How small national airlines can create economies of scale – by copying hotel brands

Interesting interview with Peter Davies, former CEO of Air Malta, analysing how small national flag carriers in Europe can compete with low cost carriers and international airlines.  These national carriers are outcompeted on price on their short haul routes by the LCCs, and are losing market share on their long haul routes to the global carriers, especially those emerging in the Gulf.

Davies suggests one solution is for these carriers to create a joint management company designed to operate all their back office functions, like engineering, maintenance, purchasing and insurance, whilst retaining their own specific brand for their ‘front office’.  Whilst their brand is maintained, the airlines costs are significantly reduced by the economies of scale the back office operations would achieve.

You can read the full interview on here.

This entry was posted in Chap 14 Operations strategy, Sector: Hospitality & Tourism and tagged , , . Bookmark the permalink.

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