Identifying Strategic Groups in the U.S. Airline Industry: An Application of the Porter Model

The US airline industry has undergone significant and often surprising change since deregulation in 1978. Well-established airlines including Pan Am, Western, and Piedmont have disappeared. Other airlines such as People Express and Midway became highly publicized success stories and then took a fina...

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Bibliographic Details
Published inTransportation journal Vol. 35; no. 2; pp. 26 - 34
Main Authors KLING, JAMES A., SMITH, KEN A.
Format Journal Article
LanguageEnglish
Published Lock Haven, PA The American Society of Traffic and Logistics 01.12.1995
American Society of Transportation and Logistics
American Society of Traffic and Transportation
Pennsylvania State University Press
Subjects
Air transportation
Air transportation industry
Airline industry
Airlines
Applied sciences
Average cost
Business conditions
Civil aviation
Competition
Competitive advantage
Consumer goods industries
Corporate profits
Cost reduction
Customer services
Customers
Deregulation
Economic models
Exact sciences and technology
Ground, air and sea transportation, marine construction
Leadership
Manycompanies
Market segments
Miscellaneous transportation
Passengers
Porters
Profitability
Quadrants
Quality of service
Strategic planning
Studies
Unit costs
Willingness to pay
United States
North America
America
United States > US
Costs
Deregulation
Quality
Strategy
Air transportation
Overhead line
Modeling
Passenger transportation
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Summary:The US airline industry has undergone significant and often surprising change since deregulation in 1978. Well-established airlines including Pan Am, Western, and Piedmont have disappeared. Other airlines such as People Express and Midway became highly publicized success stories and then took a financial nosedive into oblivion. Of the 15 largest US airline firms in 1985, six did not make it to 1989, and in the following 2 years another 3 ceased operations. In contrast, since 1991, the industry seems to have found at least a temporary equilibrium; the 9 largest airlines in 1991 were the same as those that began 1994. While future change in the industry is likely, the comparative stability during recent years provides an opportunity to take a snapshot of the relative competitive positions of the 9 major US passenger airlines. Specifically, an attempt is made to identify strategic groups within the US airline industry using the well-established competitive strategy model of Michael Porter (1980).
ISSN:0041-1612
2157-328X