ASSESSING THE STRATEGIC EVOLUTION OF U. S. LOW COST AIRLINES IN THE POST - 9/11 ENVIRONMENT

Abstract

It has been suggested in the literature that low-cost airlines have, in varying degrees, departed from the original low-cost model introduced by Southwest Airlines. This study provides a multi-year analysis in the post-9/11 time period, for the years 2004-2009, of the demonstrated strategic positioning choices of U. S. low-cost airlines. The sample utilized is restricted to U. S. low-cost carriers so as not to conflate operating environments. Furthermore, a quantitative methodology is employed to measure effectively these choices and to facilitate inter-airline comparisons. Airlines, as part of their strategic planning process, articulate positions with regard to cost leadership, product differentiation, and growth. Decisions implemented are dynamic and inter-temporal in nature. Managers thus need a multi-period methodology to evaluate the implementation of strategic positions. One such approach is the strategic analysis of operating income utilized in this study.