Porter stated; “for an airline to succeed in the marketplace, it must have a sustainable competitive advantage” (Porter M. E., 2008). The airline industry is the highest competitive industry, and I believe a sustainable completive advantage is essential to succeed in the future of the aviation industry. The competitive advantages that an airline embrace, needs to be based on the airlines strategy and differentiation to competitors. Emirates displays how it has a strategy and how the airline gets ahead of its competitors through how unique it is.
A sustainable competitive advantage is making your company have a unique value position, in a competitive environment, while defending the supported proposition. These advantages need to be constantly updated in order that the competitors remain on the back foot. Unable to keep abreast of the shifting advantages and the difficulty to imitate or implement changes that take place. Such properties of sustainable competitive advantages that can be changed, include;
• Customer interaction
• Fleet efficiency
• Turnaround times
• Contracted flight paths with government
• Time and price elasticity
• Airport grandfather rights and airport-airline relationship
• Service contracts
• Brand awareness
• Social media
• Loyalty programmes/Alliances
• Short term influence on customer behaviour
• Airline hub model
• Fuel costs
• Technology enhancements
• Safety record
• Cooperate culture in relation to wages, loyalty and productivity
• Load factors
• Expansion with class of population
When an airline does not have a sustainable competitive advantage, it does not have any properties of differences from there competitor and turns to a dangerous price war. The sustainable competitive advantage (changes) needs to be representative of the company’s strategy. The employees need to be on board with these, understanding what the company is trying to achieve and what defines the differences from the airline competitors. For the employees to understand to achieve an effective business strategy, they need to jointly relate to the corporate culture. The airlines strategy also needs to reflect their aim in value proposition through customers with price, service, and comfort. An example is Pam Am, which did not have a sustainable competitive advantage as competitors copied there advantages along with buying essential flight paths rights (McCarthy, 2003).
Southwest has a unique competitive advantage, as its uniqueness is based on cooperate culture. Most importantly is it increases corporate productivity over a period of time through culture (Denison, 1984). All employees understand what the company is wishing to achieve to its customers. Southwest to this date still has the fastest turnaround time with minimal cost increase due to the culture of the airline of all staff helping each other, including pilots. Although its strategy is low cost, it does give a high standard to customers through their...