Managing Proactively in Turbulent Times: Insights from the Low-Fare Airline Business

Airlines have traditionally had severe difficulties coping with a sudden steep decline in revenue, as they are capital-intensive companies and need to maintain a network, with all of the associated fixed costs. This chapter examines the strategic management principles and operational processes of leading low-fare airlines (LFAs) and compares the best practices established for airline management. The LFA sector provides a vivid example of the proactive approach to corporate strategy, as illustrated by the actions of leading LFAs during the post-September nth airline industry crisis. The chapter illustrates that companies such as Southwest and Ryanair are extremely robust during times of economic crisis and market decline. It also illustrates how market power and resilience derive from a proactive approach to strategic management, premised on an aggressive pursuit of the customer coupled with a clear and relentiess emphasis on operational efficiency.