The strategic impact of airline group diversification: the cases of Emirates and Lufthansa

Show simple item record Redpath, N. O'Connell, John F. Warnock-Smith, D. 2016-09-26T15:30:42Z 2016-09-26T15:30:42Z 2016-09-03
dc.identifier.citation N. Redpath, J.F. O'Connell, D. Warnock-Smith, The strategic impact of airline group diversification: the cases of Emirates and Lufthansa, Journal of Air Transport Management, Volume 64, Part B, September 2017, pp.121-138 en_UK
dc.identifier.issn 0969-6997
dc.description.abstract The airline industry is a diverse sector, requiring the support of a varied range of ancillary businesses such as maintenance, catering and travel agencies to carry out its activities. Many of these supporting businesses demonstrate the potential to drive wider profit margins despite generating lower revenues than the airlines themselves, making them attractive investment opportunities in a sector prone to volatile and often lacklustre trading. This study investigates two of the largest diversified airline groups, Germany's Lufthansa Group and Dubai's Emirates Group, each adopting a distinct approach towards diversification that may serve as a model for airline groups worldwide. The areas investigated were Cargo, Maintenance, Catering and Travel Services. The research found that whilst diversification may not always present the most attractive option financially, strategic factors can often outweigh such concerns. Business units studied were found to have variable prospects; particularly in the case of Catering, a sector on the rise – versus in-house Maintenance, which for airlines, is likely to see decline. The pursuit of third party revenue streams to offset weak internal trading and growth in competencies were found to be the key drivers of success. Interplay between segments was also apparent, showing that a well-organised diversification strategy can achieve robust cross-functional benefits and deliver significant value to the parent organisation. en_UK
dc.language.iso en en_UK
dc.publisher Elsevier en_UK
dc.rights Attribution-NonCommercial-NoDerivatives 4.0 International
dc.subject Airline diversification en_UK
dc.subject Airline groups en_UK
dc.subject Strategic direction en_UK
dc.subject Vertical integration en_UK
dc.title The strategic impact of airline group diversification: the cases of Emirates and Lufthansa en_UK
dc.type Article en_UK

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