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This chapter reviews the key results obtained in previous studies of airline mergers. It is found that the effect of mergers on airfares is dependent on the network configurations of merging airlines. Fare increases are frequently observed on overlapped routes. However, if the networks of two merging airlines are complementary, the expanded network after the merger leads to cost savings, increase in travel options, and improvement in service quality. Therefore, in a deregulated market, with few entry barriers, relaxing merger regulations is likely to improve welfare. However, most welfare evaluations do not incorporate quality changes or dynamic competition effects. Empirical investigations are primarily ex post analysis of mergers that have already passed antitrust reviews. The relationship between market concentration and welfare might be nonlinear and market specific. Therefore, airline mergers and alliances should be reviewed case by case. Methodological improvements are needed in future studies to control for the effects of complicating factors inherent in ex post evaluations.

The primary objectives of this study are to determine if consumer expectations and perceptions of airline service quality vary by nationality. The study also examines whether the relative importance attributed to service quality dimensions in domestic settings can be replicated internationally. An empirical examination of airline passengers is conducted for airlines competing on the transatlantic corridor using a survey instrument in three languages. The study is the first application of an existing model, SERVQUAL, to examine consumer expectations and perceptions in an international environment. It differs from earlier published SERVQUAL research in two significant respects; first, it applies the model internationally in a general classification of business, i.e. international airline service, rather than to individual domestic business enterprises. Second, it applies a portion of the SERVQUAL model to assess service quality by comparing the expectations and perceptions that European and US airline passengers have of both European and US airline groups.

The purpose of this paper is to measure competitive service quality (SQ) performances of domestic full service airlines in India by providing a framework based on analytic hierarchy process (AHP), in order to benchmark their SQ thus, enhancing competitiveness and gaining competitive advantage.

The present study has used the AHP methodology to benchmark the SQ of airlines in India. Subsequently, competitive SQ gap analysis is performed to evaluate and compare strength and weakness of focal firm (Airline “B”) against its competitors.

In this research work, total of 23 SQ attributes and five dimensions have been identified based on extensive literature review, focus group brainstorming and experts opinion from the Indian airline industry. The study reveals that air travelers rate assurance as the most important criteria and safety as the most important sub criteria followed by on time performance, performing the services right, the first time and remedial process for delayed or missing baggage. Furthermore, based on AHP methodology, the result shows that Airline “A” has emerged as a market leader and is considered as a benchmark airline.

This framework will help airline management and policy makers to identify area of service improvements and identify SQ gaps with respect to the benchmark airline. This will help in formulating suitable competitive strategies for SQ improvements, thus gaining competitive advantage.

In this research work, AHP-based SQ framework have been applied in Indian domestic aviation industry for competitive SQ benchmarking which is a novel contribution, thus widening the existing knowledge base in aviation SQ literature.

For strategic and competitive insights, the purpose of this paper is to measure and benchmark the comparative operating efficiencies of Association of Southeast Asian Nations’ (ASEAN) major airlines and present a new interpretation along with managerial implications.

This research statistically tests returns to scale and the equality of mean efficiencies for 15 ASEAN airlines covering the period 2010-2014. The disaggregate input efficiency of ASEAN airlines is computed by comparing the target and actual inputs.

The disaggregate input efficiency of ASEAN airlines shows that aircraft efficiency is the lowest, operating cost efficiency is better, and available seat efficiency is the best.

This paper applies data envelopment analysis models, disaggregated input efficiency measures, and bootstrapping approaches to compute the operational efficiency of ASEAN airlines. Strategic suggestions are made to improve the operational efficiency of ASEAN airlines.

Drawing upon the existing theoretical and empirical sourced knowledge of aesthetic labour and gender, this paper aims to explore the exploitation of women’s aesthetic labour in the Chinese airline industry and the underlying causes from a contextual point of view.

This qualitative study has emerged from a broader research project which aimed to explore women’s experiences of work-family conflict and their career aspirations in the Chinese airline industry in which aesthetic labour was prevalent as a significant issue during semi-structured interviews with female employees and HR/line management. Thus, the study draws upon interview data focusing on recruitment and selection of flight attendants in three Chinese airlines. This is complemented by secondary sources of data from Chinese television programmes and job advertisements.

This study reveals that aesthetics is both gendered and context-bound. It exposes that aesthetic labour in Chinese airlines is demanded from women but not men. It highlights that gendered aesthetic labour is continuously shaped by four influential contextual issues – legislation, labour market practices, national culture and airline management practices.

By uncovering the dynamic interconnectedness of gender and aesthetics and illustrating the exploitation of women’s aesthetic labour for commercial gains in Chinese airlines, this paper contributes to the understanding of the gendered aesthetics in the airline industry. It also offers new insights into the theory of aesthetic labour by locating it in a context that differs significantly from other socio-cultural contexts.

Distils the key insights for management development from the four research papers, in this special issue taken individually as well as collectively. The perspective taken is one of strategy – for the industry practitioner or strategy/management consultant. The key insights that extend beyond the scope of individual research papers will be presented first, under the following themes: Lessons of brand/differentiation strategy; Managing a leading brand; A lesson from the case study; Strategy in a complex, turbulent and uncertain globalising environment. Key insights that are single research paper specific will be presented as follows: The story of Singapore Airlines and the Singapore Girl; Air wars in Asia: competitive and collaborative strategies and tactics in action; The Development of the airline industry from 1978 to 1998: a strategic global overview; Beyond Singapore Girl: grand and product/service differentiation strategies in the new millennium.

The case aims to understand and analyse the capital structure decisions made by a profit-making, growing organisation which aimed to be India’s premier airline and the market leader. The company that had pursued a high debt policy, to take advantage of the financial leverage that it would get, was now facing problems in an operating environment that proved to be challenging. A decline in operating profit, coupled with high-interest costs and an uncertain environment with cutthroat competition, had caused the company to plunge into losses. Attempts to deleverage by equity infusion were proving to be difficult. The case can be used in MBA, Executive Education and doctoral programmes. The learning objectives of this case are: to analyse the capital structure of the company, to interpret the relationship between financial leverage and risk, to assess the pecking order theory, to analyse the nuances of the aviation sector and the factors influencing the profitability of the companies in the aviation industry, to estimate the risks and the rewards associated with foreign currency loans, to evaluate the magnifying impact of the financial leverage and to propose deleveraging methods like sale and leaseback, debt conversion to equity and devise a revival strategy for the company.

The case discusses the dilemma faced by Naresh Goyal, promoter and chairman of Jet Airways (India) Limited. At the initial stage, Jet Airways, like many other companies in its growth phase, relied on borrowed funds to meet its investment needs. However, over-reliance on borrowed funds with just one equity infusion resulted in a high leverage ratio and an aggressive capital structure. Moreover, the company operated in a sector that was highly regulated, with competition that was cutthroat and a cost structure that was volatile. A high operating risk, coupled with high financial leverage, pushed the company into incurring losses. Having run out of cash, Jet Airways eventually defaulted on loan repayments to its lenders. Facing the eventuality of losing control of the company to lenders or to a strategic investor, Goyal was trying to figure out a way to save the company from insolvency and liquidation. It was becoming increasingly difficult for Goyal to keep Jet Airways, the company he had nurtured like a baby, airborne.

The case can be taught in both online and offline modes of delivery in a 90-minute session. Post-covid, the delivery mode of classes has changed. In online sessions, it may be a challenging task to ensure student participation.

Teaching notes are available for educators only.

CSS 1: Accounting and Finance.

This chapter focuses on the international aspects of auditing in the context of the airline industry for the year 2018. This chapter finds that International Standards on Auditing have been widely adopted in the global context. This chapter also analyses several observations related to the composition of audit firms (Big 4 vs. non-Big 4), types of audit opinions, emphasis of matter, other matters, material uncertainty related to going-concern, and types of auditors (single or joint auditor). This chapter covers the frequency of the four elements of describing key audit matters (KAM) in the audit reports in the global and auditor context as well as the KAMs observed in the airline industry and classifies them as industry-specific KAMs and entity-specific KAMs. In addition, this chapter analyses the requirements of the expanded audit report of the UK which includes the declaration of materiality threshold and scope of the audit in connection with the materiality and KAMs considering UK and non-UK airlines.

Strategic management, system control management (balance score card).

Post graduate student, managers.

This case examines “Garuda Indonesia” the National Indonesia airline and its exceptional performance in recent years due to successful strategic decision making. This comprehensive case is structured in five parts highlighting: Garuda's recent success based on positive strategic management; Garuda's history and how it shaped its success against strong competition through effective leadership and the challenges it has overcome; an examination of the development within the Indonesian airline industry; a focused examination of strategic development with Garuda, including competition policy; operational planning and delivery; debt restructuring and product/service strategy; and an examination of the ongoing challenges, including governmental pressures and political maneuvering.

Students will identify opportunities and threats, including strategic issues derived from the external environment facing by Garuda Indonesia. Students will identify strengths and weaknesses from the internal environment faced by Garuda Indonesia. Students will develop strategic alternatives to inform business decisions. Students will give recommendations including priority planning for the next three to five years.

Teaching note.