Competitive advantage in the airline industry : a Malta case study

Abstract

This research attempts to explore the importance of implementing tools such as Revenue Management Integration to monitor airline competitiveness and financial performance. Factors such as market trends, reasons for travel, seasonality, uniqueness in product and booking periods will be taken into consideration due to their involvement in affecting revenue. Given that this research is based on sales and revenue, interviews were conducted with general management, both past and present, as well as past revenue management personnel. The airline mix was mainly Air Malta, Emirates, Lufthansa and Medavia, so as to get different perspectives on the subject. The market has become dominated with low cost carriers with their transparent pricing and simplicity, which has caused airlines to seek new pricing strategies. The outcomes of the research have shown that investing in Revenue Management should be an essential part of any airline’s objectives should they aim for a better market share. In order for this implementation to be successful, one must understand the concept of how much revenue they can generate rather than focusing on simply selling a seat. The customer must also be put in the centre of a business’s strategy since understanding needs and behaviour will allow an airline to offer them a tailor-made product, which is what consumer look for nowadays. It is also crucial for airlines to study their competition’s pricing and behaviour. Competition in a different perspective may also shed light on the importance of an airline to be efficient, professional and offer the best product. Although there will be pressure to survive in the market, airlines would strive to be the best in order to succeed.