Air-travel services industry in the post-COVID-19: the GPS (Guard-Potentiate-Shape) model for crisis navigation

Abstract

Purpose

Extant crisis response literature focuses on the survival and adaptation efforts of organizations, leaving the opportunity of deploying more proactive market-shaping strategies unexplored. This paper aims to examine the early strategic responses deployed by air-travel services players for navigating through the COVID-19 pandemic.

Design/methodology/approach

Drawing on a qualitative case study and grounded theory methods, this research analyzes how DUBZ – a purposefully selected company operating in the air-travel services sector in the emirate of Dubai (UAE) – responded to the coronavirus disruption.

Findings

Using this unique case as a basis for grounded theorizing, a framework was developed for understanding how air-travel service providers can effectively navigate through the crisis – the guard-potentiate-shape model. The advanced model suggests that in times of disruption, industry players should adopt several strategies to: guard against failure; potentiate innovative change; and shape the future design of air-travel services. An outcome of forward-looking shaping strategies that may define the new post-pandemic normal in the air-travel services sector constitutes the idea of “scattered/diffused airports” with a modified design of airport services architecture.

Originality/value

The insights from the grounded theoretical framework contribute to both the empirical research on crisis management and the nascent literature on market-shaping strategies. Air-travel services organizations may learn how to increase their resilience and build new industry normalcy in the post-disruption period.

迈向后COVID-19时代航空旅游服务行业的常态：用于危机导航的GPS（超前部署）模型

目的

先前的危机应对研究集中于组织的生存和适应性工作, 留下开发出部署更积极的市场塑造策略尚未探索的机会。本文的目的是研究空中旅游服务公司为应对COVID-19大流行而采取的早期战略应对措施。

设计/方法/诉求

利用定性的案例研究方法, 本研究分析了在迪拜酋长国（UAE）的航空旅游服务行业中特定的公司如何应对冠状病毒的破坏。

发现

使用这个独特的案例作为理论基础, 开发了一个扎根的理论框架, 用于理解航空旅行服务业者如何有效地渡过危机-GPS（超前部署）模型。先进的模型表明, 在混乱时期, 业者应采取多种策略, 以（1）预防失败, （2）加强创新变革以及（3）塑造航空旅游服务的未来设计。前瞻性塑造策略的结果可能定义了航空旅游服务领域后疫情时代的新常态, 构成了“零散的机场”的概念, 并修改了机场服务体系结构的设计。

创意/价值

来自先进框架的见解有助于进行危机管理的实证研究以及有关战略市场塑造的新兴文献。更广泛地讲, 航空旅行服务组织可能会学习如何在灾后时期提高抵御力并建立新的行业常态。

La industria de los servicios de viajes aéreos posterior al COVID-19: El modelo GPS (Proteger-Potenciar-Modelar) para la navegación en situaciones de crisis

Propósito

La investigación previa de respuesta a crisis se ha centrado en los esfuerzos de supervivencia y adaptación de las organizaciones, dejando sin explorar la oportunidad de implementar estrategias más proactivas para modelar el mercado. Este documento tiene como objetivo examinar las primeras respuestas estratégicas desplegadas por los actores de los servicios de viajes aéreos para navegar a través de la pandemia de COVID-19.

Diseño/metodología/enfoque

Basándose en una metodología de estudio de caso cualitativo, esta investigación analiza cómo una empresa seleccionada a propósito, que opera en el sector de servicios de viajes aéreos en el emirato de Dubai (EAU), respondió a la disrupción del coronavirus.

Resultados

Utilizando este caso único como base para la teorización, se desarrolló un marco teórico fundamentado para comprender cómo los proveedores de servicios de viajes aéreos pueden navegar eficazmente a través de una crisis: el modelo GPS (Proteger-Potenciar-Modelar). El modelo avanzado sugiere que, en tiempos de disrupción, los actores de la industria deben adoptar una serie de estrategias para (1) protegerse contra fallas, (2) potenciar un cambio innovador y (3) modelar el diseño futuro de los servicios de viajes aéreos. Un resultado de las estrategias de formación prospectivas que pueden definir la nueva normalidad pos-pandémica en el sector de los servicios de viajes aéreos constituye la idea de "aeropuertos dispersos" con un diseño modificado de la arquitectura de los servicios aeroportuarios.

Originalidad/valor

Los conocimientos del marco avanzado contribuyen tanto a la investigación empírica sobre la gestión de crisis como a la literatura incipiente sobre la modelación estratégica del mercado. En términos más generales, las organizaciones de servicios de viajes aéreos pueden aprender cómo aumentar su resiliencia y construir una nueva normalidad en la industria en el período posterior a la disrupción.

Citation

Bodolica, V., Spraggon, M. and Khaddage-Soboh, N. (2021), "Air-travel services industry in the post-COVID-19: the GPS (Guard-Potentiate-Shape) model for crisis navigation", Tourism Review, Vol. 76 No. 4, pp. 942-961. https://doi.org/10.1108/TR-12-2020-0603

Introduction

The sudden outbreak of the COVID-19 pandemic caught business leaders and government officials off guard (Foss, 2020). The uncontrollable spread of the novel coronavirus urged most countries across the globe to enforce drastic lockdown regimens. Many states’ responses materialized through physical isolation, economic standstill and sociocultural hibernation that challenged our rights to access, consume and participate in public life domains (Abraham et al., 2020). While the world was hit by an unprecedented health crisis, the devastating magnitude of its consequences was hard to imagine and quantify. Among the most severely affected were the nonessential sectors such as airlines, travel and tourism-related services (Krishnan et al., 2020; Godovykh et al., 2021).

According to the World Tourism Organization, the 2020 international passenger traffic experienced a dramatic decline of 74%, falling below the volumes registered in the aftermath of prior crises that disrupted this millennium (UNWTO, 2021). The International Air Transport Association also forecasted that the year would conclude with the biggest in aviation history net loss of US$84.3bn for global airlines (IATA, 2021; Kamel, 2020). To help operators that incurred billions in revenue losses survive, amid job cuts and bankruptcy rumors, massive recovery funds were deployed by authorities worldwide (Gössling, 2020).

This study examines the crisis-response strategies deployed by air-travel service providers in the United Arab Emirates (UAE) to navigate through the COVID-19 disruption. This line of inquiry is important because the recovery prospects for some segments seem pessimistic. Analysts estimate that business travel would continue to be substituted by technology and may never return to pre-pandemic levels. Blunk et al. (2006) demonstrate that the US domestic air travel did not return to the pre-9/11-attacks level. The revival of international air travel in the UAE may occur quicker because 90% of its social fabric includes a culturally diverse expatriate population, whose family-related travel needs are more indispensable than elsewhere (Spraggon and Bodolica, 2014).

Prior crisis response studies focused primarily on firm survival and adaptation efforts (Novelli et al., 2018; Rapaccini et al., 2020) that could materialize through service innovation (Chesbrough, 2020; Dahles and Susilowati, 2015). A budding research stream argues that smart organizations are capable of engaging in forward-looking action to vigorously influence their industry’s development into a preferred direction (Gavetti et al., 2017; Patvardhan and Ramachandran, 2020). They can orchestrate collective market work (Baker and Nenonen, 2020) to change taken-for-granted assumptions, transform prevailing practices and shape the underlying rules in their ecosystem of closely interrelated businesses and sectors (Jacobides, 2019). Yet, the adoption of market-shaping strategies remains unexplored in empirical travel-and-tourism settings in the ongoing COVID-19 crisis context (Nenonen and Storbacka, 2020). Little is known about the actions deployed by UAE-based air-travel players to manage through and recover from the abysmal effects of this global health disruption. This research seeks to bridge these gaps in the literature.

Drawing on a qualitative case study and grounded theory methods (Bodolica and Spraggon, 2020), this paper analyzes how DUBZ – an air-travel services company operating in Dubai – responded to the coronavirus outburst. Using this unique case as a basis for grounded theorizing, a framework is developed for understanding how air-travel providers can effectively navigate through the crisis – the guard-potentiate-shape (GPS) model. This model suggests that in face of adversity, organizations should adopt several strategies to: guard against failure; potentiate innovative change; and shape the future of air travel. An outcome of forward-looking shaping strategies that may define the post-pandemic normal in the air-travel industry constitutes the idea of “scattered/diffused airports” with a modified airport architecture.

Crisis management theories

A diversified crisis management literature has developed in strategy and organization studies fields. Among frequently explored topics are the organizational preparation for crisis events, alleviation of their damaging consequences for the affected stakeholders and learning from past experiences to improve the response in future disruptions (Bundy et al., 2017). Most studies are concerned with the elaboration of tools to capture strategies and actions that should be deployed before, during and after the crisis to protect, revitalize and sustain the business. Rapaccini et al.’s (2020) four-step COVID-19 crisis management model (calamity, quick/dirty, restart, adapt) was designed to help market players be better positioned after the pandemic.

Survival and resilience represent the key objectives pursued by decision-makers in extreme situations. The literature demonstrates that these objectives are achieved by continuous efforts of organizational adaptation. Bodolica et al. (2018) show how, through many strategic alterations, Emaar Properties, the largest real-estate developer in Dubai, mitigated the negative effect of environmental jolts on firm performance. Adaptation may occur via strategic improvisation (Hughes et al., 2020) and entrepreneurial action or open innovation (Chesbrough, 2020) to secure post-crisis recovery. Yet, none of these crisis frameworks are concerned with the understanding of strategic implications of unanticipated radical disturbances for a set of interacting entities such as industries and ecosystems (Foss, 2020).

An emerging stream of strategy research views markets and industries not as prescribed deterministic contexts, but as malleable adaptive systems that result from actors’ agentic efforts (Gavetti et al., 2017). This implies that organizations can deliberately engage in forward-looking action to actively influence the outlook of their industry in some desired fashion. The deployment of market-shaping strategies was examined in exploratory case study settings to demonstrate the ability of firms to nudge the evolution of their business landscapes into a preferred direction (Patvardhan and Ramachandran, 2020). Even small companies are able to delineate their future environment by orchestrating collective market work to challenge taken-for-granted assumptions and shape the underlying rules and expectations in their industry (Baker and Nenonen, 2020). The strategic intentionality of actors to collaboratively modify the prevailing practices in their market is opportune in the age of connectivity and ever-increasing interdependence of firms, industries and markets that describe today’s ecosystem economy (Jacobides, 2019).

Given the nascent nature of shaping-oriented strategy-making (Baker and Nenonen, 2020), it did not receive sufficient consideration in the crisis/disaster management context. Opening their conceptual piece with the quote never waste a good crisis, Nenonen and Storbacka (2020) argue that businesses should use disruptions and shocks as opportunities for leading change and creating new equilibriums in their environment. Instead of solely boosting their resilience and adaptability, companies could alter their operating systems and drive the future development of their focal industry. Yet, the empirical evidence on market-shaping initiatives deployed by air-travel organizations during the ongoing COVID-19 crisis is lacking.

Air-travel and tourism crisis research

At the turn of the millennium, the global travel-and-tourism industry was hit by many uncontrollable events such as the 2001 9/11 terrorist attacks, 2003 SARS outbreak, 2008 global credit crunch, 2009 swine flu pandemic, 2012 MERS eruption and 2014 Ebola epidemic. The rising incidence of exogenous shocks was accompanied by a surge in tourism crisis research, given the widely-documented industry vulnerability to socio-economic catastrophes (Ketter, 2016; Yeh, 2020) and the ensuing spillover effects into various activity sectors (Novelli et al., 2018). Jiang et al. (2019) identify three lines of inquiry, including the categorization of crises into typologies, the identification of effective crisis response strategies and the development of crisis management frameworks (Ritchie, 2004; Tse et al., 2006). The authors note that the literature remains fragmented with a recent emphasis on risk perception and resilience topics.

Most crisis response research stresses the role of government preparedness in helping businesses weather the disruption storm (Yeh, 2020). Analyzing swine flu’s impact on Mexico’s tourism, Russy and Smith (2013) argue that countries need to anticipate health crises and allocate emergency funding to severely affected sectors. Revealing the destructive effect of Ebola on African tourism, Maphanga and Henama (2019) underscore the importance of building contagious-disease early warning systems that allow proactive public health interventions, while Novelli et al. (2018) offer a framework of crisis prevention and planning, crisis response and recovery and resolution, evaluation and future learning.

Airlines have a long history of relying on state-sponsored aid for survival (Hatty and Hollmeier, 2003), along with adopting capacity reduction strategies (Sobieralski, 2020). What comes after the air-travel industry recession is the recovery-focused business model alteration by reshuffling operations to achieve cost optimization and improved efficacy (Franke and John, 2011; Tan, 2016). Crisis response management is a complex task that necessitates skills development to understand the new reality, adapt to change and focus on emerging priorities to enhance the recovery effectiveness (Scott et al., 2008).

Yet, none of the prior health crises came close to the virulence of socio-economic devastation generated by the coronavirus pandemic (Li et al., 2021), also referred to as an “economic super-shock” that “disrupted the disruptor” (Dolnicar and Zare, 2020). Air-travel practitioners realize that prior risk mitigation strategies are ill-fitted to the unprecedented circumstances generated by the COVID-19 outburst (Garrow and Lurkin, 2021). Public opinion-makers argue against a business-as-usual post-pandemic return, urging reconsideration of the current make-up and development trajectory of the global travel system (UN, 2020). Calls are made to approach this crisis as an opportunity to lead the industry transformation to make it less vulnerable to disruptions and more sustainable (Gössling, 2020).

Recently, several articles have been published to conceptualize the impact of COVID-19 on the air-travel sector (Sobieralski, 2020; Wen et al., 2021). Garrow and Lurkin (2021) show that airline executives call for flexible and speedier decision-making that views the crisis as a change catalyst. Gössling (2020) argues for a long-term reduction in aviation overcapacity, while Lohmann and Pereira (2020) emphasize air-transport innovations leveraging big data and smart technologies (Buhalis, 2020). As at the time of this writing the coronavirus was still ravaging the world, the empirical evidence on this context was scarce. This research contributes to the burgeoning literature on the initiatives undertaken by air-travel providers to reemerge from this super-shock, transform the industry and construct the new normal.

Methods

Consistent with best practice recommendations for qualitative paper writers, the methodology section begins with an explanation of the distinctive nature of the research context we examined (Pratt, 2009). To justify the context from a sampling standpoint, the studied firm is introduced as an atypical case in the industry, which made it ideal for theorizing on crisis response management. A detailed discussion of the deployed strategies to collect and analyze qualitative data is provided.

Research context

The year 2020 was expected to culminate in a plethora of achievements and accolades for the extravagant, futuristic and boundaries-pushing emirate of Dubai. It planned to open the Museum of the Future, an architectural marvel with challenging frames and three-dimensional-modeling designs that were never attempted before. Other construction projects were due for completion as the emirate was readying to host the World Expo from October 2020 to April 2021 (Bodolica et al., 2018). Emirates, named as Expo 2020’s official airline, was planning to bring visitors and investors from across the globe through its extensive route network in over 84 countries. As the world’s largest long-haul airline, government-owned Emirates has played a significant role in transforming Dubai into a tourism hub (Bodolica et al., 2020; Chen et al., 2020). Dubai’s inclusion in the prestigious list of top 10 cities in the world to visit in 2020 by Lonely Planet, was expected to enhance its attractiveness in the eyes of international tourists.

Yet, those plans were severely disrupted by the coronavirus outbreak. Local authorities conducted a three-month disinfection program, imposing restrictions that confined residents to their homes. The enforced lockdown resulted in non-essential business closures and suspensions of commercial flights, tourism and air travel. To shield the UAE’s ecosystem from the COVID-19 consequences, many incentives were approved, including the automatic extension of employment visas, simplified work procedures, abolition of rental contracts’ fines, flexible payment terms on financial obligations, reduction in municipality sales’ fees and freezing of fees on permits’ issuance (Entrepreneur ME, 2020). Despite the Dubai government’s commitment to providing financial support, Emirates was unable to sustain excess resources and announced several layoffs to cope with non-existent air-travel demand (Kamel, 2020).

On June 25, 2020, the UAE national sterilization program was ended and night-time stay-home orders were lifted. On that date, there were 11,090 active coronavirus cases in the country, bringing the total count to 35,165 recoveries and 308 deaths (Duncan, 2020). Safety measures and nationwide restrictions still applied such as the use of face masks in public places, two-meter social distancing, regular body temperature checks, prohibition of social gatherings and events and continued closure of universities and schools. Malls and restaurants operated at 60% capacity with strict adherence to public health and sanitation rules. On July 7, 2020, Dubai reopened its borders to foreign tourists and allowed the airlines to gradually reinstate their international flights. Having designed a “safety-first customer journey,” Emirates announced the global coverage for COVID-19-related medical expenses of its passengers and a return to 50% of its pre-pandemic destination network by the end of 2020 (Gulf News, 2020). Business operations were also resumed by other Dubai players of the air-travel services industry, including DUBZ. In early 2021, air travel was still not fully restored due to the evolving COVID-19 situation worldwide.

Case background

DUBZ (a mnemonic for “delivering your bags”) was launched in 2016 by three Dubai-based entrepreneurs who decided to forgo their high-flying careers in engineering/consulting to pursue an innovative idea of enhancing passengers’ air travel experience. The technology venture started by offering baggage handling services, including belt pick-up, collection from home/hotel, secure same-day storage and delivery, to travelers transiting through Dubai international airports. The team won startup funding from Intelak – the incubator program dedicated to building a sustainable ecosystem of aviation, travel and tourism organizations in the UAE. DUBZ baggage solutions draw on the most advanced technologies such as CCTV monitoring, live tracking facility, secure sealing and wrapping, baggage insurance coverage and electronic locks. The distinguishing features of its business strategy include the “maximized efficiency of [company] logistics, experimental customer acquisition process, fully digitized sales and customer service processes and plug-and-play model with airport operations” (Entrepreneur ME, 2018).

The early success of DUBZ in signing commercial agreements with airlines spurred the interest of dnata (Dubai National Air Transport Association) – one of the world’s largest air services providers with ground handling, cargo, travel and flight catering operations in over 130 airports. In 2018, dnata acquired a majority stake in the company, following which its official name changed to “DUBZ powered by dnata.” The same year, DUBZ launched a full home check-in service permitting passengers to have their baggage checked in on the spot and, with boarding passes received in advance, to skip check-in counters at the airport by proceeding straight to immigration. Drawing on the popularity of remote check-in services, in 2019 DUBZ opened a terminal and began operating at Dubai Mall, which is the most visited tourist attraction in the UAE. By the beginning of 2020, the company expanded its network of partner airlines and started contemplating international expansion. Yet, on March 19, 2020, DUBZ was forced to interrupt its activities following the closure of Dubai’s air borders. In 2021, apart from the three co-founders, there were five full-time employees at DUBZ, with around 20–30 third-party staff being contracted exclusively based on demand.

Data analysis

To answer the research question about how players of Dubai’s air-services industry navigated the COVID-19 crisis, a qualitative research strategy and case study methodology were adopted. Such a strategy allows examining behaviors, experiences and situations within their actual context of occurrence and generating a more nuanced understanding of the reality as it emerges from the field (Spraggon and Bodolica, 2008; 2020). Considering the distinctive and rare nature of the phenomenon under investigation, a single-firm study design was chosen (Chan and Hawkins, 2010; Patvardhan and Ramachandran, 2020). Buchanan and Denyer (2013) argue that unconventional, deeply embedded and highly-contextualized methodological approaches are particularly relevant when analyzing events that are sudden, inconceivable, destructive, complex and unique. Compelling arguments are offered in support of single case studies for the development of generalizable theory in the context of ongoing crisis research.

In light of its idiosyncratic features, DUBZ was purposefully selected as the research site (Yin, 2009). To accurately reconstruct the sequence of the firm’s actions, multiple sources were used to gather different types of rich qualitative data (Bodolica et al., 2015). Semi-structured interviews were conducted to generate invaluable insights from the people who had first-hand exposure to the analyzed event and could share their perspectives and opinions about DUBZ’s experiences during the pandemic. Consistent with prior case study research, the information posted on the corporate website, company-related press releases, promotional videos and available documentation and reports were accessed and analyzed (Dacin et al., 2010). Of particular interest were the two White Papers titled “Airport of the Future” and “The Journey has Started” that was written by DUBZ in April 2020 and June 2020, respectively. To better grasp the emergent reality from the study of this extremely disruptive event, non-conventional sources of data (e.g. media posts, internet information and the popular press) were not dismissed (Buchanan and Denyer, 2013). The air-travel industry updates that were published regularly by major newspapers in the country, including Gulf News, Khaleej Times and The National, were also followed.

The research team was familiar with DUBZ, having used their services as customers prior to the coronavirus outbreak. Initially, in-depth interviews were conducted with each of the three co-founders (30–35 years old males) to gain a fine-grained understanding of the startup’s genesis, its original business model, long-term vision and future development prospects. Interviews lasted 60–90 min and were performed in two rounds to validate preliminary data, check their accuracy and seek an additional explanation when needed. Subsequently, DUBZ managers were interviewed again at the end of the lockdown period to obtain their perspectives regarding the crisis, its impact on the industry and their actions during this time of disruption. Additionally, we interviewed the five full-time employees at DUBZ (2 women and 3 men, 25–35 years old) to get their opinions and draw on multiple perspectives. All interview transcripts were read carefully by the members of the research team and issues that needed further clarification were sent as follow-up questions via email or WhatsApp messages. When answers were received in the form of voice recordings, these were transcribed verbatim and added to the previously gathered interview data.

The qualitative research software NVivo-10 was helpful in the process of content-analyzing the raw data. This involved selecting all relevant text files (e.g. interview transcripts, white papers, media articles) and categorizing the information on the basis of descriptors, phrases and terms that were used by informants. A meticulous coding procedure allows structuring data into prevalent conceptual patterns and examining sequential relationships among them to uncover emergent meanings (Yin, 2009). Raw data were progressively condensed by identifying specific lower-level codes and linking them to more abstract higher-level concepts. The analytical procedure started by assigning codes to different text passages, trying to retain the original language from the source and refining them when needed to produce a set of first-order categories (14 in total). By looking for links among categories, these could be collapsed into seven second-order themes representing theoretically distinct clusters. The conceptual relatedness among these themes was examined to organize them into three aggregate theoretical dimensions that constituted the essence of grounded theorizing (Corbin and Strauss, 2008).

The research team engaged in data gathering, analysis and theory building in tandem, moving iteratively between various steps and codes and using emergent insights to guide subsequent research efforts (Eisenhardt and Graebner, 2007). To ensure the trustworthiness of the data and confidence in the findings, two highly recommended triangulation techniques were deployed (Yin, 2009). First, using multiple sources permitted data triangulation for the purpose of checking convergence of analytic outcomes that stemmed from various primary and secondary sources of data (Bodolica et al., 2015). Second, investigator triangulation was possible by having each member of the multi-researcher team work independently on the assignment of codes to categories as a pre-condition for further theoretical development (Dacin et al., 2010). Researchers’ coding was assessed individually, whereas the observed discrepancies were discussed in several follow-up meetings and the data categorization was modified until agreement was reached. To further validate study findings, the initial draft of this case analysis and subsequently the entire article was shared with the interviewees to solicit feedback and obtain their confirmation.

Figure 1 depicts the categories, themes and dimensions that underlie the grounded model of COVID-19 crisis response at DUBZ. Additional evidence in support of case findings is provided in Table 1, which includes representative quotes from various data sources.

Findings

The analysis indicates that DUBZ’s response for navigating through the pandemic falls within several strategies: guarding against failure; potentiating innovative change and shaping the future of air travel.

Guarding against failure

The ability to design a “swift and agile response” to the crisis surfaced as a critical factor in securing survival when air travel stopped. DUBZ team decided to quickly “adopt cost reduction strategies” to battle the decline in passenger numbers caused by the official travel bans. Responses included halting operations to save on car-related expenses, logistics and mobilization, discharging the partners’ fleet early and reducing salaries gradually to avoid furloughing employees. The company succeeded to “seize the lean startup advantages” by owning only a small car fleet and relying mostly on flexible agreements with logistic partners in Dubai. The management underscored that the preservation of these capability endowments at the startup foundation served as a safety cushion during challenging times. “Our business was built to be lean and agile for a great speed of response. We could cut down 50% of our costs almost overnight” (Interview #5).

On the positive side, DUBZ engaged in deploying “ephemeral impromptu solutions” to sustain the business when commercial flights were suspended and address the most pressing liquidity concerns. Placing a clear “focus on cash preservation needs,” decisions were made to reduce marketing activities to zero and keep technology expenses to a minimum to preserve the security of their platforms. The team was relentlessly on the outlook for any workable suggestion, even if used only once and beyond the boundaries of their business model, that could allow keeping their fleet running rather than depreciating. Aiming to “find alternate revenue streams,” DUBZ supported the growth of the e-commerce sector in Dubai during the lockdown by providing their fleet to “supermarkets, hospitals, clinics and companies like Amazon and Noon.com” to “make home deliveries” (Interview #6).

Potentiating innovative change

Built on the idea “to innovate and experiment in the market” (Entrepreneur ME, 2018), DUBZ used the lockdown period to reevaluate operations and orchestrate its business model transformation. The company decided to “upgrade the value proposition” with offerings that would pivot around the current health, sanitation and safety concerns of the public. All the efforts were geared toward the enhancement of the original “baggage-free, hassle-free travel” service by providing a “contactless, queueless, safe travel” experience to customers. It was critical to spread awareness that the improved offerings of their luggage-freedom business were compliant with health standards and designed to reduce the risk of contracting the coronavirus. The updated DUBZ Website (2020) started to welcome visitors with a reassuring message that the process “has been revised and improved, allowing for a contactless home check-in and allowing you to skip check-in lines and baggage drop queues at the airport.”

The team chose to “fine-tune the revenue model” by abandoning the “price-per-bag” model in favor of “price-per-service” charged to customers. Before the pandemic, DUBZ offered three products: home baggage check-in and boarding pass collection; baggage storage and delivery; and “land and leave” with baggage delivered directly to the destination. Yet, keeping the bag as the main value-creation driver did not resonate well with the enhanced post-pandemic firm offerings. These comprised many packages such as the “home check-in” service, “extra package” with baggage disinfection, “plus experience” with priority pass for airport fast-track for speedy immigration and “premium package” with COVID-19 medical testing at home (DUBZ Website, 2020). The emphasis “has now shifted toward providing a valuable travel experience” with service characteristics (e.g. comprehensiveness, complexity) being the major determinant of the fee charged to passengers (Interview #6).

DUBZ opted to “expand the customer reach” by converting from a “B2C only” to a “B2C and B2B” company. Envisioning “to bring the airport to passengers’ homes” (Interview #2), they began operations by targeting individuals and families interested in “save time by skipping baggage drop-off and check-in queues at the airport” (Entrepreneur ME, 2018). DUBZ designed a simple online booking system to cater to the need of these customers to complete travel procedures and receive boarding passes with baggage tags ahead of time. During the pandemic, the management sensed the opportunity of leveraging their expertise and reaching out to other businesses such as airlines, airports and tourism and travel authorities. The team now ambitions to play an advisory role in showcasing the potential of decentralized airport operations and accelerating the implementation of off-airport solutions in the Middle East and even globally. DUBZ is building a more sophisticated B2B website to offer “innovative off-airport solutions and advisory services shaping the future of post-COVID-19” and is “working with IATA to create an advisory board around off-airport processes to be recommended” after the pandemic (Interview #7).

Shaping the future of air-travel

DUBZ decided to embark on a larger-scale journey of influencing the future of air travel instead of merely enduring the consequences of the post-pandemic change. They started to “promote the new dominant design” in the industry, which could take the form of a “smart and decentralized Airport of the Future that would secure a safe, reliable and comfortable travel” (Interview #8). In the two white papers, they wrote on the subject, the management underscored the importance of a superior alternate that would allow avoiding air-travel suspension during pandemics and serve as a “gateway to a more resilient travel industry” (WP, 2020a). Thus, “off-airport can be part of a sustainable business transformation journey, rather than a COVID-specific initiative that will become obsolete once normalcy is restored” (WP, 2020b).

DUBZ’s solution is able to effectively “address systemic air-travel weaknesses” and mitigate the severity of crisis impact. Convinced that “the way the travel process is designed plays a key role in the vulnerability of the industry” (WP, 2020a), the firm saw the advantages of revolutionizing the experience of air travel if airport operations become fully decentralized. Instead of performing all travel-related procedures in a single location, these could be distributed throughout the city via multiple off-airport locations for an early screening of checked-in bags. To advocate a widespread adoption of the proposed model, DUBZ strives to “capitalize on the ‘new normal’ narratives” that are inscribed in the framework of measures being deployed to “create a safer travel environment from a health and hygiene perspective” (WP, 2020b). Decentralized airport hubs, remote/mobile check-in terminals and digital concierge were among the most compelling narratives that surfaced during interviews, as they draw on the latest advancements in passenger technologies and innovative trends in artificial intelligence, biometrics and mobility.

In their effort of shaping the post-pandemic air-travel experience, DUBZ needed to “embrace the ecosystem mindset” to secure the buy-in of authority boards, industry players, retail outlets, accommodation providers and tourism agencies. Although the Airport of the Future “requires alignment and approval from a diverse and complex ecosystem of airlines, airports, ground handlers, regulators, police and customs,” it has the capacity to “trigger positive stakeholder externalities” because “all parties have a vested interest in a new airport concept” (WP, 2020a). By locating a check-in terminal inside the Dubai Mall, tourists can enjoy a lengthier shopping experience prior to using the Dubai Metro to reach the airport and proceed directly to boarding the plane. “Off-airport is the cost-effective solution to the new health and safety requirements as it allows decreasing the operational burdens and financial costs” of changing the architectural layouts and facilities inside the airport (Interview #8).

To succeed in its air-travel industry transformation, DUBZ strives to “leverage the power of partnerships” for making the off-airport experience desirable for travelers. The company received approval from authorities for its security solution of locking/sealing the bags. It partnered with airlines to facilitate remote check-in procedures and with Dubai Immigration to streamline the deportation process of immigration violators. By becoming the off-airport wing of dnata, DUBZ could “leverage dnata’s brand and their connections with travel players to build more strategic partnerships, and thus increase the credibility and appeal of their brand to the market” (Entrepreneur ME, 2018). DUBZ’s recent agreements with marhaba, Mediclinic and other partners allowed introducing new offerings, including airport fast-track services and COVID-19 testing from home.

Discussion

The research findings demonstrate that DUBZ managed the COVID-19 pandemic by adopting the strategies of organizational survival and adaptation through innovative business alterations (Chesbrough, 2020; Dahles and Susilowati, 2015). More importantly, the company has also moved away from standardized solutions and prescribed ways of responding by embracing the crisis as an unprecedented catalyst for proactively shaping the future trajectory of its industry and wider market (Gavetti et al., 2017; Patvardhan and Ramachandran, 2020). Using the evidence generated in this study as a basis for theorizing, the GPS model of crisis response in Figure 2 is conceptualized to help air-travel providers navigate through disruption. The advanced model includes three response strategies of Guard-Potentiate-Shape that differ in terms of scope of impact (from narrow to broad) and timing of action (from immediate to intermediate).

First, in times of extreme disturbance, the most pressing strategy that should be deployed by air-travel firms is to guard against failure with the purpose of securing organizational self-preservation. A swift and agile response is needed to achieve superior damage control through various cost containment initiatives. This action is consistent with the crisis literature which highlights the importance of survival (Bundy et al., 2017) and temperance and task-prioritization strategies for a speedier recovery (Yeh, 2020). The ephemeral impromptu solutions used by DUBZ to survive are aligned with the concept of strategic improvisation that was discussed in the popular press during the COVID-19 pandemic (Hughes et al., 2020). Examples include ventilators’ production and telecare systems’ adoption by Philips, on-demand labor sharing by Uber, online live music events’ hosting by Twitch and recruitment of unemployed musicians as delivery drivers by Signature Brew. Although in this study the adopted solutions were conceived primarily as a means of surviving, Hughes et al. (2020) suggest that firms that exhibit moderate-to-high levels of readiness to improvise are enabled to adapt and thrive under disruptive circumstances.

Second, to succeed in their adaptation attempts, air-travel providers should strive to potentiate innovative change to offer an upgraded value proposition to their buyers. This strategy is broader in scope as it allows expanding the client reach by covering both individual customers and other businesses (B2C and B2B). According to Dahles and Susilowati (2015), the capacity of small-scale tourism entities to bounce back from severe business disruptions is explained by their ability to innovate their service delivery such as market switch, discounted offerings, alternate tourism-related revenues, adjustments to employment policy and maintenance cost trimming. DUBZ’s fine-tuning of its revenue model by pricing the service rather than the bag is consistent with the concept of servitization that describes the shift from a product- to service-centric business logic, which permitted Italian manufacturers to navigate the coronavirus crisis (Rapaccini et al., 2020).

Resilience in times of crisis necessitates entrepreneurial action in the form of enhanced adaptive capacity and innovation to incorporate change and fit the newly-created market conditions (Garrow and Lurkin, 2021). As the COVID-19 outbreak is likely to alter tourist behavior and travel consumption patterns, industry players are encouraged to offer innovative service arrangements to accommodate travelers’ changing lifestyles and touristic preferences (Wen et al., 2021). To achieve this objective, Chesbrough (2020) suggests relying on open innovation streams from both “inside out” and “outside in” to design innovation-driven offerings in collaboration with customers and corporate partners.

When potentiating innovative change, the key customer concern has to be put at the core of the modified and improved value proposition (Teeroovengadum et al., 2021). Following the 9/11 attacks the major preoccupation worldwide as security, many air-transport innovations focused on security technologies for screening, monitoring and detecting threats (Lohmann and Pereira, 2020). Because exogenous shocks and disasters affect people’s travel behaviors (Abraham et al., 2020; Godovykh et al., 2021), the safety and health risks of air traveling should be addressed in the context of coronavirus. The new concern-focused solutions need to target restoring passenger confidence in air travel by making it virus-free and safe from a health standpoint. Health-related measures focused on sanitation and hygiene were documented as critical determinants in hotel recovery in prior public-health crises (Tse et al., 2006). According to Wen et al. (2021), health, hygiene and cleanness will be the key factors to influence the travel and tourism revival in the post-COVID-19 period.

Third, industry players should espouse more radical strategic thinking to shape the future of air travel by channeling its evolution into desired pathways. Crises can be used as opportunities to challenge systemic sectoral weaknesses through the development of enhanced patterns of activity, remodeled service offerings and new markets of operation. Consistent with Baker and Nenonen (2020), this study demonstrates that even a small entity like DUBZ is capable of engaging in forward-looking action to nudge the safety-related transformation of the air-travel landscape (UN, 2020). Instead of merely waiting for what the future will bring to the sector, the company leads the way by bringing its own vision to the future. The ultimate goal is to create a more resilient air-travel industry that could continue to operate in face of adversity (Gössling, 2020).

This GPS model part is consistent with the bourgeoning stream of strategy-making literature which relates to market-shaping (Patvardhan and Ramachandran, 2020). McGrath (2019) suggests that smart organizations are those that are able to spot inflection points in their marketplace before they actually occur. These firms can gain a competitive advantage by proactively embracing future paradigmatic shifts to seize entrepreneurial opportunities rather than wait for the devastating shifts-induced consequences due to a failure of timely action. This case analysis indicates that the current pandemic offers the possibility of anticipating the inflection points in the business landscape and shaping future development trajectories into favored directions.

The effectiveness of industry-shaping strategies hinges upon the ability to engage and orchestrating the efforts of various stakeholders and generating positive externalities for the entire ecosystem (Jacobides, 2019). According to Scott et al. (2008), tourism should be viewed as a complex system of multiple influences in which networks of partnering entities and stakeholders affect the speed of learning, action and recovery. The UAE air-travel ecosystem is composed of many parties, including travelers, airports, airlines, shops/malls, hotels, travel agencies, security officers, police and residency officials (Bodolica et al., 2020). In such a nexus of tightly interconnected businesses, post-crisis recovery implies going beyond than just restoring normality.

Maphanga and Henama (2019) maintain that the buy-in of stakeholders such as airlines, governments, health institutions, security authorities and tourism professionals, is needed for successful mitigation of tourism destination threats. Multi-sectoral approaches and multiscale efforts are required along with the participation of international players and local communities to prevent the traumatic journeys of the past for the benefit of all ecosystem players. Crises allow companies to revise their relationship portfolio and launch new partnerships that may assist with addressing emerging needs and capitalizing on long-term opportunities. The interrelatedness of various air-travel subsectors necessitates a holistic approach (Yeh, 2020), which is consistent with the idea of shaping the wider market.

Ultimately, the essence of shaping strategies consists in the creation of a new dominant design that would define the future modus operandi of the air-travel industry. In this study, this dominant design takes the form of a “scattered/diffused airport,” that is referred to as “the Airport of the Future” by the DUBZ managers (WP, 2020a, 2020b). The idea of advancing a new airport architecture by bringing the airport to the city is alluding to the concept of “albergo diffuso” that is well-known to hospitality researchers (Confalonieri, 2011). A scattered/diffused airport means that various airport services are spread throughout the city, are embedded in the urban habitat with minimal alterations to the city landscape and infrastructure.

Contributions and implications

This paper contributes to the theory of crisis management and the burgeoning literature on market-shaping in the air-travel industry. A grounded framework was developed to theorize about crisis response strategies under the condition of an ongoing health-related super-shock (Dolnicar and Zare, 2020). Extant research indicates that crisis circumstances trigger responses that focus on organizational survival, adaptation and innovation (Dahles and Susilowati, 2015). This study goes beyond by providing empirical evidence on a more influential response strategy of shaping the wider industry or market (Nenonen and Storbacka, 2020). In times of disruption, air-travel providers should not only respond quickly and adapt effectively to unforeseen threats and shifting landscapes but also try to shape what the future will look like beyond the pandemic. To navigate through the crisis, companies should take the opportunity of leading the new normal and drawing on nimble management to work toward a stronger position after COVID-19 to ensure their sustainability.

Extant research suggests that the air-travel industry is not resilient in its current form and those new models are needed to address disruptive developments (Dolnicar and Zare, 2020) and better capture and preserve value (Gössling, 2020). In a recent United Nations Policy Brief, the key priorities for the post-pandemic tourism transformation are boosting competitiveness and building resilience, advancing innovation and the digitization of the tourism ecosystem and strengthening coordination and partnerships (UN, 2020). The advanced Guard-Potentiate-Shape model can help decision-makers strategize and learn how to get through future crises with minimal damage. The provided suggestions could generalize beyond the air-travel sector, as companies from other industries may also benefit from the GPS model as they too face the challenges of learning how to effectively manage through disruption.

Limitations and future research

One limitation is the usage of a single case study, which makes the generalizability of the findings difficult. Another limitation is the analysis of a young air-travel services firm that was already highly innovative at the time of its launch. As this research was undertaken when COVID-19 was still an unfolding event, the sustainability of crisis response strategies could not be fully assessed. Therefore, it would be relevant to examine the effectiveness of the advanced GPS framework in minimizing the damage caused and reemerging even stronger once the pandemic is over. Future studies could evaluate the extent to which contactless, digital check-ins can help fuel the post-coronavirus growth of other hospitality entities such as hotels and tourist accommodation providers. Of interest is the utilization of artificial intelligence, robotics and other advanced technologies (Buhalis, 2004) to provide contactless service and the examination of air-travel industry changes to achieve sustainable post-crisis recovery (Lohmann and Pereira, 2020).

A call for an interdisciplinary, multi-methods research agenda is made to analyze the impact of the COVID-19 pandemic at three levels: macro-level of government and multinational institutions; meso-level of tourism businesses and travel-service providers; and micro-level of the already-vulnerable hospitality workers (Sigala, 2020). Further scholarly efforts are required to expand the extant crisis management literature in the context of air travel and capitalize on the lessons learned to prevent closures and expedite recovery (Garrow and Lurkin, 2021). Future research could focus on how to orchestrate stakeholders’ efforts toward the detection of early signs of disturbance and the prevention of dramatic impacts. Additional qualitative studies are beneficial for getting a deeper insight into how industry players have not only survived the pandemic but also engaged in forward-looking strategies of shaping the future of air travel.

Figures

Figure 1

DUBZ-generated GPS model of crisis response

Figure 2

The GPS framework for crisis management in air transportation

Table 1

Sources of data and representative quotes

2nd-order themes	1st-order categories	Triangulation of data and selected representative quotes
G: Guard against failure
Swift and agile response	• Seize the lean startup advantages	• “Our goal is to scale up the business while maintaining the agility and service standards we’ve achieved since inception” (Entrepreneur ME, 2018) • “DUBZ is a technology startup. We identified a niche in enhancing the experience of travelers” (DUBZ Website, 2019) • “Our business was built to be lean and agile for a great speed of response. We could cut down 50% of our costs almost overnight” (Interview #1) • “We have our own car fleet, but mostly agreements with key logistic partners in Dubai” (Interview #2) • “DUBZ maintained an agile and lean structure and relied on trusted third-party partners to scale up and down with demand. This proved to be a successful model and key to our survival, especially when the pandemic hit” (Interview #9)
	• Adopt cost reduction strategies	• “We immediately stopped all our operations. We cut down on car-related expenses such as fuel and Salik [electronic toll road system in Dubai], logistics and mobilization” (Interview #5)
		• “We quickly designed a plan to reduce salaries gradually by a small percent at a time” (Interview #6)
		• “We benefitted from the revenue share-based arrangement we have with our partners, which meant our costs automatically dropped with a reduction in revenue” (Interview #8)
Ephemeral impromptu solutions	• Focus on cash preservation needs	• “We have this amount of cash, so how can we make it last for as long as possible?” (Interview #3) • “Since nobody was flying, it made no sense to advertise; so, we reduced our marketing activities to zero” (Interview #4)
		• “Technology was kept to a minimum, to preserve the security of our platforms, but everything else had to come down close to zero. Our technology was built in a very agile manner, which enabled us to configure new packages and integrate with partners at almost no cost” (Interview #8)
	• Find alternate revenue streams	• “We contacted supermarkets, hospitals, clinics and companies like Amazon and Noon.com because there was a lot of demand for their services. We became logistics providers, using our car fleet to make home deliveries” (Interview #6)
		• “Deliveries were ad-hoc and at a small margin. But this allowed us to keep our fleet running, rather than depreciating” (Interview #5)
		• “There was no magic way to generate revenue except with our fleet. We also executed some storage requests for a few of our existing clients” (Interview #4)
P: Potentiate innovative change
Upgrade the value proposition	• From “baggage-free, hassle-free travel” …	• “DUBZ is in the business of providing a hassle-free experience to customers. Our vision is to create luggage freedom” (Interview #1) • “Travelers can arrange a pick-up and have their luggage checked-in and collected by a dnata agent from their home/hotel anywhere in Dubai, allowing travelers to then enjoy their day baggage-free” (Entrepreneur ME, 2018)
		• “You are only a few steps away from baggage freedom” online booking system slogan (DUBZ Website, 2019)
	• …To “contactless, queueless, safe travel”	• “We introduced a fringe of services that fit into the seamless journey of contactless, queueless and safer travels” (Interview #7) • Remote check-ins “reduce the interaction time, as well as crowds at the airport” and “meet health standards while maintaining an excellent passenger experience (no queues and no stress)” (WP, 2020a)
		• “Passengers can avoid the contact in the airport, arrive just before their flight and proceed straight away to boarding” (Interview #6)
		• The process “has been revised and improved, allowing for a contactless home check-in and allowing you to skip check-in lines and baggage drop queues at the airport” (DUBZ Website, 2020)
Fine-tune the revenue model	• From the “price-per-bag” model…	• “The startup’s revenue model is based on a fee-per-bag charged to customers” (Entrepreneur ME, 2018)
		• Pre-pandemic offerings: home baggage check-in and boarding pass collection; baggage storage and delivery and land and leave (baggage delivered directly to home/hotel) (DUBZ Website, 2019)
		• “Initially, our services were about baggage check-in, storage and delivery; so, we adopted a price-per-bag model that was easy for us to advertise and for our customers to understand” (Interview #9)
	• …To “price-per-service” model	• “We are busy thinking about the world after coronavirus when travel resumes, so we’re upgrading our offerings” (Interview #5)
		• Post-pandemic offerings: home check-in package; extra experience (+baggage disinfection); plus experience (+airport fast-track for speedy immigration and security checks) and premium experience (+COVID-19 testing at home through medical partners) (DUBZ Website, 2020)
		• “So, check-in alone has a price, check-in with medical testing has another price … and then our premium service includes everything” (Interview #6)
Expand the customer reach	• From “B2C only” company…	• “The airport at your home” slogan (DUBZ Website, 2020). “We were able to bring the airport to passengers’ homes” (Interview #2)
		• “Users can then save time by skipping baggage drop-off and check-in queues at the airport, with their boarding pass and baggage tags provided on the spot” (Entrepreneur ME, 2018)
		• Straightforward online booking system for customers (with flight, pick-up, contact and payment details) (DUBZ Website, 2020)
	• …To “B2C and B2B” company	• “We are developing our ideas and thinking to take more advisory roles. We are creating a B2B website where airports, airlines and any authority that want to use our experience on how to build airport-of-the-future can talk to us” (Interview #5)
		• “We are upgrading our technology so that our B2C is also B2B; this will allow us to reach our customers correctly and also businesses interested in our advice and expertise” (Interview #6)
		• “Interested in off-airport? Get in touch and we’ll be delighted to schedule a free 30-min consultation call” (WP, 2020b)
		• “We are working with IATA to create an advisory board around off-airport processes to be recommended post-COVID-19” (Interview #7)
S: Shape the future of air-travel
Promote the new dominant design	• Address systemic air-travel weaknesses	• “We came together and thought: ‘Why all this happened? Could the impact of the crisis on travel have been avoided?’ There is too much queueing, there is too much in one location. What if there is another solution?” (Interview #7)
		• “What if the existing travel process can be challenged and revolutionized to address its critical shortages? What if passengers can be screened early, even before arriving at the airport? What if airport operations become fully decentralized?” (WP, 2020a)
		• “Off-airport can be part of a sustainable business transformation journey, rather than a COVID-specific initiative that will become obsolete once normalcy is restored” (WP, 2020b)
	• Capitalize on the “new normal” narratives	• “Instead of gathering in one location, we propose changing the travel experience by splitting this across different parts of the city (off-airport locations) through, what we call, ‘decentralized airport hubs’” (Interview #6)
		• “Now is the time to start building the [smart and decentralized] Airport of the Future – our gateway to a more resilient travel industry” (WP, 2020a). “A gateway to the future of safe, reliable and comfortable travel” (DUBZ Website, 2020)
		• “The key would be to leverage intelligent operational and passenger technologies, along with innovation in artificial intelligence, biometrics and mobility”; “remote and mobile check-in terminals” are “crucial in IATA’s New Experience Travel Technologies ‘NEXTT’ initiative” and “the emergence of a digital concierge helps facilitate a contact-less journey” (WP, 2020a)
Embrace the ecosystem mindset	• Trigger positive stakeholder externalities	• “A key enabler of their business model is ‘continuous authority alignment’ to ensure that DUBZ processes meet security requirements and are compliant with airport procedures” (Entrepreneur ME, 2018)
		• “There are many stakeholders and authority boards involved such as Civil Aviation Authority, Dubai Municipality and Department of Health, that need to align their efforts to design a better travel experience” (Interview #3)
		• “Change in aviation is cumbersome as it requires alignment and approval from a diverse and complex ecosystem of airlines, airports, ground handlers, regulators, police and customs.” Yet, “all parties have a vested interest in a new airport concept” (WP, 2020a)
		• “Off-airport can preserve cash (can be implemented through a cost-effective and agile manner).” It can “help aviation players create a sterile airport environment” (WP, 2020b)
		• Remote airport solution at Al Awir Detention Center: eliminated the hassle of transporting back and forth the deportees, eliminated the costs of changing tickets and that of logistics and lodging, reduced processing time at the airport ( DUBZ Website, 2020)
	Leverage the power of partnerships	• They have “a cloud-based backend, with their security solution approved by Dubai Police, which includes their processes like securely locking and sealing every single bag they receive” (Entrepreneur ME, 2018)
		• “dnata is the ideal partner; it offers financial strength, strong expertise and connection in travel and aviation” (Entrepreneur ME, 2018)
		• “Partnered with Dubai Immigration to streamline the deportation process of immigration violators” (DUBZ Website, 2020)
		• “We partnered with marhaba to offer a new fast-track service that breezes passengers through the airport directly to the plane.” “We partnered with Mediclinic, one of the leading medical centers here, to do the COVID-19 testing from home” (Interview #7)
		• Partnership with airlines (Flynas, Fly Dubai, Gulf Air, Saudia, Royal Jordanian, Kuwait Airways and Emirates) (DUBZ Website, 2020)
		• “We are committed to restarting travel with our airline and airport partners” (WP, 2020b)