Although there is a vast amount of literature on airline business models and their evolution in changing global landscapes, there is a general lack of research into the applicability of those models, traditionally defined in European and North American contexts, to the African scene.
Implicit in this study is the hypothesis that the African environment is unique enough to warrant its own host of strategies, which may be distinctive enough to form part of a new strategic template, or business model.
Initially, a review of existing literature is undertaken to profile the African aviation environment and evaluate existing airline business models and their evolution, both globally and in Africa. The methodology consists firstly of a cluster exercise, whereby 57 African airlines are analysed in terms of their network and size, to yield a number of heterogeneous groups which serve to identify the current business models of airlines on the continent.
Following this, eight airlines (representative of the groups outlined in the cluster analysis) were subsequently selected for analysis in terms of the Product and Organisational Architecture framework. While it was evident that the traditional models are followed in Africa, in some instances variations were apparent.
Full-service network carriers and regional carriers were concluded as being the most prominent and stable in the African market. The applicability of the low-cost carrier model in Africa was also examined at length, with mixed results. The analysis also raised network density and connectivity as essential components of business models for delivering profits in an African context.
The operating environments in which airlines find themselves are far from homogeneous. The diversity of policies, geographies and economies across the world imply a need for a set of bespoke strategies, which can be represented in broad templates or business models designed to respond to the challenges presented by specific operating environments. This paper will aim to examine the most sustainable of such business models in the African context, by first identifying the current business models pursued by airlines on the continent, followed by a study of their sustainability from 2 key perspectives: market presence and Product and Organisational Architecture (as used by Mason and Morrison (2008)).
Implicit in this research is the hypothesis that the African environment is unique enough to warrant its own host of strategies, which may be distinctive enough to form part of a new strategic template or business model. In the context of African aviation, chief bodies of research centre on the impact of liberalisation on the continent (Chingosho, 2009, ICAO, 2003, Morrison, 2004, Schlumberger, 2010, United Nations Economic Commission for Africa, 2001), with limited reference to the evolution of airline strategies in response to these developments.
Source: The Point
