Professor Professor Nawal K. Taneja, Ohio State University
Noted futurists are envisioning a world of consumers, suppliers, and societies that will be radically different from the past. In the case of the airlines, game-changing forces, individually and collectively, mean that the industry faces “step phase changes.”
The emergence of format invaders represents the most serious potential threat/opportunity within the airline industry. There are plenty of areas where format invaders could enter the marketplace.
- There are companies looking at using very light jets (VLJ) for short-haul transportation in the form of on-demand air taxis.
- What if an expert in mobile computing (for example, Apple, Blackberry, and Google) were to enter the airline business? They have the right customers (well-educated “road warriors”), the right devices, the right computing capabilities, and the know how to make use of third party hardware networks.
- What if a well-funded private equity firm found a way to get around government regulations and establish a truly global airline? Using a well-developed corporate governance and advanced IT planning systems such an airline could transcend some individual airlines, and strategic alliance partnerships.
A few airline managements are clearly on the right track for developing new business models, by focusing on a customer-driven perspective, optimizing the complexity-simplicity tradeoffs, and trying to execute relentlessly current strategies while adapting to manage proactively for the future. However, based on benchmarking outside the airline industry, many airlines need to shed conventional thinking. The alternatives are bankruptcy, shrinkage of network, government bailouts, or market presence that is irrelevant.