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Pure versus hybrid competitive strategies in the airport industry

Tavalaei, M. Mahdi and Santalo, Juan (2019) Pure versus hybrid competitive strategies in the airport industry Transportation Research Part A: Policy and Practice, 124. pp. 444-455.

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Abstract

The advent of low-cost carriers has dramatically changed the competitive landscape of the airport industry and diminished the monopoly power that airports once enjoyed. Today, major airports compete directly with periphery airports, which are becoming the apparent choice of low-cost carriers. In fact, contracting with low-cost airlines has become a determinant factor in airport strategies, and airports now face a strategic decision to position themselves towards either low-cost or full-service (legacy) airline, or both. This paper examines the impact of these competitive strategies on airport financial performance. Building on the strategic purity premise, we hypothesise that being either a low-cost-oriented or legacy-oriented airport (pursuing a pure strategy) is associated with superior financial performance, in comparison with combining the two (a hybrid strategy). Moreover, the benefit of pure strategies increases with the intensity of competition among nearby airports. The paper supports these hypotheses with findings drawn from the U.S. airport industry.

Item Type: Article
Divisions : Faculty of Arts and Social Sciences > Surrey Business School
Authors :
NameEmailORCID
Tavalaei, M. Mahdim.tavalaei@surrey.ac.uk
Santalo, Juanj.santalo@surrey.ac.uk
Date : June 2019
DOI : 10.1016/j.tra.2019.04.015
Copyright Disclaimer : © 2019. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Uncontrolled Keywords : Airport competition; Competitive strategies; Pure strategies; Low-cost carriers; Full-service carriers
Depositing User : Clive Harris
Date Deposited : 16 May 2019 14:20
Last Modified : 17 May 2019 07:08
URI: http://epubs.surrey.ac.uk/id/eprint/851846

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