Airline Management: Strategies, Business Models, and Pricing Management

Running head: AIRLINE MANAGEMENT
Airline Management

AIRLINE MANAGEMENT 1
Executive Summary
The aviation management is different from managing the other businesses of the industry. It
required a high degree of knowledge and expertise to know all the strategies and concepts of
the airline management. This report summarized some main important elements of this
industry to provide a brief knowledge of aviation management. The main concepts that are
being discussed in this report are the development of the airline industry, competitive
strategies, alliances, business models and the pricing management used by the airline
companies.

AIRLINE MANAGEMENT 2
Table of Contents
Introduction................................................................................................................................3
Developments in the Commercial aviation................................................................................3
Pricing, Yield and Revenue Management..................................................................................4
Trends and their Implications.....................................................................................................5
Key Strategies for Airline Companies.......................................................................................5
Airlines Business Models...........................................................................................................6
Airline Alliances........................................................................................................................7
Views of Warren Buffett............................................................................................................8
Changes after 1989.....................................................................................................................8
Strategic Reasons.......................................................................................................................8
Conclusion..................................................................................................................................8
References................................................................................................................................10

AIRLINE MANAGEMENT 3
Introduction
The aviation industry is a very particular system in which the passenger is transported
between two cities or nations at an agreeable price. In this system, there is neither any
product sold to the customer, not any inventory is created or stored. In airlines, a specific type
of management concepts, tools, and practices are used.
In this industry, the market is analyzed for each flight and also the passenger’s preference is
given to be important. If the customer belongs to the business category which covers the
small number of seats on the whole plain but the ticket price is high, the rise in comfort will
be given to the passenger.
Airline and Airport Management is a study of Management branch that teaches the
management of airport and airlines. This gives a deep understanding of various operational
and commercial priorities which also impact the decision making at the airport.
Airlines and Aviation are a part of international supply chain network. According to a report,
the growth of the industry on an annual basis will be 5.6%. It is equally distributed between
developed and developing country (Burbidge, 2016).
When the area comes for budgeting and tracking airport expenses, Airports are subjected to
various state, country, and municipal requirements and Airlines also focus on the aspect of
financial management as the opportunity lies in its improvement. For the management of
airline, it is essential to maintain all aspects regarding the flight, passenger, and other details.
The managers of all airports have to follow varied responsibilities which cover everything
from operations to regulations so that stakeholders can be convinced. Generally, Airline
management is fully covered under automation and updated technology which eases the
manager’s tasks. Also, it can be seen that the development in aviation management is rising
over time with the changing concept of pricing, yield and revenue management.
In this report, two of the major strategies are being discussed which are cost leadership and
quality leadership strategy and it differs from country to country. For gaining the deep
knowledge, two business models are also discussed below in the report (Wittmer, et al.,
2012).