Towards a typology of airline vertical strategies

Abstract

Vertical strategy – airlines’ vertical scope and positioning in the vertical industry structure – is crucial for firm performance. This paper uses a k-Means cluster analysis of 75 airlines – based on data of the year 2019 – to identify four airline vertical strategy types: Concentrators, Dependents, Peripherals, and Control Seekers, materialising around the three dimensions of vertical focus, organisational setup, and market environment. Our work focuses on a yet neglected domain of airline strategy, offering a conceptual framework for the assessment and further analysis of airline vertical strategies. Our typology offers practical implications for airline companies in their relative positioning to evaluate and potentially revise their strategies to improve competitive posture and profitability.