The global airline industry seems always so near the boiling point that just one more crisis, one more downturn, is sure to trigger a cascade of changes that will bring real transformation to the industry. But after decades and countless crises, little real change has occurred.
Instead, airlines have focused their efforts on reducing costs, and while many of these efforts have produced improvements, most have not been significant enough to change the overall financial trajectory of the industry.
At last, however, real change is afoot. So what is different this time?
For each airline, success or failure is determined by a unique mix of circumstances and decisions. The question is which circumstances and which decisions matter most? For many carriers, the answer is not what might be expected.
Skeptics have often claimed that the performance of many top-performing carriers has been propped up by political support and government subsidies. Yet, in an ongoing IBM Institute for Business Value study, not one of the top five performers reported receiving any external support of any kind over the past five years, nor do they expect any over the next five.
Instead, outperforming airlines share a number of characteristics that enable them to know their customers and focus on growth. To learn more about these characteristics, download the IBM Institute for Business Value executive summary, “New routes to Profitability,” at the bottom of this page.
Collectively, we hope the findings will provide insight into the decision and conditions that help the leaders in the industry attain financial success. Moreover, as the IBM study continues, it will explore what might be possible in the industry if alternative business models are introduced. We expect some carriers will be able to leverage these findings to improve performance, but we also hope that with measured steps toward more innovative business models, more carriers will achieve the results that are needed to set a new course for the sector.