084

Component

https://doi.org/10.3141/2501-08

Asia Pacific is increasingly at the forefront of world aviation, and low-cost carriers (LCCs) there now have 26% of all seats. This amount rises to 57% in Southeast Asia and 56% in South Asia. Clearly, Asian network airlines are very exposed to LCCs, and there are many consequences, such as lower financial performance from inadequately meeting the expectations of customers, offering insufficient value for money, and customer dissatisfaction. It is crucial that Asian network airlines respond expeditiously and appropriately to LCCs. This paper looks at the strategic capability of 22 Asian network airlines in competing with LCCs on the basis of analyzing questionnaire data from these airlines with respect to the level of importance and difficulty of 37 competitive responses across six response categories. Fundamentally, this paper concerns only their capability in competing with LCCs and does not consider their overall strength. This paper also identifies the importance and difficulty of all 37 responses and how the response categories vary by airline, while linking strategic capability with profit margins. The results show that strategic capability varies widely, with Vietnam Airlines possessing the strongest strategic capability and SilkAir, the weakest. Of airlines that compete heavily with LCCs, Garuda Indonesia has strong capability, while Thai Airways and Philippine Airlines do not. For all 22 Asian network airlines, quickly introducing changes, leveraging brand strength, and increasing aircraft use are the most important responses, and there is a reasonably strong correlation between strategic capability and margin, suggesting that those airlines with strong capabilities should achieve higher margins.

01582755

15-1570

English

pp 56–65

2015

Transportation Research Record: Journal of the Transportation Research Board

9780309369190

Print

Figures (4) ; References (35) ; Tables (3)

Airlines; Competition; Customer satisfaction; Low cost carriers; Strategic planning

Garuda Indonesia; Malaysia Airlines; Philippine Airlines; SilkAir; Vietnam Airlines

Airline performance; Value for money

Northeast Asia; Southeast Asia

Administration and Management; Aviation; Planning and Forecasting; I72: Traffic and Transport Planning

TRIS, TRB, ATRI

Dec 30 2014 12:35PM

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